Resumption of the session
President
I declare resumed the session of the European Parliament adjourned on Thursday 15 March.

Statement by the President
President
Ladies and gentlemen, it is once again my sad duty to have to open this part-session with a condemnation of the ETA terrorist attacks in Spain.
As you know, since 15 March, there have unfortunately been two further additions to the intolerable list of Spanish people whose lives have been lost in these attacks.
During the night of 17 March, Santos Santamaría, who was a member of the Mossos d' Esquadra, the Catalan regional police force, was killed in a car bomb explosion in Rosas. On 20 March, Froilàn Elespe Inciarte, a Socialist party municipal councillor in Lasarte, was shot twice in the head and killed.
In carrying out these murders, ETA has once again shown its total disregard for democracy and the recent threats made on tourists are examples of the same despicable behaviour.
As on each of these sad occasions, on behalf of the European Parliament and on my own behalf, I have sent our deepest sympathy and sincere condolences to the families of the victims. I have also sent a message of our support to the Spanish authorities.
I would ask you to observe a minute' s silence.
(The House rose and observed a minute' s silence)

Agenda
President
The next item is the final version of the draft agenda as drawn up by the Conference of Presidents at its meeting of 29 March 2001, pursuant to Rule 110 of the Rules of Procedure.
Relating to Thursday:
President. With regard to Thursday, I have received two requests for amendments, both concerning the topical and urgent subjects of major importance and the item on human rights. First of all, I have received a request from the Group of the European People' s Party (Christian Democrats) and European Democrats, and from the Group of the Party of European Socialists, to withdraw the first item entitled 'Iran' from the agenda.

Swoboda
Madam President, I should briefly like to explain our request. The reason for it is not that we have become more tolerant of the situation in Iran, but that difficult discussions and negotiations are being held in Iran itself at the present time with a view to improving the lot of a number of Iranian citizens who work in the German Embassy. I do not believe that we should now disrupt this process which is taking place in Iran, perhaps by adopting a resolution. We have firm views on the violations of human rights, but in this case - and, I would stress, at this particular time - I do not believe that we should either hold a debate or adopt a resolution.

President
Does any Member wish to speak in favour of keeping this item?
There being no speaker, I shall put the request to the vote.
(Parliament gave its assent)

 
President. The second request is from the Group of the European People' s Party (Christian Democrats) and European Democrats to withdraw the third item entitled 'Violence towards Catholic nuns' .

Van Velzen
Madam President, this is a serious problem, yet limited in terms of scope. At the end of the day, this is about a few priests who spent some time in Africa and who displayed behaviour which was naturally wholly inappropriate and which we do not endorse at all. However, we should not generalise. This was not the Holy See' s policy. Neither is this an urgent matter, because the incidents date back to 1994-1995. Now the Vatican too has taken measures and launched its own inquiry. Steps have since been taken against the priests in question and the relevant details have been disclosed. Accordingly, my group proposes not to include this topic in the urgent and topical debate. Needless to say, it is entirely logical in our view, and we would also appreciate it if we were to discuss this topic within the parliamentary committees, for that - and not the urgent and topical debate - is the appropriate forum.

President
Does any Member wish to speak in favour of keeping this item?

Plooij-van Gorsel
Madam President, my group understands all too well that this subject is of an extremely sensitive nature. The present resolution has indeed turned out to be rather elaborate and should focus on the rape of the women. I am very much of the opinion that this subject should be dealt with in the topical debate, for it was revealed only recently, last week, in fact, that women' s rights have been violated not only in Africa, but in 23 countries across the world. In this light, we cannot just dismiss this subject as marginal. What we as Parliament should say about this is not so much that it has happened - indeed, it happens in every society, irrespective of religion, both in the West and elsewhere - but that it is being concealed under the cloak of charity. For years, the existence of a problem was simply denied. I believe Parliament should make a statement on this.
I repeat, once again, that the text which is before us contains elements which do not belong in this resolution; we will therefore remove them so that it becomes an accurate resolution which deals with the problem of the violation of women' s rights across the world by Catholic priests. I hope that I will be able to count on your support.
(Parliament rejected the request)

Lannoye
Madam President, I do not wish to make a request regarding the urgent subjects, but I would like to draw the attention of the House to a point relating to respect for the objectives of the Kyoto conference, which took on a new dimension some days ago, following President Bush' s comments, which were untimely, to say the least.
I think that at this debate, which is unfortunately scheduled for Thursday afternoon, in other words, when few Members are present, it would be crucial for the Commission and the Council to be represented at the appropriate level and for Parliament to be aware that President Bush' s comments are not only important in relation to the Kyoto protocol, but that they call into question the very nature of the privileged relationship between the European Union and the United States.
Given such an astounding unilateral position, which, it has to be said, completely alters the political climate between Europe and the United States, I believe that it is the duty of the European institutions to give a response which should be a strong political reaction rather than an escalating verbal conflict. I think that the nature of the transatlantic economic partnership and the transatlantic dialogue that we have with the United States risks being compromised if the U.S. does not change its attitude.

President
Mr Lannoye, I share your feelings especially because, as you know, I thought that I could react extremely swiftly in exactly the way that you describe. With regard to Thursday' s debate, the Commission has certainly listened to your request that it be suitably represented, at the highest level. This also applies to the Council.

Van Velzen
Madam President, there is another serious matter which surfaced very briefly. Since we have some time available, perhaps we could dedicate a few moments to this matter. Our fellow MEP, Mr Imbeni, in his capacity as Parliament' s Vice-President, is attending the Interparliamentary Meeting in Cuba on our behalf. Mr Imbeni has stated that he is not prepared to make a statement on democracy or the human rights violation in Cuba. My group believes that this is not acceptable and that Mr Imbeni should be instructed, on behalf of yourself and us, should the opportunity arise - which may well be the case during the press conference - to take a clear stance against the violation of democracy and human rights. I would therefore ask you to include this in the urgent and topical debate on Thursday, or to submit a statement tomorrow, since the Interparliamentary Meeting will continue until 7 April at the latest.

President
Thank you, Mr van Velzen. I shall check this with Mr Imbeni.

Barón Crespo
Madam President, your silence in the face of the untimely speech by Mr van Velzen obliges me to speak, not only because Mr Imbeni is a colleague from my own group, but also because he is a Vice-President of Parliament and a person who has always acted with great dignity, as an MEP and as Vice-President, in defence of our common values. Furthermore, I am sure that Mr Imbeni, who is not present at the moment, being in Cuba or Timbuktu, will always defend the resolutions of the European Parliament and will behave with the greatest dignity.
I ask Mr van Velzen to withdraw his comments and, if he wishes to repeat them, to do so in the presence of Mr Imbeni.

President
Mr Barón Crespo, I should like to point out to you that I immediately checked to see if Mr Imbeni was present. However, it was difficult to begin a debate since Mr Imbeni was not here. Having said that, I shall do my best to resolve the issue.
The order of business is thus adopted.

 
Speeches on procedure

Obiols i Germà
Madam President, we have reached a point where, when we talk publicly about the situation in the Basque Country, we cannot know what the consequences will be. I take this opportunity to enthusiastically greet all the Members of this Parliament.
Montaigne said that most of the ills of the world resulted from 'ânerie' , a word which is untranslatable into Spanish, but which is related to 'ass' . I do not believe that it is worth wasting much time replying to criminal asses. Thank you very much.

Krivine
Madam President, I would like to draw both your and Parliament' s attention to two very important decisions that have recently been taken by two European companies, which have stirred up great feeling amongst the working population.
As you know, Danone recently decided to close down several European factories, getting rid of thousands of workers, despite this very company telling us not long ago that its previous year' s profits had been fairly significant.
In addition, Marks & Spencer recently decided to close down all its European outlets outside Great Britain. This seems to be an illegal decision, in that the unions and the Works Councils were not notified and the workers found out what would their fate would be from the radio.
I would like to know, therefore, if it would be possible for you, Madam President, and if it would be possible for Parliament, to make a statement on this unacceptable action, perhaps at the next part-session, which, on the one hand, is discrediting the social Europe that several of you want to see, and, on the other hand, constitutes a denial of justice and an attack on the dignity of the working population.

President
Thank you, Mr Krivine. I am sure that the issue will be looked into at the Conference of Presidents, when it meets this Thursday.

Alyssandrakis
Madam President, I wish to express our indignation at two recent events in the Balkans. The first is the arrest of the former President of Yugoslavia, Slobodan Milosevic, and the other is the imminent agreement between Bulgaria and NATO on free passage for NATO forces.
The Americans, NATO and the European Union spent USD 100 million ousting President Milosevic. They spent another 100 million securing his arrest with a view to handing him over to the so-called Hague War Crimes Tribunal set up by the imperialists in order to justify their own crimes.
Only nations have the right to judge their leaders, no one else. President Milosevic would not have been arrested had he followed NATO' s orders. Is this the punishment for resistance? Mind you, even those who gave the imperialists everything, such as the Former Yugoslav Republic of Macedonia, have to suffer armed intervention by the NATO elite.
Developments in the Balkans clearly demonstrate that we have not yet seen the end of the war. Only once ÍÁÔÏ leaves the area will the people there be able to foster some hope of living in peace.

Wurtz
Madam President, I have to take the floor, although I regret to have to do so after a Member of my group has spoken.
First of all, I believe that I am expressing the feelings of the greater part of my group when I say that it was necessary for Milosevic to be arrested.

Furthermore, I believe that his arrest is not a snub towards the people of Serbia and Yugoslavia. Instead it is a relief, because it enables this people, this nation, who certainly have a very honourable and often glorious history, as well as an extremely troubled recent past, to turn the page once and for all on this extremely troubled recent past, at a time when the whole world is watching.
My last point is to say that, on the other hand, I think the pressure that the American leaders are putting on the new leaders of Yugoslavia is extremely misplaced, irresponsible and dangerous. I think that you must be aware of what you want. If you want to refuel nationalism and give food for thought to those nostalgic for the past, do so. However, if you want to give Serb and Yugoslav democratic powers a chance, allow them to bravely take on their responsibility and see things through to the end.
(Loud applause)

Bonde
Madam President, I should like to draw your attention to the Council' s decision of 19 March, in which, instead of the promised regulation on openness that should have come into force on 1 May, a set of internal provisions is adopted, infringing the Treaty rules on adoption of the Rules of Procedure, which as we know requires a simple majority. One of these provisions specifies that, in future, a qualified majority is required for introducing increased openness in the Council. Furthermore, Parliament was not consulted on this subject. So I call on you, Madam President, to address this issue the next time you meet with the Council. At the Conference of Presidents last Thursday, we decided to have the legal service examine whether there is a basis for possible legal proceedings. However, I think you should, in any case, discuss this matter with the Council, and I believe that the Council should, in all decency, withdraw its decision until agreement on a regulation on openness has been reached with Parliament.

President
Mr Bonde, as you said, a legal opinion was issued on this matter and it will be looked into this week at the Conference of Presidents.

Van den Bos
Madam President, you will shortly be paying an official visit to the Netherlands. I am very much looking forward to that. My only regret is that you are not planning to take the opportunity to talk to the representatives of the people, European or national. I would like to ask you why you, yourself, as representative of a parliament, avoid contact with parliamentarians when you visit Member States? Why do you only talk to government officials? I am a member of a party in office myself, but I know that the opposition sometimes has very interesting things to say as well.

President
I am astonished by this, because I have not made a single official visit without meeting with the Presidents of the national parliaments of the country I am in and I would be tempted to say that I meet them before I meet anyone else. They are the people with whom I am in closest contact. If this were not the case, I would be utterly dismayed, but I am certain that, of course, I am scheduled to meet the Presidents of national parliaments, as I do everywhere, as well as the Prime Minister and the government authorities. There are a number of people that I have to meet, such as, naturally, the Presidents of the national parliaments.
Given the current background, which is the first phase of the post-Nice deliberations, I would add that it is even more important to maintain contact with the representatives of the national parliaments, even more crucial than under normal circumstances. I believe that there must have been a misunderstanding here, but I will most certainly send you the final schedule for my visit.

Investment services
President
The next item is the joint discussion on the following reports:
(A5-0106/2001), by Mr Katiforis, on behalf of the Committee on Economic and Monetary Affairs, on the Commission communication on upgrading the Council Directive on investment services in the securities field (93/22/EEC)
(A5-0105/2001) by Mrs Kauppi, on behalf of the Committee on Economic and Monetary Affairs, on the Commission communication on the application of conduct of business rules under article 11 of the Directive on investment services in the securities field (93/22/EEC)

