EU rules are needed to oblige textile and clothing suppliers to respect workers’ rights, say MEPs in a resolution adopted on Thursday.

Textile workers around the world, many of whom are young women and children, suffer long working hours, low wages, uncertainty, violence and hazardous conditions. These practices also harm the EU industry, as they result in social dumping, MEPs note in a non-binding resolution.

In an effort to push the “flagship initiative” aimed at preventing tragedies like the April 2013 Rana Plaza factory collapse in Bangladesh, MEPs suggest a series of measures:

• due diligence obligations: the EU Commission should table a binding legislative proposal for a due diligence system, based on OECD guidelines and similar to those for the so-called blood minerals, that covers the whole supply chain,

• conditional trade preferences: the EU should ensure that textile exporting countries with preferential access to the EU market comply with obligations and produce sustainable textiles, while member states should promote workers’ rights in their relations with partner countries,

Quote by lead MEP

“We cannot turn a blind eye, if our clothes are made at the cost of vast human suffering. Only binding rules could guarantee that products sold on European markets do not violate the dignity and the rights of millions of workers. The EU has the means to act and we ask the Commission to do so.” said rapporteur Lola Sánchez Caldentey (GUE/NGL, ES). 

The resolution was adopted by 505 votes against 49 with 57 abstentions.

Background

According to the World Trade Organisation, more than 70% of EU textiles and clothing imports come from Asia, with China, Bangladesh, India, Vietnam, Cambodia and Indonesia as the largest producers. Most buyers are global brands looking for low prices and tight production timeframes and the consequences usually fall upon factory workers. After the Rana Plaza tragedy, in which over 1,100 people died when a factory building collapsed in Dhaka, Bangladesh, the EU Commission promised to bring forward an EU wide flagship initiative, but has so far failed to do so. Parliament wants to encourage the Commission to table this package of proposals.

Procedure:  non-legislative resolution

The Commission managed the 2015 EU budget funds according to the rules, so MEPs granted it a “discharge” approval for that year, in a resolution voted on Thursday.

Parliament’s management of its own budget in 2015 was approved as well. By contrast, Parliament postponed approving spending by the Council of Ministers and the European Council. 

Error rate down…

The payments error rate fell from 4.4% in 2014 to 3.8% in 2015, which remains above the 2% threshold beneath which the European Court of Auditors could classify payments as “error-free”, MEPs note.

…but a new payment crisis looms

Parliament deplores substantial backlogs in the use of 2007-2013 European structural and investment (ESI) funds. By the end of 2015, payment of 10% of the €446.2 billion allocated was still outstanding, MEPs note. They stress that “this situation may indeed pose a significant challenge and undermine the effectiveness of ESI Funds” in a number of member states.

The ongoing payments backlog, as well as global economic recession, could mean that “delays in budget execution for the 2014-2020 programming period will be greater than those experienced for the 2007-2013”, MEPs regret.

Climate spending shortfall and budget fragmentation

MEPs deplore the fact that climate-related spending accounted for only 17.3% in 2015, even though the objective was to reach at least, 20% over the financial period – a target which may not be met any more without more effort to tackle climate change.

Parliament also criticizes the fragmentation of the EU budget, which is implemented through “different tools and combinations between them as for example programmes, structural and investment funds, trust funds, strategic investment fund, guarantee funds, facilities, financial instruments, macro-financial assistance instruments”. These “various shadow budgets” undermine the credibility of the EU budget, warn MEPs, who demand that funding arrangements be made “clearer, simpler, more coherent.”

Council discharge postponed

For the seventh consecutive year, the Budgetary Control Committee had recommended that Parliament postpone granting discharge to the Council of Ministers and the European Council (heads of state or government) due to their failure to cooperate with Parliament by supplying the figures it needs to assess spending.

Background

The EU Commission is legally responsible for the biggest chunk of the funds, amounting to €145.2 billion in 2015, but around 80% of all EU funding is in fact managed locally, by EU member states.