Katiforis
Commissioner, ladies and gentlemen, the report which I have the honour of presenting to the House concerns the Commission communication to the Council and the European Parliament on upgrading the 1993 directive on investment services.
The Commission has notified this communication within the context of the wider action plan for financial services drawn up in application of the decisions by the European Council in Lisbon on the unification of the European financial and capital markets. Unifying these markets will help to complete the single market. Ôhe last European Council in Stockholm revisited this issue, calling for the action plan to be fully applied by 2005 and for all interested parties to make every effort to achieve a single stock market by the end of 2003. Investment services are, without doubt, an important tool, perhaps the most important tool to the working of the stock markets.
Clearly, every initiative in this context, such as that contained in the Commission communication which it is my honour to present to the House, has been stamped urgent by the European Council. The Commission communication is not a legislative text. However, it is, nonetheless, of crucial importance because it paves the way for the reforms needed so that, when the time comes for a legislative proposal, and I believe it will be soon, Parliament will be prepared to adopt the necessary amendments to the original directive quickly and, I trust, almost unanimously. I think that this will give us a chance to prove the speed and efficiency of our legislative procedure which, unfortunately, has been thrown into doubt recently by certain reports, such as the Lamfalussy report.
My fellow Members, the economic policy objective of the Group of the Party of European Socialists is not, nor has it ever been, purely and simply to distribute income and wealth more fairly and reduce inequalities in society. Along with this objective, which forms the nucleus of our policy, we have always endeavoured, and we still do, to strengthen the productive base, because goods need to be produced before they can be distributed more fairly. With these thoughts in mind, the Socialist Group firmly supports the completion of the single market and the unification of the financial markets in Europe. We believe that progress on these fronts will strengthen the productive potential of the European economy, to the benefit of one and all. We also believe that the market cannot use its autonomous and automatic procedures to create the changes needed for the purpose. Self-perpetuating change in market institutions often traps the economy in an unproductive situation, creating monopolies and safeguarding the interests of the few at the expense of society as a whole. Political intervention is therefore required in order to shape the frameworks needed within the economy, so that the market can be liberalised and can return a real productive result.
It is exactly this sort of reforming intervention which I have the honour of recommending in this report on upgrading the directive in question. The original directive, in 1993, was intended to promote the unification of the markets and fight national protectionism in the provision of investment services. The mainstay of the directive was the mutual recognition by all the Member States of the operating licences which any one Member State issued to investment service companies, the famous European passport. The idea was an inspired one, but it was thwarted in practice by the fact that each Member State had the facility to attach different operating rules to the provision of these services. The fact that, under the original directive, the investment company no longer needed to file 15 applications and obtain 15 licences, but only needed one licence in order to establish anywhere in Europe was, without doubt, a step forward, but it lost much of its impetus because each company had to deal with 15 different legislative regimes on the ground. This situation acted as an important national regulatory barrier to the unimpeded movement of investment services and the unification of the European markets.
I now recommend to you, and I am delighted that the spokesman of the Group of the European People' s Party (Christian Democrats) and European Democrats, Mrs Kauppi, agrees with this proposal, that we dismantle this barrier and impose the force, not of 15, but of a single regulatory regime, namely that of the Member State which issues the licence. We shall have taken a big step towards the single market once certain aspects of the investment services sector are unified, especially once clearing and settlement of share purchases and sales have been unified.
In the United States, which can teach us a great deal about these matters, one central clearing house acts for the whole country. In Europe we have many more than one. Given that clearing services have huge potential for economies of scale and hence for reducing costs, which are much higher for us than in the USA, it would be a good thing if the directive helped to unify these functions. It cannot, of course, insist that the stock exchanges merge, but what we can do, and what I suggest to you, is that contracting parties should have the right to choose the clearing and settlement system which they prefer, even if it is different from that of the stock exchange on which the transaction was conducted. By strengthening competition as part of the procedure of stock exchange mergers being promoted by the euro, there is hope that, in the end, the companies with the lowest costs will prevail, rather than the companies with the strongest monopolistic links.
Furthermore, the directive should monitor the constant changes being driven by technological progress. Today, the regulated markets are no longer infrastructure-type organisations; they have become commercial companies, while numerous large, highly computerised stock exchange companies have metamorphosed from intermediaries on the market into internal share markets. The regulations need to be adjusted accordingly. Many of the rules on the integrity of the markets, such as rules to combat insider trading, need to be extended to the internal transactions of these companies, while other rules, which at one time only related to companies, such as rules governing customer relations, should also apply to stock exchanges. This question is difficult to broach, but it is, perhaps, one of the questions which we should regulate in general terms, leaving the details of application to the regulatory authorities of each country or of Europe, where there are any.
Finally, ladies and gentlemen, I should like to stress that the Socialist Group supports the unification of the financial markets, the aim of which is to strengthen the investments needed to achieve full employment in Europe. It certainly does not support, in fact it is most certainly opposed to, the speculative fever of stock exchanges, which can cause catastrophic, explosive conditions in the real economy, which is why we are calling on the Commission to present its proposal on safeguarding the integrity of the markets as quickly as possible. Of course, we do delude ourselves that a regulation will do away with speculation at a single blow. However, we do at least want stronger principles of commercial honesty, precisely because speculation increases the temptation to act dishonestly, now that the stock exchanges are increasingly consolidating their pension function in our society. The limits within which European stock exchanges are fed from workers' pension funds cannot but be much stricter than in the days when stock exchanges were simply casinos for the rich. Strengthening discipline and the proper functioning of the stock exchanges are one of the most important projects in the action plan for the investment markets.

Kauppi
Madam President, Commissioner Bolkestein, ladies and gentlemen, first of all I would like to express my thanks to the Commission. This communication was so skilfully drafted in fact that we in Parliament were able to reach consensus both in the Committee and here in the plenary sitting. There was not a single amendment made to my report, which I am very happy about.
Article 11 of the investment services directive needs to be revised to remove the legal uncertainty that prevails nowadays in the European investment markets as well as overlapping and conflicting rules. Factors of uncertainty such as these hamper the success of the internal market and result in considerably increased costs, which European investors ultimately have to pay. We must ensure that all investors have the opportunity to participate in the internal investment services market, safe in the knowledge that European legislation will provide the appropriate freedoms and, if required, adequate protection. My report proposes that any clarification of Article 11 will work best if the country-of-origin principle is applied to all investment services provided across borders.
From the point of view of professional investors, it will be possible to switch quickly to the country-of-origin principle, but, from the consumer' s point of view, applying the principle still requires greater harmonisation of the conduct of business rules that affect them. This is very much under way in FESCO. Complete harmonisation is not a prerequisite, however, for the country-of-origin principle to also be applied to retail sales of investment services for the small investor. This solution would, at the same time, be consistent with the electronic commerce directive, which was passed last spring, and which Member States are under an obligation to adopt as part of their own legislation by 1 January 2002. If these two directives do not work on the same basis, the position of customers purchasing investment services electronically will be different from that of consumers who purchase their services through traditional channels. The basic idea behind the classification of investors is that different investors need different kinds of protection and, on the other hand, are entitled to demand greater freedoms as their experience grows. European legislators must ensure that a lighter conduct of business regime should apply to professional investors than to small investors, who need more legal protection.
Restrictions on the freedom to provide services can only be sustained when they are applied in the interests of the general good. For example, for transactions between professional investors rules for the general good should not be required. Restricting the market for reasons connected with the general good is not, as a rule, possible either. Any interpretation of Article 11 of the directive on investment services must in any case be consistent with Articles 3.4 and 3.5 of the electronic commerce directive. The host country may thus only restrict the free movement of services to protect investors on a case by case basis and in compliance with a special procedure and a list of specific conditions.
Commissioner, my report contains reservations with regard to the three categories of investor, as proposed by FESCO. Rules that are too strict may make it needlessly difficult for investors in the middle category to operate in the internal market, especially as we are giving them the chance to opt-up to higher protection, if they so wish. There is also a degree of uncertainty regarding what categories will be entitled to benefit from the country-of-origin principle. The Commission should clarify this and propose that, in principle, all who have opted for the level of protection intended for professional investors, that is to say, a lighter level of protection, should always be able to benefit from the country of origin system in cross-border services. Another issue which merits further consideration on the part of the Commission is the application of rules for marketing and advertising. The current ISD already states that the right to market services in the internal market can only be restricted for reasons connected with the general good. Despite this, many Member States have included advertising rules in their conduct of business rules. This may lead to rules that overlap.
Finally, I would like to mention the proposal by the Lamfalussy Committee that the revision and updating of the ISD would, in many respects, be an ideal example of a legislation project where the new procedure proposed by Mr Lamfalussy could be applied. The problems in the present ISD have mainly led to difficulties of interpretation, so it will be important to ensure the amended directive is implemented consistently at national level, to achieve a successful result. Just to have a good and relevant directive will not be enough.

Villiers
Madam President, I welcome and support both the reports we are discussing today. They are excellent and I congratulate both the rapporteurs on the hard work that they have done on them. It is vitally important to get the investment services directive right because the rewards will be an increased return for savers and cheaper products for consumers. But the ISD, I am afraid, symbolises much of what is both good and bad about current EU legislation. It is a good idea in theory but it has not yet delivered in practice. It has produced a single market on paper, but not yet a single market in reality. It was supposed to have made it possible for a firm or a company complying with its own home rules to have a passport to trade anywhere across the European Union. It has not delivered that in practice because of differences in interpretation between Member States, because of differences in enforcement between Member States and because of poor implementation.
It is really unacceptable that almost eight years after adoption there are still some Member States trying to work out how they are going to enforce this directive. The result has undermined both the country-of-origin principle and the principle of the single passport, because operators still face multiple, overlapping and sometimes conflicting sets of rules when they trade across the European Union - just the problem which the ISD was supposed to tackle.
This is really a textbook case of where the single market legislation has not actually delivered. We have an increased administrative and bureaucratic burden, which still leaves different firms facing over 15 different legal systems and rule systems. The conduct-of-business rules have been used by Member States to impose their own host-state rules where they are neither necessary nor desirable and I would include the UK in that. These conduct-of-business and advertising rules have been used to protect markets rather than consumers and the Commission should clamp down strongly on that.
I very much welcome the call in the two reports to move to a country-of-origin principle for conduct-of-business rules, for advertising rules, for retail investors and for wholesale investors. I hope the Commission will take note of what Parliament has said because where the Commission can be criticised in its upgrade is that it is too tentative on these vital issues. We should have a country-of-origin approach underlying this directive.
I do not see why we cannot trust consumers to pick a product from other Members of the European Union and to be protected by the financial services authorities of those other Members of the European Union. Consumers are receiving proper and appropriate protection from different countries which have been in this very close relationship now for almost 50 years. It is vital to ensure that we are consistent with the e-commerce directive, and a country-of-origin approach will be consistent with the e-commerce directive if we adopt it in the ISD.
Any exception to the country-of-origin approach, whether in the ISD or in the e-commerce directive, should be strictly interpreted, narrowly interpreted and should be eliminated as soon as possible.
Minor updates to the ISD are, of course, welcome but above all we need a change of culture. The Commission has been far too tentative in enforcement. It is unacceptable that for many years many countries simply failed to distinguish properly between professional and consumer investors as is required by the ISD. I would like to see the Commission make full use of its enforcement powers to make sure the current version of the ISD is enforced properly by every single Member State and indeed that the next version of the ISD is also properly enforced.

Gasòliba i Böhm
Mr President, Commissioner Bolkestein, ladies and gentlemen, I am happy to announce our group' s support for the reports by Mr Katiforis and Mrs Kauppi, whose proposals are a significant step forward in the creation of a single market in financial services, in accordance with the Commission' s proposals contained in the action plan on financial services.
The removal of obstacles in the Member States with regard to financial markets is essential in the Europe of the euro and will enable us to take advantage of all the opportunities offered by the existence of the single European currency. Allow me once again to repeat the comparison I have made before. What we are now undertaking in the financial and monetary field is what we undertook ten years ago with the establishment of the European single market for goods and services, ensuring the general freedom of movement for capital, workers and goods. We have set a timetable: 2005, and our fellow Members' proposals, I believe, move in the right direction. They support the Commission' s proposals, they highlight the need to meet the timetable and, at the same time, they offer and indicate specific aspects. With regard to the report by Mrs Kauppi, I believe that paragraph 16, on the mechanisms which have been applied and proposed - and which the Commission has already implemented - to resolve cross-border extrajudicial disputes relating to financial services, is essential to overcoming possible problems at Member State level. This system and this concern also appear in Mr Katiforis' s report. I congratulate both of them on their work and I repeat that we support them.

Karas
Mr President, Commissioner, ladies and gentlemen, firstly, I am pleased for both rapporteurs that their reports have met with such broad approval, not only in the Committee but also here in Parliament. It shows that we are all of the opinion that an accelerated process of change on the internal European financial markets must also have consequences for our political work. Of course, this was also highlighted in the report by the Committee of Wise Men on European securities markets regulation chaired by Mr Lamfalussy, which we will be debating later on this week.
A second piece of evidence for this change is the exponential growth in the volume of shares, of over 30% each year between 1995 and 1999. This is of prime importance, owing to the strategic significance of well-functioning financial markets for increasing economic prosperity in the EU. When the investment services directive is upgraded, three aims must be taken into account simultaneously: firstly, speeding up market integration; secondly, improving the level of protection afforded to investors, and thirdly, market stability. On the one hand this benefits the markets and on the other it protects investors. In this way, financial stability will be safeguarded in the future.
Two further points, which have also already been mentioned, are of concern to me here. Firstly, a fully operational European passport needs to be created for investment firms. In order to use this opportunity and remove the existing obstacles to its introduction, we urgently need to move over to the country-of-origin principle. For major investors this should happen as quickly as possible and for small investors - Mrs Kauppi has already referred to this - the same principle applies but transitional arrangements will probably be necessary. An additional issue in this context is the harmonisation of conduct of business rules, which is a prerequisite for a healthy internal market.
My second concern is that there should be genuine competition between stock exchanges and trading platforms. To make fair competition possible an appropriate and efficient system of supervision needs to be set up. This should avoid competition being determined and thus distorted by differing rules and the ensuing hunt for the more favourable regulatory framework.
There is a trend towards ever increasing investments in securities - we also talk about this in connection with pension funds - and that is why I would recommend speedy adoption and implementation, hopefully before 2005. This too would be in line with the Lamfalussy report.

Bolkestein
I thank both Mr Katiforis and Mrs Kauppi for the reports which they have produced. They reflect a very large measure of agreement. It is good to hear that speakers have supported these two reports. The Commission has also taken cognisance of these two reports with great pleasure.
It is well-known that the investment services directive is the bedrock of the EU legislative framework in the field of securities markets. That directive defines common regulatory parameters for investor protection and orderly markets. Five years after its entry into force it is now time to test its roadworthiness. The Commission believes that the judgment must be mitigated. While there have been significant improvements, cross-border provision of investment services continues to be dogged by legal uncertainty and impediments. More fundamentally, the securities trading environment has undergone seismic shifts which pose new challenges for EU regulation.
The Commission welcomes the timely and coherent responses of the European Parliament to the two communications on the investment services directive. The reports provide clear pointers for the Commission when it prepares its proposal for a modification of the ISD which is due for adoption by the end of this year.
I will now mention a few specific points which are contained in the report prepared by Mrs Kauppi. The most immediate and tangible objective of the ISD remains the provision of a single passport for investment firms. The Kauppi report cogently addresses the principal hurdle to be overcome, which is the overlapping and conflicting national rules for conduct of business. The approach outlined in the communication in Article 11 has been constrained by the inherent ambiguity of the provision and the absence of relevant jurisprudence of the European Court of Justice. Despite this, the communication sends a clear message, that the cross-border provision of investment services to professional investors should already be subject to home country conduct-of-business rules alone. The definition of professional investor put forward by the Commission on the basis of a consensus reached between national supervisors and FESCO represents a useful starting point.
Before mentioning some elements which are specific to the report prepared by Mr Katiforis, perhaps I could mention a few aspects which are common to both reports.
The forthcoming revision of the ISD provides an opportunity to clarify the conditions under which firms and investors engage in cross-border business. The Commission is convinced that the approach advocated by both reports is the only one consistent with a single market. Furthermore, it will ensure that both on-line and off-line provision of investment services will benefit equally from the country-of-origin principle of the e-commerce directive. The challenge is to reach this goal in a manner which offers sufficient safeguards to the retail investor. The ISD communication suggests that this requires some further convergence of conduct-of-business and advertising rules for retail investors. The Commission is hopeful that such convergence can be achieved within a relatively short time-frame.
I now come to a few points which are specific to the report prepared by Mr Katiforis. The Commission believes that inter-exchange competition and the emergence of infrastructures for cross-border trading of securities raise important new regulatory issues. These are not adequately addressed by the current ISD. The Katiforis report cautions against sweeping changes at this time. The Commission is acutely aware of the need to do no harm and of the risks of acting at a time when markets are in a state of flux. However, profound changes in the organisation of the trading infrastructure and increased involvement of household investors in equities investment call for fresh thinking. The Commission agrees with the Katiforis report that clarification of ISD provisions relating to exchanges and trading systems should concentrate on the risk to market integrity. The Commission also agrees that the primary focus of attention should be equity markets where retail investors are more exposed. Mr Katiforis, in his speech, said that he wanted a Commission proposal concerning the integrity of markets as soon as possible. As he may or may not know, the Commission is in the last stages of preparing a proposal on market abuse. That will hopefully be made known in a few weeks time.
A strengthened ISD will not in itself prevent the sizeable market corrections that we have witnessed in recent weeks. However, a revised ISD can help to contain market excesses by promoting transparency, protecting integrity and ensuring that investment firms always act in the best interests of their clients. Moreover, it can ensure that these protections are enjoyed by investors throughout the European Union, regardless of the origin of the security which they are purchasing or the exchange on which that transaction is executed. Without such a framework, the Lisbon objective of a single integrated capital market, which we all want and need, will remain a dead letter.
I shall now provide a more specific reply to two points raised: the first being criticism of the agreement reached within FESCO on the definition of professional investors, and the second a reply to what Mrs Kauppi said about the link between this issue and the Lamfalussy report.
On the first issue, criticism of the FESCO definition of professional investors, as yet no legal content has been given to the concept of professional investor by the European Court of Justice. The FESCO agreement represents a first informal attempt to establish a collective European view on this concept and it should be welcomed as a valuable first step towards clarifying this important operational concept. The Commission is, of course, aware of widespread concern that the FESCO agreement is overly restrictive in determining which investors qualify automatically as professionals. This deprives many large and sophisticated investors of the benefits of operating under a single, that is, home-country, light-touch supervisory regime. Nevertheless, given the prevailing uncertainty surrounding the term 'professional investor' , the Commission believes that the wisest course of action is to make use of an approach which has won support from all national securities authorities. The proposed approach to the definition of professional investor, as set out in both reports, would seem to offer additional advantages from the perspective of a properly functioning single passport. The Commission will study these proposals carefully when preparing the revision of the ISD.
Finally, on the matter of the interface between this proposal and the well-known Lamfalussy blueprints, the Commission notes the observation made by Mrs Kauppi in her explanatory statement that the revised ISD is - I quote - "a prime candidate to be adopted and implemented according to any new approach which may be agreed in the light of the Lamfalussy reports". The Commission agrees with that view. The ISD communication clearly states that the lack of capacity to issue legally binding guidance on implementation of ISD provisions has been one of the principal factors contributing to the shortfalls and uneven implementation which have bedevilled the ISD. In view of its increased scope and complexity, a revised ISD is likely to suffer even more from such defects: hence the importance of the Lamfalussy report for this issue as for a number of other ones.
In conclusion, may I once again thank both rapporteurs for the important work they have been doing. May I also thank other Members of this Parliament who have intervened, in particular Mr Gasòliba i Böhm and Mr Karas. The Commission would like to assure Parliament that it will act accordingly.

President
Thank you very much, Commissioner.
The joint debate is closed.
The vote will take place tomorrow at 12 noon.

Cosmetic products
President
The next item is the debate on the report (A5-0095/2001) by Mrs Roth-Behrendt, on behalf of the Committee on the Environment, Public Health and Consumer Policy on the proposal for a European Parliament and Council directive amending for the seventh time Council Directive 76/768/EEC on the approximation of the laws of the Member States relating to cosmetic products [COM(2000) 189 - C5-0244/2000 - 2000/0077(COD)]

Roth-Behrendt
Mr President, ladies and gentlemen, when we adopt new legislation in this House we always assume that it will constitute an improvement on the current situation. That is why I, as rapporteur, also require the seventh amendment of the cosmetics directive to be an improvement on the status quo. And is it? This is what I am asking myself and also all of you. In response, many in this House will say with me: no it is not. The sixth amendment of the cosmetics directive, for which I also had the honour of being rapporteur some years ago, clearly provides, for example, that in a number of stages an absolute final date should be set for animal testing for cosmetics, a date after which no more animal testing should take place.
I would ask that we all bear in mind that there are now more than 8 000 tested ingredients which people can use quite happily. Now, however, the question is: what happens with new ingredients?
This test and marketing ban - in effect a sales ban - from the sixth amendment has been converted by the Commission into a straight ban on testing in the territory of the European Union. This therefore means that in the future, people will be able to carry out tests on animals quite easily, for as long as they wish, just a few kilometres further away. Now I am hearing from all sides - including from the Commission - how sympathetically and favourably they look upon my amendments, but that unfortunately they cannot accept them because there are trade-related issues preventing them from doing so. Is this true? No, it is not. No one is yet in a position to say which way the ruling would fall in a case before the World Trade Organisation because no case has yet been decided on the basis of the protection of animals and moral considerations. Whether the Commission's trade argument would carry weight at all is all the more questionable because recently, a few months ago, the United States itself decided in its Dog and Cat Fur Act to adopt laws which are based solely on animal protection and on the moral sensitivities of the population.
That is why I would invite the Commission to be rather more plucky at this juncture and to make its political priorities clear. Mr Liikanen, you know how highly I esteem you, at this stage you really must nail your colours to the mast and declare your intention to do your political duty. Stand up to your colleague, Mr Lamy, and others, or explain to them that they are mistaken.
What does 'a marketing ban some time in the future' mean? Of course, I am also starting from the assumption that the products are safe. I am not forcing anybody to spread an unsafe product on their skin or on their children's skin or even to brush their teeth with an unsafe toothpaste. I would never want this.
That is why I wish to propose a way forward which I consider to be very reasonable and which was generously supported by many colleagues in the Committee. Yes, there should be a test ban. Yes, there should be a marketing ban - a sales ban - wherever there are alternatives which have already been evaluated. Some time later - five years in my amendment, perhaps even later - there should be a total sales ban. During this time, industry also has the chance to develop alternatives and to invest in research. In the intervening time there should then be a labelling system so that consumers know, and it is fair that they should, whether they are buying products which have been tested on animals.
The seventh amendment should, of course, bring even more improvements. Can it really be the case that the Scientific Committee on Cosmetic Products in the European Union should ascertain that ingredients - fragrances - cause allergies and these fragrances not be indicated on the label? This is unacceptable. It contravenes the principles which we have in the European Union, namely that products must be safe, but also clearly identifiable and genuine. So they have to be labelled. What I am proposing is nothing more and nothing less.
Surely it is also only right and proper for consumers in the European Union to know when they buy a product how long it can be kept for and how long the active ingredients will remain effective? For how long will the toothpaste still taste good and for how long will the perfume or the skin cream remain safe to use and not turn rancid? That is why I am proposing to this House, with the support of the Committee, that we develop a symbol and that the Commission prescribe a clear label to go with it for products with a durability of over 30 months. Once they have been opened, how long can they be kept?
In my opinion, these are all proposals which improve the sixth amendment - that is why we are here after all - and which afford a better level of protection to consumers, but also keep them better informed and give them the right to choose. In the first reading of a piece of legislation this is definitely what we all want and what we should have. After all, we also need to go into the second reading with something to play for. I am convinced that not only consumers can be happy with this but also representatives of the cosmetics industry, even if they still give the impression that they are downtrodden and victimised. I think that, at the latest, after this reading and also after the second reading, they will recognise that we need to join forces and achieve a viable working relationship. I invite them to do so here and now.

Seppänen
Mr President, the Committee on Industry, External Trade, Research and Energy' s area of specialisation is industry, external trade and scientific research. The Committee' s opinion focuses on the examination of the ban on animal experiments in testing cosmetics specifically from these points of view.
It would appear that the global cosmetics industry has been unable to come up with alternatives to animal experimentation as quickly as the European Parliament would have hoped. Cooperation between industry and the scientific community has not worked, and researchers have not availed themselves sufficiently of the EU' s fifth Framework Programme in the development of alternative methods.
To speed up the introduction of alternative methods, our Committee is suggesting that a ban on animal experiments in the testing of end products and cosmetic ingredients should come into force according to a faster schedule than that which the Commission is proposing. Regarding the marketing ban on products proposed by the Committee on the Environment, Public Health and Consumer Policy, according to information received by the Committee on Industry, External Trade, Research and Energy, it may be that a marketing ban, a sales ban, on cosmetic products that have been tested using animals is in conflict with WTO regulations. That is not entirely certain, however, as no precedents have been set. As a specialist committee in the field, the Committee on Industry, External Trade, Research and Energy is not proposing a sales ban. This should serve as something of a warning to Parliament. It may turn out that a sales ban on cosmetics tested on animals outside the EU will lead to countermeasures in the WTO.
As draftsman of the opinion of the Committee, I see it as a problem that may arise, but I also understand the view of the Committee on the Environment, Public Health and Consumer Policy: we have to test the limits of the WTO position. As it is a matter of ethical principles with regard to the relationship between people and nature, an industrial bloc such as the EU must be able to standardise its financial and industrial activities. Our Committee also defends the consumer' s right to information through the proper labelling of products that have not been tried out on animals.

García-Orcoyen Tormo
Mr President, I would firstly like to inform you that the correct version of Amendment No 33, signed by myself and Mrs Müller, is the English version. It appears that there has been an error in the translations.
I am not going to get involved in the arguments for and against animal experimentation, which at this stage we all know and which, undoubtedly, together with the ban on sales and marketing, are the focus of this seventh amendment of the directive.
I will say that, as shadow rapporteur, I have been able to note a clear majority opinion, in all the groups of this Parliament, in favour of banning both sales and marketing and experimentation.
However, I feel I should mention the concern of some Members of this Parliament, most of whom are reputed scientists, who view with alarm the total ban on experimentation within the terms and time periods put forward in Mrs Roth-Behrendt' s amendments, since, according to her criteria, compliance with them could compromise the security of the product or impede progress in the field of scientific research into cosmetics.
I believe that this is an opinion which should at least be taken into account and which we should try to incorporate into the text, since we must not forget that the aim of the legislator must be to establish a balance between two values: the safety of consumers and the protection of animals. In the quest for this balance we will have to take into account not only economic, socio-cultural and animal protection factors, but also scientific and legal factors.
I completely agree with the rapporteur on the need to put an end to experiments on animals. However, as I have said, the scientific community does not currently seem to totally agree with the idea that a more or less immediate ban would aid consumer safety.
Nevertheless, I believe that it is extremely important to find legal incentives, and above all practical ones, which will speed up research procedures, so that, in the very near future, we can say that animal experimentation is confined to history.
I therefore fully support the idea of banning experimentation on animals and I agree with the rapporteur that a date should be set in order to speed up this process. However, I believe that the time limits indicated by the rapporteur should be more flexible, bearing in mind that in the last debate in Parliament, if I am not mistaken, the Commission said that the necessary alternative methods could be developed in approximately ten years time.
In any event, it must be said that, in the view of my group, the amendment proposed by the Commission does not solve the problems already raised in the sixth amendment, mainly those relating to the World Trade Organisation. It merely eliminates the provision on the ban on sales and marketing and extends the time limit for banning experiments.
We in the Group of the European People' s Party (Christian Democrats) and European Democrats view the Commission' s proposal with concern, since it appears to be inconsistent with its own previous position, it does not resolve the problems of the World Trade Organisation, which have been going on for years, and it restricts itself to extending time limits for banning experimentation.
Our group therefore wishes to support Amendment No 21 which proposes that Parliament reject the Commission' s proposal in its entirety. The Commission should probably redo its homework and then present a more coherent text that, above all, offers solutions to the problems at hand.
Another issue which I want to deal with is the list of substances which may produce allergies: Mrs Roth-Behrendt includes a long list, and our group limits them to thirteen, which are already described as dangerous, because we do not believe it is a good idea to produce a very long list of substances, most of which are of minimal danger, which would result in confusion amongst consumers, and which would not distinguish between what is dangerous to them and what is not.

Myller
Mr President, I would like to thank the rapporteur, Dagmar Roth-Behrendt, who has done an excellent and thorough job. The report is also to be praised for its realistic approach, but at the same time, for its stringency with regard to timetables. The aim must be to impose a ban in the EU area on tests using animals and the marketing of products that have been tested on animals. The rapporteur has also hopefully discovered a way of influencing policy in the Council for the implementation of swift measures by calling for an immediate ban on the sales of products tested by using animals. A derogation would only be granted in respect of products for which there is no other alternative to animal experimentation.
The rapporteur quite rightly points out that both the Commission and the Council have failed to take sufficient action to ensure that the existing legislation on a sales ban is implemented. We have given in too easily to pressure from the WTO. When we talk of new products it is worth asking how many new products we still need. Do we need products that are only distinguishable from each other through advertising? Naturally we need to ensure that products are free of risk to the consumer. In my opinion, it is industry that must mainly bear the responsibility for developing non-animal alternative tests, especially with regard to the costs involved. Of course, when we speak generally about consumer policy Community financial support can also be used. Labels must be clear, and allergies must be taken into consideration, especially with products intended for children.

Davies
Mr President, the Commission's proposal for a ban on the testing of cosmetics on animals - but only within the European Union - is totally inadequate. I agree entirely with the rapporteur. It will allow us to pretend that we are doing something to prevent animal cruelty, but while maintaining the same testing requirements not one fewer animal would suffer. By contrast, the rapporteur and the Committee, in calling for a sales and marketing ban, are maintaining the previous signal and the moral guidance about the relationship between humans and animals: that we do not accept that cruelty should be practised on animals for no better purpose than to develop products which are essentially frivolous and designed to flatter our vanity.
The Committee has addressed some spurious issues put up by the industry, such as that of the possible health benefits from new products, which they said could be reclassified as pharmaceuticals. Our emphasis is on saying that the industry should spend a little less on marketing and a lot more on developing alternative testing methods. Despite the vociferous objections of the industry, with 8 000 products already on the market, with the shop shelves heaving with deodorants and shampoos, make-up and hair gels etc., it hardly seems likely that a great many people are going to lose out if a marketing ban is introduced.
At the heart of this debate lies the problem of the World Trade Organisation. The truth is we do not know whether possible objections can be sustained. If they can, then change is needed. Whether it be this issue or the environment or the application of the precautionary principle, we must have the democratic freedom to be able to insist on some minimum standards acceptable to the majority of our citizens. It is totally unacceptable that those who seek to bring about improvements in animal welfare should be told by the Commission to put up the white flag and run away from the battlefield even before we know whether the enemy is armed. That would not indicate wise judgment, but abject cowardice demonstrating a total want of real leadership.