The EU budget is always balanced, which means no single euro is spent on debt.

The decision on whether to grant discharge for the execution of the EU budget is made by the European Parliament, acting on a non-binding recommendation by the Council, the other arm of the EU budgetary authority. Another key institution is the European Court of Auditors, the EU’s independent external auditor, whose reports are a fundamental part of the procedure. The discharge procedure has proved to be a powerful tool, which has had an impact on the evolution of the EU’s budgetary system, while helping to increase Parliament’s political leverage.

Nous tenons à féliciter chaleureusement le Premier ministre du Royaume du Maroc M. Saad Eddine El Othmani suite à la formation du nouveau gouvernement qui a obtenu la confiance de la Chambre des Représentants en faveur de son programme.

Le Maroc constitue depuis longtemps un partenaire stratégique dans notre voisinage, avec lequel nous avons développé une relation de confiance de longue date.

La coopération entre le Maroc et l’UE est solide et touche de nombreux domaines stratégiques, ce qui rend notre relation mutuellement bénéfique.

L’Union européenne réitère son soutien pour la poursuite et l’approfondissement du mouvement de réforme dans lequel le Maroc s’est engagé, dans le sillage des réformes constitutionnelles de 2011 entreprises sous l’autorité du roi Mohammed VI.

La formation du gouvernement a lieu à un moment clé de notre relation, et nous saisissons cette occasion pour confirmer la détermination de l’Union européenne à travailler de concert avec le nouveau gouvernement marocain sur le renforcement de l’excellent partenariat entre l’Union européenne et le Maroc afin de faire face aux défis communs.

Check against delivery!

Good morning, today we will have a quite intense meeting with the Defence Ministers also welcoming the NATO [North Atlantic Treaty Organisation] Secretary General [Jens Stoltenberg] and the Head of the UN [United Nations] Peacekeeping Operations [Jean-Pierre Lacroix] – strong partners with whom we work very intensively.

We will have a session on Libya and our work in and around Libya at sea. Yesterday, we were visiting the flagship of Operation Sophia to fight the smugglers’ networks but also to train the Libyan coastguards. Inside Libya, we have work ongoing to strengthen the capacity of the authorities of Libya, especially on the control of the territory and the reforms they have to make. Also the work we are doing south of Libya with our partners in the Sahel because we know very well that be it on migration, be it on security, counterterrorism or the smuggling of arms, there is work to be done at the southern border with the desert. And this is the work we are doing especially with Niger, with Chad, with Mali.

So, we will discuss with the Ministers this approach in different manners and then we will move to another very important point which is the continuation of the work we are doing to strengthen European defence and security. As you know, this is a work we have launched last year already with the Global Strategy [the EU Global Strategy for Foreign and Security Policy] and then, in the last eight, nine months, we have moved quite fast and quite far on strengthening the European defence.

Today we will discuss with Ministers in an informal manner, so do not expect decisions to be taken, it is not the setting for that, but we will discuss how to move forward on Permanent Structured Cooperation (PESCO), on the use of Battlegroups, on the fund that the [European] Commission is preparing to support the European defence, both on capabilities and on research and industry. So it will be, I believe, not only stocktaking but also a strong push to develop this European defence chapter about cooperation and integration that was indicated also in Rome when we celebrated the 60thanniversary of the Treaties as one of the main fields where the European Union will move on in the next years.

Q. You said yesterday that the EU was ready to provide ships to the Libyan coastguards. When could this start and what form could it take? Which countries will contribute?

Too early to say that. We are assessing the needs. We have for the moment, as I said yesterday, trained around 100 Libyan coast guards and navy. We are now assessing together with the Libyan authorities the needs and this is a process that will take place in the next months. And I know that some countries bilaterally – for example Italy – are just now starting to provide or considering to provide some vessels for patrolling the Libyan territorial waters. But this will be a European common effort.