McKenna
Mr President, I would like to congratulate the rapporteur on her work and the work of the Committee. It is a major improvement on what the Commission has actually proposed. The proposal from the Commission is not only fundamentally flawed but it is also extremely disappointing. The fact that they are abandoning the sales ban is an absolute disgrace, apart from the fact that it was supposed to come into effect in 1998.
The Commission did not actually deliver on what was promised in relation to the testing ban, as has already been pointed out by Mr Davies. It is a complete cop-out because the testing ban is just going to ensure that EU multinationals will carry out animal testing outside the EU but the products will still be for sale here. What we need is both a marketing sales ban and a testing ban and we must do that now.
The argument about fear of a World Trade Organisation challenge is completely unfounded. There is no reason why animal protection cannot be a legitimate reason for adopting trade restrictive measures. Even the WTO itself recently confirmed to us that the US clearly agree because this is the basis which they use to ban the import and sale of dog and cat fur. The WTO argument is just an excuse not to deliver on what was originally promised.
In the report there are a number of very important improvements in relation to consumers and consumer information. Ingredients in cosmetic products are now to be listed in full, including the ingredients of perfumes information which so far has not been available. It is great that the public will actually have access to this information because lame excuses were used in the past for refusing it. Cosmetics containing any of 26 fragrances above a certain threshold are to be labelled with a warning which says 'could cause an allergic reaction' . We would have liked to see a complete ban on these fragrances, but unfortunately we did not get support within the Committee for that. That should have been the line to take: if they are dangerous then they should be banned, rather than saying 'they may cause problems' .
As regards the use of fragrances in baby products or products for intimate hygiene, we would have liked to have seen a complete outlawing of fragrances in baby products. This is completely unnecessary, it is also exposing babies and children who are extremely vulnerable to unnecessary risks.
Hazardous substances that are carcinogenic, mutagenic or toxic should not be used in cosmetics at all under the current proposal unless they are evaluated by a scientific committee and found acceptable. This will actually encourage more animal testing. Normally I do not take much notice of the lobbying information I get in this Parliament, in particular from industry, but I was amazed at 'Cosmetics - your choice, our responsibility' from the European Cosmetics, Toiletry and Perfume Association. As Mr Davies just pointed out, it is trying to flatter our vanity suggesting we really need to continue testing on animals so that we remain clean, so that we can actually correct body odours; in other words, that we can improve on nature and change our appearance. This is all ludicrous and it is completely unacceptable that animals are tortured for this sort of excuse. If you look through the information from the industry there is not one photograph of what animal testing really involves and the consumers should know about that as well.

Blokland
Mr President, this debate on the subject of animal protection reminds me of the foot-and-mouth crisis. In the name of international trade, tens of thousands of healthy animals are being slaughtered. In this light, the testing of cosmetics on animals pales into insignificance. Nevertheless, this subject is not unimportant. I believe that all these animals are creatures of God and deserve to be protected for that reason. In addition, we have been given animals to use for our daily nutritional needs.
Animal experimentation is an entirely different matter. We can accept experiments on animals for the development and testing of essential medicines. There are, however, less essential purposes for which animal tests are used. In my opinion, these also cover cosmetics.
We all know too well now that an increase in pressure from society has prompted the European Parliament to press for a ban on animal testing for cosmetics. After all the respite which the cosmetics industry has been granted, we should clarify the matter once and for all. I therefore back Mrs Roth-Behrendt' s report. I do wonder, however, whether we should amend the directive at all, since existing legislation is clear and a further delay is undesirable and unacceptable.
As far as perfumes are concerned, I do not believe that these should be tested on animals for any allergic reactions. A warning on the label that these could cause an allergic reaction should, in my opinion, suffice. We are, of course, left to deal with the import of cosmetics from non-EU countries and the international rules in this connection. This should, however, not stop us from forging ahead. It is hoped that in the rest of the world too, a broadly-based discussion will take place at a high level, at which point people will realise that animals should not be used for absolutely everything. If this leads to a more limited choice of products, so be it.

Thomas-Mauro
Mr President, the amendment to the directive on cosmetic products has provoked intense debate on the issue of animal testing. The text seems to have abandoned the idea of a marketing ban on new cosmetics tested on animals and prefers to confine itself to a ban on testing cosmetics on animals within the European Union.
Of course, no one is in favour of animal testing. Nevertheless, in this case, we must be seen to act in a realistic and consistent manner. Animal testing represents only a very small part of cosmetic testing and, besides, it is destined to be phased out within ten years, thanks to research undertaken by laboratories to find new types of testing to replace it. In the current situation, however, there is a lack of sufficiently reliable alternative methods. Furthermore, the general strength of feeling for an immediate and outright ban on animal testing seems quite strange, at a time when tens of thousands of animals are being slaughtered on our farms, without any hesitation whatsoever, in order to combat foot-and-mouth disease which could be eradicated with a mere vaccination. To put it mildly, does that not amount to an unfortunate clash in our agenda?
An immediate ban on animal testing may also lead laboratories to carry out their testing on people, who are so poor that they are forced to accept anything in order to survive. So, then, it will not be pictures of rabbits with sore eyes that you could be feeling sorry about; it will be pictures of women in the third world who are disfigured as a result of allergies. As usual, it is the poorest people who will suffer from our legislative whims.
The question is not to find out whether we are in favour of animal welfare, but whether animal welfare counts for more than the welfare of the poor. Basically, if we interfere too much in the work of our industries, the latter will take their business outside of the European Union so that they will be able to compete with other countries and particularly the United States, since testing on animals will not be banned there. Will thousands of workers' jobs be put at risk? Of course they will, and once again, it is the least well-off who will foot the bill.
Ladies and gentlemen, does this sound like the social Europe that you have been hoping and praying for?

Nisticò
Mr President, I appreciate the consistent way in which Mrs Roth-Behrendt has developed her report and, in particular, the need to bring to an end a debate which has lasted for many years now. I also share the public's concerns regarding animal experimentation; when this is a matter of repeat trials on active ingredients and principles which have been known for years and are already on the market, then the sacrifice of more animals serves absolutely no purpose. However, Commissioner, when, as I point out in an amendment supported by over 50 Members of Parliament, it is a matter of new cosmetics containing new ingredients which have never been tested in the past in order to establish their toxicological profile in laboratory animals, then, as a scientist, I am convinced that it is essential to carry out an initial set of experiments on animals before cosmetics are used by human beings and before they are placed on the market. If new cosmetics are not tested on animals, I would like to make it quite clear that this could lead to potentially toxic risks for men, women and children alike. There would be a risk of toxic effects on the liver and nervous system, and even cancer. And who would be responsible then, my dear Commissioner? For all these reasons, I strongly urge the House to adopt an amendment tabled by myself and 50 other Members, which calls for barriers not to be placed in way of the progress of science.
As a scientist, I would like to make another point, dear Commissioner, and that is that, although it is important to develop, improve and finance alternative methods, they will never, never - and I am saying this as a scientist, as a man who has worked in laboratories for 35 years - they will never be able to reproduce the complexity of an animal or human organism.
Finally, it would appear absurd, moreover, both in scientific terms but also in terms of existing international agreements, to prevent the marketing in Europe of those very cosmetics which are the safest because they have been tested on animals in the past.
For all these reasons, dear Commissioner, I support your report, the Commission's report, which is not a hit-and-miss report but a report based on the recommendations of an international scientific committee. I therefore support it and I call upon Parliament to adopt amendments which would enhance it and which would make it possible, at last, for the entire report to be adopted so that this debate can be brought to a close.

Whitehead
Mr President, Mrs Roth-Behrendt put it concisely. The seventh amendment is a backwards step - we all know that. It is not even the status quo. But to look at some of the protestations of the cosmetics industry you would think that this directive is something new. It is not. It has been with us for many years, and for many years we hoped and believed that an effective test ban, conditional on a phased introduction of alternative testing, was on the way. There is a phrase in the Bible that colleagues will know: 'Hope long deferred maketh the heart sick' . If we are heartsick today it is because of the nature of that deferral. Those who deferred our hopes should listen now.
Many in the industry not only accept the need to end animal testing, but have also put their own resources to that end. I have certainly benefited from discussions with them. It is true also that, to follow Mr Nisticò, some of the experiments that can be put in place involve human volunteers, human and animal tissues, and in vitro testing. The development of these over the last few years has been a major step forward. But now the industry has to demonstrate that it has a realistic timetable for developing alternative tests. It is simply not good enough to say, as this glossy publication does, that you cannot set these timetables because that would be the equivalent of announcing the date for a cure for cancer. That is not the case at all. We are looking here at the way in which they might in this decade get to the point we and the public desire, and they will only do it with the looming incentive of a marketing ban.
Equally, if we detail the allergens present in these fragrances, they are not being driven out of the market. It is a necessary precaution which should not threaten a single valid product. We have done it elsewhere, at great gain to human health. All the more reason to do it for products which, as I fully accept, contribute to human happiness and wellbeing. We shall all be happier still when we can use them with a clear conscience, knowing that unnecessary animal testing has gone for good.

Paulsen
Mr President, ladies and gentlemen, Mrs Roth-Behrendt' s report is excellent, and I am pleased that there are to be restrictions upon animal experiments.
Mrs Roth-Behrendt also proposes a total marketing ban on animal-tested cosmetic products which is to come into effect five years after the adoption of the directive, even if no alternative testing methods are available. This strategy may be in danger of temporarily restricting product development in the cosmetics industry, but it will considerably increase the incentives for developing alternative testing methods that do not involve animal experiments. Nonetheless, the proposed ban on animal experiments is not in itself enough, because the industry could quite simply conduct its experiments outside the EU instead. That is why a marketing ban is also needed. Such a ban would prevent producers in non-EU countries from obtaining market advantages by being able to continue making use of animal experiments. Instead, competition would mean that other methods would have to be developed.
As a liberal, I care a great deal about the rights of individuals. I take the liberty of also including the right of animals not to have to be exposed to unnecessary suffering. I also care a great deal about free, informed choice on the part of consumers. It is therefore important that, through detailed and accurate labelling, consumers should immediately be given a chance to adopt positions on matters themselves. In this connection, I would ask you to pay particular attention to Amendment No 39, which proposes that animal-tested products should be required to be labelled with the words, 'Tested on animals' .
With a marketing ban and a ban on animal experiments, together with other measures supported by the Committee on the Environment, Public Health and Consumer Policy, I believe we shall make significant progress, I am glad to say.

Evans, Jillian
Mr President, I would like to congratulate the rapporteur on a very good report. There was also a very good debate in committee.
The issue of animal testing has been of concern to this Parliament for a long time and is also reflected in the level of lobbying by constituents who want to keep the ban on marketing cosmetics. It is time for us to ensure that action is taken; that the concerns of our citizens and those who care about animal welfare are properly addressed by a complete ban on sales of cosmetics tested on animals and a testing ban. As other Members have said, there have been enough postponements: from 1998 to 2000, and then to 2002. We have to set a date and keep to it. There can be no justification for making animals suffer in tests when there are proven, effective and safe alternative testing methods and 8 000 cosmetic ingredients already in use. And we are talking about cosmetics, not medical products; we are talking about shampoos and anti-wrinkle creams, and as Mr Davies said earlier, there is certainly no shortage of those in the shops already.
Consumers must have the right to choose whether the products they buy have been animal-tested and to be warned if those products contain allergens, so the issue of labelling is essential. We would have liked, as a group, to have seen the report further strengthened by the adoption of a ban on the use of allergenic fragrances, particularly in baby products.
So I would urge Members to support the report, which is in line with the demands of the majority of the people we represent throughout Europe. It would not endanger consumer safety and it would certainly force the cosmetics industry to speed up development of the alternatives which we know are available and which can be developed by alternative testing methods in future.

Flemming
Mr President, in 1992, animal welfare organisations from all over Europe presented the European Parliament with the biggest petition ever submitted in the world, a petition signed by 2.5 million people, who in signing it were expressing their support for a ban on animal testing in the cosmetics sector. My dear Commissioner, I am well aware that when one holds such high office, one no longer needs to be directly elected by the people. I am quite certain, however, that this will also make a great impression on you and that it will also be clear to you that a very large proportion of the European population backs this request.
The reason for the recent postponement of the marketing ban is quite simply the Commission's fear of the WTO. And now the proposal is to replace the marketing ban for cosmetic products with a ban on animal testing in the EU. Do you really believe that the 2.5 million signatories in Europe, the general public and also this Parliament do not realise what is being proposed here? It is rather embarrassing. If we cannot even manage to oppose the WTO on such a ridiculous matter as cosmetics and formulate our own moral standards, what will happen with more important issues, such as, for example, hormones in animal products of some kind? What on earth will we do then? We will be even more scared.
Allow me to make it clear that this is not about medicinal products - this is sometimes suggested subliminally - but solely about new products. Everything which is already on the market now, which you can see in any airport, from Elizabeth Arden to Ellen Betrix, all of this can continue to be sold and marketed. One more thing for the benefit of the scientists here in the room, animal tests are not 100% reliable. Any scientist will admit that this is true.
Finally, with your permission, I will cite a really great European, perhaps one of the greatest Italians ever to have lived, Leonardo da Vinci. Even so very long ago he said: the generations which come after us will shudder when they discover how we treat animals.

Read
Mr President, I speak in support of the Roth-Behrendt report and congratulate the rapporteur on the quality and thoroughness of her report. I note with approval too that the Committee on the Environment, Public Health and Consumer Policy have adopted all but one of the amendments of the Committee on Industry, External Trade, Research and Energy.
Colleagues, without doubt, there is major and well-grounded public abhorrence about the use of animals for testing ingredients in cosmetics, and all concerned want better protection for animals worldwide. This has been reflected in the consistent line this Parliament has taken in the past.
The cosmetics industry is about marketing glamour, dreams and illusions and I am not as critical as some previous speakers about this. Without doubt much of the responsible sector of the cosmetics industry has taken considerable strides in moving towards fewer tests on animals, but public opinion is well-grounded and it is good that it has been reflected, not just in the past, but strongly reiterated and strengthened in the Roth-Behrendt report.
We cannot know about the WTO. There has been no challenge yet and the arguments in my view ring a bit hollow from the United States of America about the possible neglect of our international obligations in the same week as President Bush has so publicly repudiated the Kyoto agreement on climate change. Nevertheless, it may well be that the international cosmetics industry draws back from a WTO challenge if they know that the full glare of public scrutiny is focused on testing ingredients on animals.
It is right that we hold the line. This report is well worked out in its detail. If it does lead to a challenge under the WTO rules then we from the European Union will have to argue our corner vigorously. If we listen to those arguments, we would do almost nothing in this Parliament. It is not that we are insensitive to those arguments, but that we place them in a context of what is the stronger and the greater good. I commend the Roth-Behrendt report to you.

Bowis
Mr President, the key and emotive issue regarding this debate and this directive is how to protect the health of children and adults while ensuring the phasing out of animal testing within a reasonable timescale. As we know, cosmetics, like chemicals, pesticides and medicines, have to go through rigorous tests before they can be placed on the market for human use. A cosmetic manufacturer is legally obliged to ensure that its products are safe, both for normal use and for foreseeable misuse. The Scientific Committee on Cosmetics sets guidelines on the sort of tests that should be carried out and these include animal tests. The key is to get the test and any alternatives to existing tests into Annex 5 of the dangerous substances directive.
When we seek, as we do, an end to animal tests, we have to take account of human interests too. It would be horrendous if a child were to suffer or even die because an inadequately tested product was allowed on the market; and we have to remember that items such as toothpaste and medicated shampoos are classified as cosmetics. The industry, to be fair, has made giant strides in reducing both the number of animal tests and the number of animals used in such tests. In some cases they have replaced the test; in some they have refined it to reduce suffering; and in some they have reduced the number of animals used. To achieve an alternative takes up to ten years. Agreeing a research project, funding it, undertaking it and then having it validated by ECVAM, endorsed by the Scientific Committee and incorporated into Annex 5 requires that sort of timescale.
Looking at the Commission's proposal, we have to ask: is it effective, and is it realistic? I fear the answer to both questions is no. The Commission's proposal would ban animal testing within the EU, but that would simply send such testing to non-EU countries where standards of animal welfare may be much lower. The rapporteur has wrestled, as only Dagmar Roth-Behrendt can, to find an alternative; and if her alternative is to ban the marketing of any products that have been tested on animals, then that is fine; but on its own that could bring an end to research and improvements, including improvements to the health of children and adults, if no alternative is available.
Doing nothing is not an alternative either because that would bring no pressure to bear on anyone to seek alternatives. We have to keep the pressure on. Of the twelve tests required for cosmetics, three have alternatives now, a fourth is in the pipeline, four more have been refined or reduced, four have no alternatives even on the horizon. We must set realistic marketing and test end dates for each. We must require alternatives to be used as soon as they are validated. We must distinguish between makeup and cosmetics that have a medicinal purpose. We must stop manufacturers and retailers claiming their products are not tested on animals when one or more of the ingredients have been so tested. And I fear we must ask the Commission to take its proposal away and start again.

Roth-Behrendt
. (DE) Mr President, it is now my privilege to speak on behalf of my group and to have the opportunity to respond to a number of the points which have been made. Let me do so. I am the very first to vote only for safe products, not only on the European market but also worldwide. This is what I have done since entering this Parliament, in respect of foodstuffs but also cosmetics. Mr Nisticò, even after a sales ban, of course existing products should continue to be sold as products which are recognised as being safe. The only products which would no longer be sold would be those for which animal tests had been carried out after this cut-off date.
Your Amendment No 42, Mr Nisticò, which concerns finished products, is already covered in the existing legislation. We have already discussed this in committee. Some colleagues, including in particular Mrs García-Orcoyen Tormo and others, pointed out that we should also take the misgivings expressed by scientists seriously. Of course I wish to do so, and it is not my intention, John Bowis, to put any child, or even anyone older, at risk. I am simply convinced that with the ingredients which are available and have been tested we are already able, even today, to produce any toothpaste in the world and also, for me, any kind of lipstick, of which I am so fond.
I also believe, however, that from a particular moment in time, whether it be after five years or, Mrs García-Orcoyen Tormo, after ten years, as you propose, we need to say, no more. Either people use the ingredients now available or new ingredients are tested using alternative methods. If this is not possible then they will just have to take those which are already available. In the Committee Mr Davies 'produced' the philosophers' stone. He refuted a deadly argument. He said very clearly: in that case perhaps we need to re-examine the delimitation between cosmetics and pharmaceuticals if this new, fantastically important suncream protects us all from skin cancer. Good, the Committee has taken on board what you certainly have in mind, Mr Nisticò.
Then, some people have said, but there are already tests. Yes, there are: artificial tissue is used for in vitro tests. There are very many experiments underway, and wherever you go - you have the best contacts, Mr Nisticò, but others too - listen to what the scientists are saying; they do not have enough money. Let us make money available for this under the sixth Framework Programme for research, but let us also invite industry to invest more in this than they have done to date.
I should like to make one final point: if we decide on a test ban today, but also a marketing ban in a few years' time, we need to have a labelling system for the interim period. That is why I would invite all of you once again - and in particular my colleague and shadow rapporteur from the Group of the European People' s Party (Christian Democrat) and European Democrats, Mrs García-Orcoyen Tormo - to take another look at Amendment No 39. This is the amendment which is of the greatest significance, in conjunction with other amendments of both yours and mine.
Finally, colleagues, I should like to thank you for your very fair and constructive cooperation in the run up to our discussions in the Committee, during the vote in the Committee and also here in Parliament today.

Müller, Emilia Franziska
Mr President, ladies and gentlemen, in Germany there is an old proverb which says that you have to suffer to be beautiful. With the new cosmetics directive, however, precisely the opposite is true: beauty, hygiene and well-being without risk. Three points are of particular importance to me: optimal consumer protection, a clear label and, as a general rule, the avoidance of animal testing. Optimal care must be combined with a maximum degree of consumer protection. We can only guarantee this optimal safety by having numerous scientific tests.
Scientists are busily researching new test methods which deliver reliable research results and at the same time avoid the need for animals to suffer. It is our declared objective to bring to an end the era of animal testing. We need to support all scientific moves towards achieving this. In the future there must be no tests on animals for products and their constituents which have already been investigated once and for which reliable results are available. Nevertheless, consumer protection and product safety are our prime concern. That is why in exceptional cases, where there is no alternative, we need to allow animal testing until further notice, above all when the optimal protection of infants, children, the sick and older people is at stake, including with respect to shampoos and creams. That is why we have to permit the Member States to allow animal testing for cosmetics for two years longer than is currently laid down, provided that there is no alternative. In certain cases it is quite simply necessary to carry out tests on animals, in particular where acute skin and eye intolerances are concerned.
It is also important for consumers to know which products can cause allergies. It would be detrimental to the market and discriminatory, however, to label all the cosmetic fragrances listed in Annex 2 for this reason. That is why the only products which should carry warnings are those which have also been previously identified as allergens by the Scientific Committee. It is very important for consumer safety that there should be a clear, visible indication of the maximum and minimum durability of the product after opening. The product label should also provide consumers with clear and easily understandable information about the correct way to administer the product. This is about consumer protection and safety with a minimum of animal testing while encouraging the use of alternative methods.

Fatuzzo
Mr President, I would like to congratulate Mrs Roth-Behrendt on her important work, which I support and admire, which seeks to prevent the use of cosmetics and perfumes leading to animal experimentation. Like Mrs Roth-Behrendt, I love animals, and proof of this is the fact that I have two dogs, three cats and a guinea pig at home.
Now then, at home yesterday afternoon, caught up in this measure on which I was due to speak today, I asked my wife, Graziella Fatuzzo (née Spallina), to show me the creams she uses. When I had read the label, I said to her, 'Look, this cream even contains placenta material' , but she replied, 'Really? You are right! How horrible!' and continued to apply cream to her face.
That night, we went to bed, as usual, and I turned towards her with amorous intentions. However, she was wearing night cream which smelt horrible. I said to her: 'But do you know that these creams are tested on animals?' 'You are right, Carlo,' she replied, 'you are right' , but she did not remove the cream from her face and I could not sleep for the rest of the night. However, later on, while I was asleep, I dreamt of Mrs Roth-Behrendt. In my dream, she was my daughter's mother-in-law and we were having dinner together. There were mushrooms for dinner, and so I asked her whether she was sure they were not poisonous. 'No, no, they are fine' she said, so I suggested that we try them out on the cat. 'No!' she shrieked, 'not on my pussy cat, not on animals!' After eating the mushrooms - this is still the dream - Mrs Roth-Behrendt was overtaken by dreadful spasms and taken to hospital, where she was saved by a stomach pump. Afterwards, she said to me, in some pain: 'Tomorrow, you must vote against my report. You must call for products to be tested on animals before they are used in cosmetics, because, in actual fact, I do not want this dream to become reality.'

Sjöstedt
Mr President, our group thinks that Mrs Roth-Behrendt has done a very good job. We support all the important parts of the report. When it comes to the main issue of animal experiments, we think that this issue has been dragged out for too long. This decision concerning an effective ban on animal experiments in connection with cosmetics ought to have been taken several years ago. It is indefensible, both ethically and as far as the electorate is concerned, to test cosmetics on animals, which is something of a luxury. Nor is there any doubt about public opinion on this issue.
I also believe that, if we are to force manufacturers to find alternative methods, they have had many years in which to begin applying such methods, they must know that there is a fixed date when the ban comes into force. We know that the methods applied will vary from one area to another and that there are thousands of ingredients to choose between in cases where these methods have not been fully developed. We therefore support a comprehensive ban on these tests. If such a ban is to be effective, it nonetheless needs to be combined with a marketing ban. It is only a combination of marketing and testing bans that can be really effective, which is why we obviously support a marketing ban too.
As a counter-argument, we are told that the WTO might object to a ban. In our view, this is, for one thing, by no means certain; and, secondly, it cannot just be accepted that, by voicing its objection, the WTO can prevent tougher animal and consumer protection regulations from being introduced. That is, of course, what has to be fought for; the right to tougher, more progressive legislation. We believe, then, that this cannot be an argument for not pursuing this issue. On the contrary, the EU' s implementing this ban might also open the way for a worldwide trend whereby more countries follow suit and adopt the legislation we have in place and the methods we have developed for alternative testing procedures.
We also support the other parts of the report. We believe that more account must be taken of people with allergies. Allergies are a major and growing problem which does not only affect those who directly use products but also people in their vicinity, if such people are particularly sensitive. That is why we are in favour of tightening up on the use of allergy-causing substances.
We also think it reasonable that there should be tough rules on content labelling and that both the date of manufacture and the best before date should be stated.
This is my way of saying that we in the Confederal Group of the European United Left - Nordic Green Left will be voting for all the principal points in this report.

Liikanen
Mr President, on behalf of the Commission I would like to thank Mrs Roth-Behrendt and the Committee on the Environment, Public Health and Consumer Policy for their support and also for the discussion today. The Commission is well aware that the debate on animal testing is a very difficult and sensitive one. It has raised, and is raising, a great deal of concern among the public as many of you have mentioned here today. The issue is linked to many policy areas, all of which have to be taken into account including public health, consumer protection as well as the need for us to comply with our international obligations. I have therefore worked in constant and close cooperation with my colleagues David Byrne and Pascal Lamy, responsible for health and consumer protection and trade issues respectively.
I would like to congratulate Mrs Roth-Behrendt and the Committee on the Environment, Public Health and Consumer Policy for the many suggestions made in their report which aim to improve health and consumer protection not least by providing consumers with more relevant information. The Commission welcomes, in particular, your proposal for amendments relating to some categories of products such as products for children and intimate hygiene products. You propose the improvement of safety requirements of these products as well as the extension of the requirement of a minimum durability date for all cosmetic products which would be of clear benefit to consumers.
We share the concerns of the European Parliament on the use of substances classified as carcinogenic, mutagenic or toxic for reproduction. The Commission has proposed new measures on these products in its White Paper on the new chemical policy which is now in public consultation. Actually, I personally think that it is important for larger parts of industry to be responsible for developing new alternative testing methods. The whole issue of chemical policies is of vital importance here because more and more new tests are needed and for that reason we need more efforts to create alternative methods quickly. This cannot be done by one part of industry alone.
With regard to the fragrance-allergy issue, the Commission welcomes the introduction of a labelling system for allergenic fragrance ingredients. This will represent a positive improvement to the current labelling requirements allowing consumers who are sensitive to certain ingredients to avoid products which contain them.
On the issue of animal testing, the Commission understands and shares the objective of Parliament to reduce animal pain inflicted during experimentation. Let me recall the reasons behind the Commission's proposal. The aim is to ban animal testing for cosmetics within the EU and to make the use of alternative methods mandatory at the earliest opportunity while respecting our international commitments. An additional primary objective, however, is to provide European citizens with the highest possible level of safety in all products which they use. This proposal has the advantage of achieving these objectives by providing legally and practically enforceable measures without giving rise to possible trade disputes.
By contrast, a marketing ban would give rise to serious difficulties according to the Commission's trade and legal experts. It would have a significant impact on trade and would run a serious risk of a challenge under the disputes settlements system of the WTO since it would inevitably lead to discretionary treatment between imported and domestic products. The Community is bound to ensure compliance with its international obligations. Such a unilateral measure would run contrary to the EU's current policy in the WTO to seek the inclusion of animal welfare issues in the discussions for the next round. Only a coordinated approach at international level can improve animal welfare on a wider scale. In the meantime, the Commission will continue its efforts to bring about the elimination of animal testing both at home and internationally. I am convinced that further work in close cooperation in this very difficult and sensitive issue will finally lead to a balanced solution offering genuine benefits to animal welfare while safeguarding consumer health.
The Commission can, in principle, accept Amendments Nos 1 (first part), 2, 4, 5, 7 (second part), 9, 10, 11, 12, 14 (second and third parts), 15 (second part with the exception of the suggested consultation of the European Parliament), 16, 17, 18, 19, 22, 23 (second part), 26, 29 (second part), 30, 31 (second part with the same remark as before), 32, 33 (second part), 34 (second and third parts), 38 (second part), 41 and 49 (second part).
On the contrary, the Commission cannot accept Amendments Nos 1 (second part), 3, 6, 7 (first part), 8(3), 14 (first part), 15 (first part), 20, 21, 23 (first part), 24, 25, 27, 29 (first and third parts), 31 (first part), 33 (first and third parts), 34 (first part), 35, 36, 37, 38 (first and third parts), 39, 40, 42, 48 and 49 (first and third parts).

President
The debate is closed.
The vote will take place tomorrow at 12 noon.

Environmental issues of PVC
President
The next item is the report (A5-0092/2001) by Mr Sacconi, on behalf of the Commission on the Environment, Public Health and Consumer Policy, on the Commission Green Paper on environmental issues of PVC.

Sacconi
Mr President, the Green Paper before us today on the environmental problems of PVC was presented by the Commission in July 2000, in line with the provisions of the directive on end-of-life vehicles, which introduces a new method making manufacturers responsible for the entire life cycle of a product, from its design to its disposal.
This approach, which is intended to encourage manufacturers to design products and materials which are safer and, in particular, easier to recycle, is also the basis of the Green Paper on PVC. Indeed, although the Green Paper does not deal directly with either the production or the use of PVC, it poses a clear set of questions regarding waste disposal which ultimately have a direct bearing on the product itself. I would like to make this quite clear. Although PVC has been the focus of an intense debate in recent years, and although some of the product's properties, such as its high chlorine content, make it particularly difficult to manage in waste form, my report does not seek to penalise it in favour of other plastics. Quite the contrary: the report explicitly calls upon the Commission to tackle the specific problems of this material as part of a broader strategy for plastics and to deal with the issue of differentiated collection as soon as possible from a Europe-wide perspective. I have requested that this measure's provisions on marking be extended to include all plastics as well, so as to avoid any ecomarketing.
Moreover, with regard to the PVC industry voluntary commitment, I honestly believe that this is an important step. However, it is not enough, firstly, because, in its resolution of July 1997, Parliament stated that it was no longer prepared to accept any voluntary agreement which was not part of the Community legal framework, and, secondly, because the objectives set out in the agreement are, quite frankly, insufficient, difficult to measure and therefore difficult to monitor. However, there is one extremely important thing about this agreement, namely that it has gathered the vast majority of players involved in the process of production, processing and recycling and the trade union representatives around a table to develop common strategies and draw up proposals to change the current situation. This will of industry is a positive factor and we must not waste it in our enthusiasm to regulate everything. This is why I have called upon the Commission to put forward a legislative proposal that can serve as a reference for all future voluntary agreements as soon as possible. This is why I have also proposed a different form of legislation laying down the adoption of legislative measures which, however, would only enter into force when companies fail to achieve pre-established objectives. I am absolutely certain that genuinely sustainable development cannot be implemented without dialogue and cooperation with industry.
There are many other points in my report that I would like to mention, but I will limit myself to two: the disposal of the hazardous substances cadmium, lead and phthalates, in the first place, and then the multifaceted strategy for PVC disposal. With regard to the first point, I would just like to stress how important the gradual disposal of these substances is, in the immediate term, for the health of European citizens, and that it may be even more important in terms of environmental protection.
Lastly, on the subject of waste disposal, I would like to say that the property of PVC that gives it its strength, its durability, is also something that makes its disposal an extremely complicated matter. My suggestion was to tackle the problem from several different angles: firstly, to increase the recycling quotas, starting with certain applications such as window frames, large tubes and roofing membranes, introducing 'closed cycles' recovery systems; secondly, to limit PVC incineration to new generation plant, which respect the latest Community legislation and apply the 'polluter pays' principle; and thirdly, to dump what is left at refuse disposal sites, taking into account, in this case, the new legislation that will enter into force as of 2002.
Mr President, I would like to end by thanking all the Members who have contributed to the improvement of my report by tabling amendments in the Committee on the Environment, Public Health and Consumer Policy. I feel that the text adopted in committee is genuinely well balanced and that, should the amendments rejected in committee and put forward again for the vote in Parliament be adopted now, this balance could be seriously upset.