Q. How much progress can you make on EU defence when France is still choosing a President?

Well, that is a process that will be concluded in a couple of weeks from now. So I do not see any problem with the political calendar on that. We have moved very consistently and very fast and united on this file. I would just mention the fact that in March we took important decisions on military capabilities to be together conducted and run in Brussels – and people were sceptical about the possibility of us moving still at 28, and still we have done it. 

So, I am very confident that the chapter of the European defence will continue to move forward, in a very concrete, constructive and united manner – no matter about the political calendar that obviously is important in France as in all other EU Member States. I see this as a clear priority for all. And by the way, if you ask not only the governments but if you ask the European citizens, the European citizens clearly indicate the field of foreign policy, security and defence as the field where the European Union added value is absolutely not in discussion. They want to see more European Union in the field of foreign policy, security and defence – and this is what we are doing.

Q. Is it possible to equip the Libyan coast guards with weapons?

We are talking about non-military equipment.

Q. Is there still a possibility that Operation Sophia goes into the territorial waters of Libya?

This would require an invitation from the Libyan authorities and a UN Security Council resolution. What we have achieved in international waters would now be useful to achieve in Libyan territorial waters, both in terms of dismantling the traffickers’ network but also in terms of saving lives. You know that most of the tragedies now take place close to the Libyan coast. What we are currently doing is trying to empower the Libyans to do this work in Libyan territorial waters. This would allow us to solve the problem of smugglers and save lives without necessarily entering ourselves in the Libyan waters. Our objective is not in itself being in the territorial waters of Libya, our objective is that in the territorial waters of Libya the work is done. If it is done by the Libyans, it is even better.

Q. But is this partner reliable enough?

It is the partner with whom we are working. It is the Government of National Accord that is internationally recognised and we are trying to do all we can to strengthen their capacity. We are also working with municipalities and with others in the country. For us what is important is this: that there is the legitimacy from the international perspective and, on the other side, that there is the political work in Libya. This is maybe less for the Defence Ministers to discuss but it is very much for us to do. I will debrief the Ministers also of the fact that we are intensifying our work, especially with the Arab League and the African Union and the UN to push for a political inclusive process in Libya that allows, that would allow the east and the west and the south to come together and Libyans themselves to find a way to avoid fighting each other and uniting together to fight terrorism. This is the effort that on the political side we are committed to do and we will continue to discuss this.

EESC supports Commission’s cash control plans but points to the obstacles to their implementation

The European Economic and Social Committee (EESC) backs the European Commission’s new proposal on expanding cash controls at the EU borders and giving the authorities more power to conduct checks and confiscate goods in the event of suspected illicit activities, in order to gather more information and discover more cases of terrorist financing.

But the EESC has again called upon the Commission to publish a new list of tax havens responsible for the majority of illicit money flows, seeing it as a huge obstacle to the effective application of the proposal.

“Cash consignments continue to be the main channel through which money launderers and other financial criminals operate,” stated Javier Doz Orrit, rapporteur on the opinion Terrorism Financing – Controls of Cash Movements, adopted at the EESC plenary session on April 27.

Estimates put money ‘laundered’ for terrorism purposes at between hundreds of billions and a trillion US dollars per year, according to a report by the intergovernmental body Financial Action Task Force (FATF).

The obligation requiring all travellers entering or leaving the EU with EUR 10,000 or more to declare the amount at the border was introduced by the first Cash Control Regulation (CCN) in 2005. The new proposal extends the obligation to declare to all cash sent by post, courier or freight transport.

It also empowers the competent authorities to temporarily detain amounts below that threshold if an illegal activity is suspected. The number of cash consignments entering and leaving the EU remains high, but cash controls are still limited, amounting to some 100,000 per year in all the Members States put together, an analysis has shown. Furthermore, the controls and the number of suspicious cases investigated vary from country to country.

The EESC recommends that, following extensive consultations and a comprehensive study, the Commission should put together a plan for reducing the use of cash in the EU.

“As part of this study, the question of whether the compulsory declarations threshold of EUR 10,000 is appropriate should be considered”, co-rapporteur