Seppänen
Mr President, the majority in the Committee on Industry, External Trade, Research and Energy have a different opinion on the problems of PVC and their prevention to that of the Committee on the Environment, Public Health and Consumer Policy. The Committee on Industry, External Trade, Research and Energy firmly believes in self-monitoring in the PVC industry and its ability to take responsibility for the adverse effects of PVC throughout the material' s entire life cycle.
As draftsman of the opinion, I would like to say that the PVC industry has been very aggressive in its lobbying activity. It neither sees nor admits to there being much of a problem at all. In that respect their views are in conflict with the spirit of the Commission' s Green Paper. The PVC industry does not want additional studies conducted by outsiders to support their views. Industry criticises the fact that the Green Paper focuses on a study of the far end of the life cycle of PVC products. It is nevertheless justified, as problems start to appear at the stage when responsibility for the product has moved away from industry itself towards society. Governments, which must be responsible for the disposal and final storage of products, must have an interest in the possible adverse effects of PVC. Industry, on the other hand, fears these problems, as they might have an impact on the use of products and alternatives in the sector.
The Committee on Industry, External Trade, Research and Energy has made an evaluation of the Green Paper, which, in my opinion, has been greatly influenced by the industry' s aggressive line. A majority in the Committee voted in favour of an opinion in which concern for the environment and for health is linked to a strategy of voluntary commitments on the part of industry. The EU' s current regulations on product labelling, waste incineration, and sorting at landfill sites are adequate for the majority in the Committee. As draftsman of the opinion, I would like to say that I supported the minority opinion. The problems at the far end of PVC' s life cycle have to be resolved, and industry cannot do that on its own.

Oomen-Ruijten
Mr President, allow me to start by thanking Mr Sacconi. He has certainly made every effort to see whether a compromise could be struck. However, this has taken us away from a specific line of thought, so much so that the report is merely portraying all sides of the argument, and that is not the fault of Mr Sacconi alone, but of the entire Commission. I would in any event like to thank him for the consultations on this matter.
PVC has often been at the centre of a controversial debate of late. The opinions on PVC and its effects on health and the environment are very diverse. A number of Member States have already taken measures regarding specific aspects of the life cycle of PVC. Those measures are not the same across the board and can thus have implications for the internal market too. We, as the Group of the European People' s Party (Christian Democrats) and European Democrats, welcome the Green Paper and are in favour of an integrated approach which, on the one hand, protects the environment and health, and, on the other, guarantees the smooth operation of the internal market, whilst also very much taking into account the interests of employment.
PVC is different from other plastics in that a large quantity of chlorine has been added, namely 25% to 50%, and that many other additives are also used in PVC. In terms of application, PVC is inherently a sound material, something which we very nearly overlook in the discussion as a whole. Pure PVC is a rigid material, which is mechanically strong, weather resistant, waterproof and chemical resistant. We are thus fortunate, especially in the medical sphere, to have PVC. Consequently, the environmental and health issues surrounding PVC mainly gravitate towards the presence of the additives and the way in which PVC waste is handled.
Allow me to list a few of these additives. There are the plasticisers to start with. In the case of soft PVC, up to 60% of plasticisers, mostly in the form of phthalates, are added to render the material flexible. As phthalates are rarely used in other plastics, their primary application is in soft PVC. There is an ongoing debate whether or not phthalates have an impact on living organisms.
The second additive is cadmium. I believe that industry has already entered into a large number of effective commitments voluntarily. Cadmium is being phased out. In this respect, the Green Paper is in fact outdated. The case of lead is quite different. Lead stabilisers, in other words organotin and lead compounds, are the most relevant ones and the environmental risks are higher, especially in the case of lead stabilisers. After all, once waste has been incinerated, lead additives from PVC account for approximately 10% of the unwanted high lead content in residues of waste plants, which necessitates a more stringent policy in this respect.
This brings me to production and incineration in general. In terms of production, industry has signed a large number of voluntary commitments in order to introduce very strict restrictions with regard to chlorine which may be released. Furthermore, research has shown that these self-imposed emission values have been achieved comfortably.
Insofar as PVC is not reused, it is generally incinerated in a waste incineration plant. An important aspect in this connection is the high chlorine content. There are two sources of chlorine in waste incineration plants: firstly vegetable, fruit and garden waste, which contains a large amount of chlorine too, and then there is PVC. That means that that waste in those waste incineration plants, and the possible release of dioxins, must be very closely monitored. The elimination of PVC from waste plants is thus important. In fact, incineration and the emissions released in the process are not the only concerns: chlorine also impacts on the recovery of energy in the waste incineration plant. This should therefore be closely monitored.
Mr President, we would like the Commission and industry to join forces and to examine how we, in the framework of self-regulation, can make effective and clear commitments in the very short term. Industry is prepared to do this, and I would also ask the Commission to examine this issue closely.

Myller
Mr President, I would also like to thank the rapporteur from the Committee on the Environment, Public Health and Consumer Policy, Mr Sacconi, for an excellent report.
The health and environmental problems associated with PVC are due to released chlorine, stabilisers and softeners. These products' life cycles are long and they remain in the ecosystem for a long time, which means the extent of the problems for the environment can at present only be guessed at.
The volume of PVC waste continues to grow, however. We need to undertake a study as quickly as possible, and, as Mr Seppänen quite rightly pointed out, one that is not just industry' s own investigation. We need an impartial study to be undertaken on the adverse effects of PVC, in order to be able to prevent a strain on the ecosystems and a deterioration in people' s health.
The problems that exist with disposal have been mentioned here. The size of the problem is seen in the fact that the incineration of PVC can produce even more hazardous waste than that represented by the original quantity of waste, and, because it remains in the ecosystem so long, a landfill site is also a poor option for the disposal of this sort of waste. We therefore need a proper investigation into the matter.
I do not think we can simply put our trust in industry' s own voluntary agreements. As we have already observed, measures must be put in place after studies have been carried out, resulting in a ban on hazardous substances. For this we shall need legislation at European level. As European legislators we must bear in mind the importance of the health of our citizens and the protection of the diversity of nature.

Maaten
Mr President, what are we to do with PVC? Some people are trying to make out that this material is public enemy number one. We find this hard to grasp. The extent to which PVC entails environmental and health risks that do not outweigh the benefits, remains to be seen. This might well be the case. It appears that PVC also has certain advantages as a material. Blood transfusion bags are often cited in this connection.
Politicians need not judge these benefits. What we should do, however, is to ask ourselves how we will deal with PVC if it appears that aspects of its use are unsafe or harmful to the environment. What measures will we be taking? In our opinion, this is where the Green Paper leaves something to be desired, particularly since the alternatives for PVC are kept out of the picture. It is a murky discussion, which is held almost as a religious debate between those for and those against. Like Mr Sacconi, we do not wish to base our choices on myths which are being presented to us by those for and against, and which failed to convince any of us, but rather on proper research and usable comparative materials. As long as we do not have that, we can hardly be expected to move on to the field of legislation.
Meanwhile, we do not wish to place PVC under a ban, but we do want to handle it with care. The precautionary principle requires us to do this. The industry' s initiative to phase out cadmium stabilisers can only be applauded. We believe that similar action should be taken with regard to lead and organotin. In general, we welcome the industry' s voluntary commitments, and believe these should be supported by a legal European framework, thus creating the scope for sanctions whilst adhering to what is possible in terms of content.
The risks at the waste stage are considerable because we cannot dispose of the harmful substances in PVC. One of the few options that are left to us then is reuse, whereby the harmful substances simply remain inside the product. However, the current level of reuse is so modest that it hardly contributes to a solution. In this respect, industry could indeed make an extra effort.
Mr President, I would be exaggerating if I said that we cannot wait for the Commission' s legislative proposals. In this connection, the Green Paper gives in actual fact insufficient cause for this. There is a lot of explaining to be done before that happens.

McKenna
Mr President, PVC is the second most commonly used plastic. It poses significant environment and health problems over its entire life cycle. Those problems always go back to the same two causes: PVC contains chlorine, and requires the addition of a wide variety of hazardous additives in large quantities if it is to be functional.
The scientific studies commissioned by the Commission highlighted a number of key hazards relating to PVC, in particular during disposal. Landfilling is a ticking time-bomb due to the release of hazardous PVC additives and the potential for dioxin formation during landfill fires. Incineration of PVC makes the problem even worse, as apart from the risk of dioxin formation the hazardous residues resulting from PVC incineration may even exceed the quantities of PVC put into incineration. Recycling cannot solve the problem as potential recycling rates under ecological criteria are projected to reach only 5% by 2020. The problem is set to get worse, as waste quantities will increase significantly over the next decades.
At a public hearing organised by the European Commission last October there was a very strong and clear call for substitution of PVC. This call did not just come from environmentalists. It included a coalition of industry, waste-management, local and national authorities, environmental, health and consumer interests. There was very clear and strong support for the substitution of PVC. There is an obligation on the Commission and the EU to respect the wishes of the vast majority of the public. It seems to me that there is a huge amount of support for substitution, while only the PVC industry is reluctant. Whose interests come first? It has to be the interests of all those people that attended the Commission hearing.
The report on substitution calls for the introduction of substitution policies for certain product categories. We think this is a very good starting point, but it should not end there. We would like to see it extended to all categories, not just to some.

Sjöstedt
Mr President, PVC has unique qualities as a plastic, of course. It is strong and hard-wearing, which makes it suitable for use in a number of areas. However, PVC also has other qualities, being the source of unusually hazardous waste. Chlorine is one of its main components. Lead and cadmium are used as stabilisers, and phthalates are added to make the material more supple. This creates very major environmental problems when it comes to disposing of it.
We find it an encouraging sign that we have been given a Green Paper in this area, but we hope that this will soon be followed up by a more comprehensive legislative initiative. I believe that the Sacconi report can make very valuable contributions to such an initiative on the part of the Commission.
We are convinced that voluntary agreements are not enough and that genuine legislation is required instead. What ought to be done, then? Well, first of all, there must be a reduction in total use, at the same time as substitute materials are promoted. That is the only way of reducing the quantity of waste. Secondly, a system must be introduced whereby manufacturers are made responsible for recycling and bear the costs of this. Hazardous stabilisers in the form of heavy metals such as lead and cadmium must be banned as soon as possible. It is important for this to be combined with an import ban, so that the measure is comprehensive in scope. The issue of voluntary agreements arises in this connection. A voluntary agreement cannot, of course, involve a ban on imports. The fact is that an import ban and legislation in this area would benefit the most modern industries in that they would obtain protection for their more environmentally friendly products. Legislation would be more effective and more environmentally friendly than a voluntary agreement.
We want the use of phthalates to be monitored and preferably reduced. That applies particularly to their use in certain types of medical equipment.
We also want to see more done to promote recycling. That means an efficient labelling system, however, and it has to be realised that much of the recycling done at present is a failure.
Overall, we are very satisfied with Mr Sacconi' s report. We have therefore tabled only a few amendments. We think it only reasonable to specify a year after which cadmium is no longer to be used, just as has been done in the case of lead. As I said before, the reason for this is that if there is no legislation and if the latter is not combined with an import ban, there is a risk of the measure' s not being effective enough. It would therefore be consistent to specify a deadline for cadmium, just as the report does in the case of lead.
I have also joined with the Group of the Greens/European Free Alliance in drafting an amendment dealing with the substitution principle whereby chemicals are to be replaced by less hazardous substances. I believe it is important to incorporate this as one of the basic principles of the whole of the European Union' s policy on chemicals. That is why it is appropriate to mention the substitution principle in this context too.
I should like to thank the rapporteur for a good piece of work and for having cooperated so well with other groups.

Fitzsimons
Mr President, PVCs are plastics with a very wide range of industrial and commercial uses. The main applications are in the building sector (57% of total use), packaging, household appliances and cars. The industry comprises more than 21 000 firms providing 530 000 jobs, with a turnover in excess of EUR 72 billion.
According to the Commission's Green Paper, no full assessment of the risks connected with the use of lead-based products - which include PVC stabilisers - has been completed. For this reason, contamination of the environment is possible during the production phase, and during the waste phase once PVC has been used. Specific preventive and protective measures must therefore be taken so as to reduce workers' exposure to PVC. No data are available on the state of landfill waste containing large amounts of PVC. I am calling on the Commission, under the auspices of the European directive, to carry out a broader study of the possible public health consequences of PVC products consigned to landfill dumps in Europe. The next 20 years will probably see an increase of around 80% in the quantities of PVC waste because of the increase in the average lifespan of certain PVC products such as window frames.
The Commission must centralise the information concerning the effects of PVC in our society so that appropriate measures can be taken at national and European level to reduce any possible public health consequences from its use. The European PVC industry has signed a voluntary commitment concerning the sustainable development of PVC and this programme is to be implemented this year. While I support voluntary commitments in general, if they are not seen to be effective then the European Union governments and institutions will have no option other than to legislate on this matter. The Commission should ensure that no public health side effects arise from the uncontrolled recycling of PVC products. Finally, it is important to support the use of alternatives to PVC products.

Blokland
Mr President, in the Green Paper on PVC, it is unfortunate that the Commission does not go much beyond a description of the situation and the presenting problems, whilst hardly offering any solutions. This is an early indicator of how difficult and confusing the entire discussion surrounding PVC is. We are dealing with different points of view, which range from promoting the PVC industry right through to banning PVC.
PVC is a very important material in our society. It is processed in many products because PVC is cheap, strong and is also durable. When we consider a replacement policy, we must give serious consideration to the ideal characteristics of the product for which there might not be an alternative. In the comparative life cycle analysis, a balance must be sought between environmental protection and the product' s life. In this connection, the differences between hard and soft PVC must also be taken into account.
The production of PVC is justified if strict emission requirements are met. In most cases, the addition of stabilisers, especially heavy metals, does not pose a problem at the user stage, since these additives are safely embedded in the structure of the material. The problems involving PVC start at the waste stage and are mainly due to the emissions of heavy metals and chlorine compounds, as well as large quantities of residues. The resolution hits the nail on the head by calling for reinforcement of European waste strategy.
Unfortunately, since the recycling of PVC has been very slow to take off, incentives are needed. In this connection, we should start with the simplest task, namely to focus on PVC which is easy to collect in large quantities. This is what we call bulk PVC, and includes pipework, tubes, construction profiles, window and door frames, eaves and other waste from the building trade. In order to recycle, however, the problem of heavy metals must be remedied and the emissions kept within bounds.
When phasing out cadmium, we need to give the industry' s voluntary commitment a fair chance. The reduction in lead is laudable too, but for the phasing out process, we need to wait for the results of the study. In my opinion, the phasing out of organotin compounds is too premature at this stage. Organotin compounds are needed for the production of PVC film as long as there is no equivalent alternative available. In addition, I am still not convinced that phasing out is justified, given the possible harm this may cause. The same applies to phthalates in my view.
It would be useful if we could separate plastics, but whether this is possible must be further examined; that is why we ought to wait until after the publication of the study to decide on compulsory labelling.
However, what causes me real concern is Paragraph 31 of the resolution, which more or less concludes that PVC should be dumped. The solution should, however, be found in separate storage, in anticipation of the recycling capacity expanding at some later stage.
I hope that the Commission communication planned for this year will appear soon after the European Parliament has given its opinion.

Müller, Emilia Franziska
Mr President, ladies and gentlemen, there is no doubt that PVC is a material with advantages and disadvantages. It is certainly wrong to confine ourselves solely to the problems of disposing of PVC. Instead, the entire lifecycle of PVC needs to be assessed from various points of view, namely the production of the raw material, its manufacture, use and processing, recycling and finally disposal. PVC is impressive above all because of the diversity of its applications and its long lifespan and thus has a wide variety of uses in particular in the building sector, as well as in many other sectors including medicine.
The Commission Green Paper and Mr Sacconi's report put particular emphasis on additives, especially the cadmium and lead-based stabilisers. Industry already voluntarily refrains from using cadmium in PVC products today. The use of lead is also becoming less common. In certain product groups, for example, window frames, many firms are already using calcium-zinc compounds as a substitute for this stabiliser today.
We should reward this willingness of industry to innovate and protect the environment by continuing to pursue and promote the system of voluntary commitments. Binding legislative measures should only be contemplated if industry falls well short of agreed targets to reduce heavy metals or increase the percentage of PVC which is recycled. A general ban on PVC products would be nothing short of fatal for 530,000 employees in the PVC sector throughout Europe, 170,000 in Germany alone.
That is why it is particularly important for socio-economic factors to be taken into account when alternatives to PVC are developed. Against this background it would be irresponsible to call for a moratorium on PVC. Compulsory marking of PVC products would also lead to considerable distortions of competition. This would neither apply equally to all products nor would it deliver a noticeable environmental benefit. The introduction of a PVC levy, the separation of hard and soft PVC and a ban on PVC in the building sector would be a particular burden on small and medium-sized enterprises throughout Europe. In the European Union alone, 21,000 small and medium-sized companies are affected.
PVC as a material needs to undergo a thorough assessment of its entire life-cycle. The problems and advantages need to be weighed up with a critical eye. As things currently stand, a general ban on PVC is neither possible nor sensible and should not therefore be advocated in this Green Paper.

Lange
Mr President, Commissioner, of course I can agree with you, Mrs Müller, that we need to subject PVC to an integrated and comprehensive life-cycle analysis. This will show that PVC windows and window frames, for example, or PVC water pipes are products which we want to use because of their characteristics. The same is true of blood bags, for example. Although this is a non-durable PVC product, it is the most suitable because of the product's properties. However, contrary to you, I do think that, because of the dangerous characteristics of PVC, we really should ensure that we do all we can to prevent it from being disposed of in an uncontrolled manner. In this respect we need to step up our efforts to introduce recycling - both mechanical recycling and melting for reuse - for all PVC products. It is certainly possible to find a sensible recycling solution. Here we need to show, however, much more determination and exert much more pressure so that true closed cycles develop.
To achieve this, Mrs Müller, we also need labelling, not so that the products are marked 'Danger PVC!' , but so that they can be collected separately and be properly recycled. At the end of the day, alongside attempting to carry out a lifecycle analysis, this is about guaranteeing that people can use PVC. That is why we need differentiated collection and distinctive labelling of PVC.
When making any decisions about the future of PVC we also need to guarantee that employees' representatives are involved. We need to improve this aspect of the Green Paper a little more and ensure that the PVC strategy is also implemented in the applicant countries as soon as possible.
When Mr Sacconi was appointed rapporteur I knew that he would do an excellent job, and I was right.

Breyer
Mr President, ladies and gentlemen, I think that we need to constantly remind ourselves that the problems presented by PVC are unique. There is no other product which is manufactured from chlorine and which produces such large quantities of additives with highly dubious environmental and health-related effects. There are certainly alternatives. What I find completely irresponsible is the panic-mongering about jobs. As a legislator, our job is to ensure that the environment and public health are protected. It really is not up to us to repeat industry's panic-inducing arguments about jobs.
We need to be clear that 96% of jobs in the PVC sector are in conversion. This means that these manufacturers could just as easily use other materials. After all, we know that the leading PVC manufacturers are just as capable of producing the alternatives. That is why I do not think that we should be taken in by these mendacious arguments. We need to remind ourselves of the risks. The five Commission studies have made it clear that the problems are simply huge, in particular with waste incineration, which produces yet more hazardous waste.
Allow me also to comment on the argument that industry should have a system of self-regulation. Industry has had decades to develop a strategy of self-regulation here. In fact it has actually become clear that it only brought in self-regulation when it realised that we, in our capacity as legislator, finally intended to introduce a strategy to replace PVC. In actual fact industry does not propose any alternatives either; for example it does not indicate any solution to the landfill problem and does not call into question incineration, which is so fraught with problems. I find it nothing short of dishonest that it makes the percentage of waste recycled dependent on the amounts collected, but does not wish to take part in collecting the waste itself. Surely this shows that this is complete rubbish, a smokescreen. We should not be taken in by this. Instead our responsibility must surely be to propose an alternative solution and not to genuflect to industry.

Goodwill
Mr President, we are surrounded by chemicals in our everyday lives. Even natural products like the leather of these desks or wood are treated with chemicals; and of course we put chemicals in our bodies, both as food additives and as residues from pesticides; and we use cosmetics, some of us more than others, which come into intimate contact with our bodies.
PVC has received a lot of attention and despite the fact that it has been around for over 40 years with no apparent health risks, the spectre of the risk of PVC has been raised. I wonder if it is maybe being unnecessarily demonised, to provide an enemy that the Greens can use in their campaigns.
Parliament has already discussed the problems of phthalates, the substance used to soften plastics, in the context of children's toys. The problem we faced there was determining how much of the chemical gets into people's bodies. No migration testing is available to test how much of these chemicals enters people's bodies. Of course that will also be relevant in the application of PVC to medical goods. Although I am sure I would not like a blood bag used for a transfusion I am getting, or a piece of pipe that has been put in my body, to contain poisons, similarly, I would not want a product which did not perform as well to be used in that application.
Other PVCs are treated with stabilisers to prevent them being broken down by heat and light. In particular, window frames have been mentioned. Cadmium, which is being phased out, and lead have also been mentioned in this context. Lead is toxic when ingested as a compound, but no one would suggest that it is risky to be in a room which has PVC windows, this is an inert substance. It is when we get to the end of the life of the PVC that we have a problem, as Ms McKenna said. We must certainly try to recycle more PVC. PVC windows have a long life - in fact, none have been recycled yet because they have reached the end of their useful life, but only because buildings have been demolished or because fashion has changed. We are looking at a 60-year life cycle. If we ban the use of lead in new windows, we will not be able to recycle the old windows when they come into the waste stream. Technology is available to ensure that windows made of old lead-containing PVC are overlaid with new PVC so people do not come into contact with it.
Before we ban something we should look at the whole picture. What are the real risks, in particular the risk of absorption when we use these products; and what are the risks of alternative products? My house has wooden windows and we have to paint those every three years, so there are risks even with wood, and of course some companies marketing alternative products will play up the risks. Lastly, we should be very careful how we use the precautionary principle because that can be dangerous: used correctly, it is a good thing but if it is used to justify actions for which there is no scientific basis, in politically motivated campaigns, it is a very dangerous principle.

Bowe
Mr President, I welcome this report as a very important first step in what is going to be a very important debate. The rapporteur has worked very hard to bring us together on this issue and I would commend the work he has done to the House. He really has tried very hard to get us to the situation where this House will give a great deal of support to his ideas tomorrow.
We all know that there is widespread concern about PVC within our society. We have, however, to bear in mind that it is a cheap plastic made from salt and natural gas. Where there have been problems they have been where it has been pressed into service for uses for where it is not best suited, e.g. packaging or children's toys. Where it is best used, where its natural properties are best used and need not be modified, e.g. in construction products and in specialist products like blood bags, it is an extremely useful, very important plastic and very difficult to replace.
We do, however, have a problem in terms of its disposal where harm to the environment can be caused by inappropriate disposal and we need to take sensible action with regard to that. Much of the Sacconi report I entirely endorse. I support the phase out of dangerous and unnecessary additives. I believe the voluntary recycling commitments must be reinforced and turned into legally binding agreements. But I believe that the proper route for disposal is incineration in a high temperature incinerator. Suggestions that it should go into a landfill are a serious mistake and a very bad error and I am very glad that Ms McKenna, speaking on behalf of the Green Group earlier tonight, agreed with me about that.
This is the beginning of a very long debate before we reach the stage of legislation. It must be a wide-ranging and broad-based debate. It must reach conclusions that are satisfactory to the public, because of the concerns they have expressed, but also to the industrial needs of society. I welcome Mr Sacconi's report as the first step in the right direction.

Schnellhardt
Mr President, ladies and gentlemen, I particularly welcome the tabling of a Green Paper on PVC, but I have to say straight away that this Green Paper disappointed me, because it opens the door to panic, not to panic about jobs, but panic about PVC as a material. This has been quite perceptible here today. I should like to say to Mr Sacconi that he has tried to put a few things straight and he has succeeded in doing so in parts, but not everywhere. I think that we have a great deal more to do here. We must, I believe, take note of one thing: if we are discussing how to phase out or replace PVC then we are on the wrong track. PVC is a material which we encounter every day, which we need and can use in many areas of our lives. In my opinion this is also how it will stay in the near future. The fact that this requires us to solve problems is something that is also true in any other sector and with any other material.
The weak points of the Green Paper are that it mentions products, such as cadmium and lead, which industry actually uses only very rarely in the PVC production process even now. I have seen for myself how the measures under the voluntary commitments are being introduced in companies. I, myself, am no friend of self-regulation; I have always campaigned hard against it. After all, we need laws to achieve something. In this case, however, it was not the lobbying trap to which someone at the front referred a few minutes ago: I satisfied myself of its effectiveness. We should appropriate industry's findings and not randomly back or call for substitutes which we ourselves have not yet investigated, and about which we ourselves do not know the full facts.
These are points, therefore, which certainly need to be taken into consideration, and the Green Paper needs to be altered to reflect them. Where legislation is concerned we always say that we need to make progress quickly and that we need to know what's what. The entire body of legislation on the use of PVC - the incineration directive, the landfill directive - provides legislative foundations on which we can build when we want to use and dispose of this particular material.

Müller, Rosemarie
Mr President, ladies and gentlemen, the Green Paper before us has, in my opinion, served its purpose. All of the stakeholders - the Commission, Parliament, the companies and associations - have held in-depth discussions in the last few months about the advantages and disadvantages of PVC as a material. Industry's repeated request to exclude certain options from the process of reflection - such as, for example, substituting PVC with alternatives or finding replacements for the stabilisers cadmium and lead - must be refused. In my opinion, in a Green Paper nothing must be off-limits and no possibilities must be ignored if we wish to have a sound basis for deciding on a comprehensive strategy.
Mr Sacconi's report remedies the deficiencies in the Green Paper in a balanced way. Thus, it is not only the critical waste-related issues which are assessed, but the entire lifecycle of PVC and possible alternatives. I also believe that it is important for the social dimension, the impact on jobs, to be integrated into the reflection process alongside the ecological and economic aspects. Because of its long lifespan PVC certainly presents advantages in some products, but these are reduced by the stabilisers used. Urgent efforts should therefore be made to find substitutes for these two toxic substances. In addition the percentage of material recycled must be increased.
The debate about phthalates, which we have already had in connection with toys, must be urgently concluded with an independent scientific risk assessment. I hope that the last outstanding report will be included in the assessment of soft PVC in the Green Paper. Overall I think that if we make the right decision tomorrow we will have a good basis for a comprehensive PVC strategy.

Liikanen
Mr President, I would like to thank the Committee on the Environment, Public Health and Consumer Policy for its report, and, in particular, the rapporteur, Mr Sacconi, for his excellent and balanced contribution to this issue.
The main purpose of the Green Paper was to initiate a broad public debate at European level that would be all-embracing and multi-sectoral in nature. The aim was to get all interest groups involved in the decision-making process at an early stage, in order to ensure that the preparatory work with regard to the issue was transparent.
I, along with my colleague, Margot Wallström, organised a public hearing in October 2000. It was attended by representatives from all interest groups. The Green Paper had also asked for written opinions on the questions put forward. There was a huge number of responses. We received more than 30 000 e-mails, faxes and letters. Most came from employees in the PVC industry and companies in the sector, but many were also received from NGOs and their supporters. In addition, the Commission received official opinions from the majority of Member States.
The draft opinion presented to the European Parliament covers all the essential matters and will be an important guide when the Commission prepares its communication proposing a Commission strategy on PVC. In its assessment, the Commission will mainly concentrate on the use of certain PVC additives, lead, cadmium and phthalates, as well as the treatment of PVC waste in accordance with the commitment the Commission made in its proposal for a directive on end-of-life vehicles. These are two environmental questions requiring action, and the position on them expressed in the Committee' s report is clear.
The Commission notes the view expressed in the report that the use of PVC should be studied thoroughly by assessing with equal precision the life cycle of products made from PVC and alternative materials. The Commission notes with satisfaction the Committee' s proposal that a combination of both legislative and voluntary remedies should be used in any future strategy. Of interest too is the proposal for drafting legislation on PVC that would only enter into force if the players concerned are unable to meet the set objectives through voluntary agreements. This safety mechanism and other methods are to be examined more closely in a communication on voluntary agreements that the Commission is at present drafting.
I would finally like to emphasise that the Commission works on the basis of sustainable development in all three dimensions of society, the economy, and the environment. The European Parliament is kept very much up to date on developments, and in the months to come the Commission will be issuing a communication based on the Green Paper and the opinions received during the consultation procedure, which will spell out the Community' s strategy on environmental issues connected with PVC. This strategy will serve as a framework for future initiatives on PVC.

Pension schemes and funds
President
The next item is the Oral Question to the Commission pursuant to Rule 42 of the Rules of Procedure (B5-0165/2001) by Mrs Randzio-Plath, on behalf of the Committee on Economic and Monetary Affairs, on Community initiatives on the future of the pension systems, including pension funds in Europe.

Randzio-Plath
Mr President, the Committee on Economic and Monetary Affairs is currently working on one of the important subjects on the European agenda, which was also one of the focal points of the discussions at the Stockholm European Council, namely the issue of demographic change, combined with comprehensive social protection, and other issues related to pension schemes within the European Union.
At the moment, we have on the table the Commission proposal on supplementary occupational retirement provision. This is certainly - in particular from the point of view of European integration - a very important proposal, which should complement the statutory pension scheme and, together with a private pension, form, as it were, a three-pillar basis for secure retirement provision in the European Union.
The second pillar, the supplementary occupational pension, will certainly play an increasingly important role in the Member States of the European Union. One reason for this is, of course, that, owing to demographic change, State security systems are experiencing financing problems, but it is primarily because we wish to have pensions which will provide for a secure future.
In this context it should be noted that the Commission has not yet submitted a proposal for a directive to Parliament which covers the whole package necessary for an occupational pension, as it promised it would last year, but only one part of it. The European Commission's proposal for a directive contains no reference to tax arrangements. For us it is very important to know to what extent the existing regulations are to be supplemented by proposals to harmonise taxes or proposals for new taxation arrangements. Commissioner, you have announced that a communication will soon be published. In order to actually give our opinion on the overall package, it is very important for us to know to what extent the principle of the free movement of workers might not be undermined by diverging national taxation, by different taxation of contributions, including to occupational pension schemes, and by different taxation of pensions themselves, because we do have downstream taxation in many Member States. All of these questions remain open and are closely bound up with the success of the proposal for a directive which you have tabled.
I have one further comment: it is unacceptable for workers to be discriminated against solely on the basis of the place where they then draw this pension. Neither tax avoidance, nor unfair tax competition, nor insufficient exchange of information on tax are responsible for this problem. What we actually need here is coordination of tax policies, the initial moves towards which looked so promising with the Monti package. It is also in the interests of workers who wish to engage in cross-border activities - and the Treaty provides for this - that we need to make this possible. That is why for us in the European Parliament it is terribly important that we also receive answers from you, before we complete our discussions, on how tax coordination is to be guaranteed in this sector.

Bolkestein
Mr President, Mrs Randzio-Plath has, on behalf of the Committee on Economic and Monetary Affairs, raised questions on a particularly important issue, namely the Community initiatives on the future of pension systems.
I agree with Mrs Randzio-Plath on her first question. The proposal for a pension fund directive is a first important step in the direction of cross-border membership of pension funds. It must be supplemented by further initiatives. As the explanatory memorandum to the proposed directive sets out, for cross-border membership it should be possible for companies and employees to obtain tax relief on contributions paid to funds in other Member States. This aspect will be the subject of a separate initiative by the Commission.
The second question is what the Commission will do to make cross-border membership of pension funds a reality. First of all, it is a priority for the pension fund directive to be adopted by Council and Parliament. However as a corollary to the pension fund directive, the Commission will adopt a communication on the elimination of tax obstacles to the cross-border provision of occupational pensions. The adoption of the communication is now scheduled for two weeks' time. It is necessary to secure the elimination of discriminatory treatment against pension institutions established in other Member States.
Many Member States give better treatment, in terms of tax deduction for contributions and taxation of benefits, to schemes operated by institutions established within their own territory. That poses a major obstacle to the cross-border movement of workers, and European businesses as well. It effectively closes off the pension markets of many Member States. Furthermore, Mrs Randzio-Plath asks whether the Commission thinks that it should be tabling legally binding initiatives and, if not, how the Commission could still ensure that cross-border membership would become a reality. As I said, the Commission is in the process of adopting a communication. This communication will make clear that the most urgent obstacles to labour mobility and cross-border pension provisions can be overcome without secondary legislation, by enforcing the Treaty rules which are already in place. I hope that you will appreciate that until the communication has been adopted by the Commission I hesitate to go into detail of its content. I shall be very happy to discuss those with you and how the communication should and could be implemented after its adoption by the Commission. I can, however, assure you that I see the elimination of tax obstacles to labour mobility and cross-border pension provisions as an absolute priority.

Karas
Mr President, Commissioner, ladies and gentlemen, I am very pleased that we are having this debate today, because there is of course a need to clarify a number of points in connection with the report on occupational retirement provision, the second pillar. Some say that this is a directive which, in the first instance, needs to be seen as part of the financial services sector. Others think that we ought to use the directive straight away to cover conclusively the whole second-pillar package, from taxation issues to social security, therefore including biometric risks. You have now explained that this is just one step in the process and that others will have to follow so that the directive - and here we are of the same mind - does not perpetuate existing distortions of competition. The tax issue is fundamental here, but the social aspects, the issue of supervisory regimes, the issues of labour law and social law - which after all are not the same thing - of course also have their part to play.
Commissioner, I must also repeat that for us, and for me as rapporteur, this directive represents a step forward, a considerable one, which sets the ball rolling. Further Commission initiatives will have to follow, which we will address in our report very clearly and in ever greater detail, because we will not have transferable pensions and mobility within the EU until the Member States agree on common taxation principles. We know that setting the tax rate is part of income tax and thus falls within the purview of the Member States. Nevertheless, in my view, a general shift to downstream taxation is necessary to avoid contributions and benefits being taxed twice or not at all.
A second point is very important to us, putting an end to the discriminatory tax treatment of service providers established in another Member State and pension contributions made by EU citizens resident in another Member State. This system is practised in many Member States and is tantamount to cordoning off the pension market. Although our views may coincide here, in many respects we are sceptical about whether this really will be achieved. On the one hand you are now announcing a communication rather than a directive - you will have your reasons for this. A second point, however, makes me even more sceptical: at the last plenary sitting of the European Parliament, the President of the Commission, Mr Prodi, announced the demands that he was going to make at the summit in Stockholm with respect to occupational retirement provision and the tax issue. There is a difference between the demands which were expressed here in the last Strasbourg week and the final document from Stockholm. In the final Stockholm document, the pensions issue is, in fact, reduced to the labour market of the over 55s and is no longer worded, as announced here, as a call to reform the pensions system and remove all tax obstacles.
That is why we would ask you to ensure that the initiatives, which you have again mentioned today as being necessary to follow up on the directive, quickly become part of actual Commission proposals, so that we do not encounter possible difficulties with the application of this directive on occupational retirement provision on account of the many unresolved issues.

Kuckelkorn
Mr President, Commissioner, ladies and gentlemen, in making this proposal for a directive the Commission is pursuing one main objective. This objective is to use pension funds to strengthen Europe's financial markets. If it wanted to do this it would not need a directive at all, because all of the pension funds and financial markets are covered by the OGAF directive. That is why it explicitly mentions occupational retirement provision, meaning the second pillar of the overall retirement provision strategy. However, if we do mean occupational pensions then the financial markets have to be subordinate to the occupational pension schemes and not vice versa. In this case we believe that we need to talk about a proper directive on occupational retirement provision and not only about a step or series of steps which may in 20 or 25 years' time perhaps lead to this.
I now turn to the issue of taxation. I have no sympathy for you, Commissioner, when you say that you cannot say anything about the content of the actual communication because it has not yet been adopted. You, yourself, announced several times that it would be ready in March, then the beginning of April and then there was talk of Easter. So when is it going to arrive? How can we be expected to work on the proposal for a directive and Mr Karas's report in the Committee if the tax issue is not included? Unless the tax issue is addressed we will not, in my opinion, be able to put Mr Karas's report to the vote. You are therefore required to table something. You say that you have hopes of enforcing the Treaty rules which are already in place with the help of the European Parliament; my only objection is that you have already had the chance to do so many times in the past. You did not need to wait, and you can always be sure of Parliament's support for uniform taxation rules. For once the Commission also needs to start to show courage, courage against the Council of Ministers.

Huhne
Mr President, my group's attitude towards the Commission's attempts in this area is rather different from that of the previous speaker. Indeed, if we were to criticise the Commission, we would criticise it rather from the other side; we would hope that the Commission would take a rather more robustly liberal attitude, for example in the proposals which it has made for a directive on occupational pension funds, to remove the possibility of certain Member States deciding to continue to implement quantitative restrictions for which there is absolutely no evidence whatsoever of any superior performance. The Commission should generally adopt the guiding principle that it should at least be capable of putting forward some evidence in favour of its proposals, rather than merely going for something which appears to be no better than the average practice in those Member States where the prudent person principle is adopted.
We also take a different view in urging the Commission and our colleagues in Parliament to try to make progress in taxation coordination. While that is a very desirable aim, we should not allow the best to become the enemy of the good. If we can make progress in improving the returns for pensioners in private schemes across the European Union, we should do so. There is, as I have already said, absolutely no evidence that there is any reduction in safety or security as a result, and to establish an entirely spurious linkage, whereby we wait until we have a perfect scheme for taxation before we attempt to make some progress in the area of opening up and liberalising asset management seems to me to be very unfortunate.
We also welcome the Commission's new stress on coordination rather than on legislation. We know that it is perfectly possible for the Commission to make many proposals, as it has done in the past, without making very much progress. This is a new approach and I hope that it will be more successful than the approach of some of the Commissioner's predecessors in this area.

Bolkestein
Mr President, may I begin by extending a heartfelt thanks to all speakers and to Mrs Randzio-Plath and the Committee on Economic and Monetary Affairs for the fact that this debate is taking place this evening. It certainly indicates the importance which Parliament attaches to the matter of pension funds and also to the issue of problems in the area of taxation.
May I further note that we have almost unanimous agreement - I say "almost unanimous agreement" - on the fact that it is of utmost importance to deal with the tax problems in the area of cross-border pension provision. A fully functioning single market in this area is crucial for the free movement of workers, and it will increase the Union's competitiveness. For this we need of course swift adoption of the proposed pension fund directive, but that will not be enough. We should also be dealing with the tax problems, as I said just now. That is an absolute priority for the Commission and it is precisely why I have proposed to the Commission the adoption of a pension communication.
Today has not been the best time to engage in detailed discussions for the reasons which have been mentioned. The pension communication has not yet been adopted by the Commission. Mr Kuckelkorn criticised the Commission for being so tardy; he mentioned the delays. May I say that the Commission is running into important manpower problems. The financial services action plan is a considerable task consisting of 42 measures. The Lamfalussy report deals with ways in which that can be speeded up, but we are now running into manpower problems. It is not the first time that I say this here tonight, but it is one of the reasons why we have not been as quick as we had wanted to.
Tonight is perhaps too early for a detailed discussion of that communication. I am looking forward to presenting it to you and hearing your detailed comments once that communication has been adopted.
Mr Karas said that the directive or the communication could have included more aspects. He mentioned social aspects and so on. As Mr Huhne said - I know the saying better in French than in English - le mieux est l'ennemi du bien. He gave the English translation of that saying. Let me say to Mr Karas: if we had to deal with all those aspects then Mr Kuckelkorn would be even angrier with the Commission because the delay would have been that much longer. Mr Karas says that this is ein Schritt, it is just one step in the right direction and of course he is right, as I said in my opening remarks. It is one step in what the Commission thinks is the right direction; other steps will follow and must follow in view of the demographic time bomb which is due to go off in ten years or so.
That is why it is a good thing that the Stockholm European Council conclusions made mention of the fact that Member States now have the right to look into each others' affairs as far as pension funds are concerned because, thanks to the mechanisms of economic and monetary union, what happens with pension obligations is of importance to Member States, since all must avoid having deficits which are larger than 3%, or deficits which do not obey the Dublin rules that they should tend towards zero or even be in surplus. That is a very good part of the European Council conclusions to which I should like to draw the attention of this Parliament.
Mr Kuckelkorn said, "Would you please stand up to the Council of Ministers?" The Commission does little else but stand up to the Council of Ministers but only, of course where this is necessary. We do not stand up to anyone for the sake of it but only when we think that the Commission is right and the Council of Ministers, or the majority thereof, is wrong. Certainly the Commission would not be hesitant in such cases. Mrs Randzio-Plath drew attention to the matter of whether there should be a directive or communication, as did other Members of Parliament. Tabling a directive on the matter of taxation would not solve anything since Member States would not be able to agree to it unanimously. We are here in the area - I am talking about the fiscal aspects of pension funds - we are here in the area of unanimity. Does this Parliament really think, does Mrs Randzio-Plath really think, that we can get unanimity in the Council on important fiscal aspects of pension funds?
The chances of getting a unanimous vote in Council on an ambitious directive on the fiscal aspects are similar to the prospects of a snowball in hell. The Council may give unanimous approval to a much smaller and insignificant directive but that is not what Parliament or the Commission wants. The Commission is ambitious, wants to have a proposal with meat in it and that means that it is driven to issuing a communication and not a directive. The area of unanimity is such that we must find appropriate instruments for a proposal that contains any meat at all. If we merely wanted a qualified majority vote in Council then a directive would have very limited scope and would only cover posted workers.
Lastly, I have not yet addressed Mr Huhne. May I express the gratitude of the Commission for his support. He would have liked the Commission to be somewhat more robust. The Commission seeks a maximum of robustness but it must take into account what opinions are prevalent in the Council. The directive that the Commission has put forward deals with the security for the contributors, prudential requirements, as Mr Huhne knows; it deals with the freedom of pension funds to invest where they would like and in which currency; it deals with the European passport for the pension fund industry. These are significant issues and as Mr Huhne knows full well, the sums involved are considerable. In conclusion, the Commission now finds itself caught in a crossfire between Mr Kuckelkorn and Mr Huhne and therefore perhaps the golden mean is the right place for the Commission to be.

Randzio-Plath
Commissioner, I should like to ask one more question because we have had repeated problems with the timing of events: when exactly will the communication reach us? The second point which is unclear is: how is a communication supposed to help to actually determine the basic taxation rules for the whole directive if you are not able to tell us the principles according to which a minimum of harmonisation, while avoiding tax discrimination or non-collection, will have to be regulated? Even if you leave this to the Member States a contradiction still remains, namely: how can further progress be made and what then is the significance of the directive?

President
I do not think it would be useful to reopen the discussion at this time of night. I would ask the Commissioner if he would like to respond to the first part, but not the second part. We have already had a discussion. This will be coming back to Parliament at a later date.

Bolkestein
Mr President, if you allow me then to reply to the first part of the question, the answer is 'within a few weeks' .

President
The debate is closed.
(The sitting was closed at 8.38 p.m.)

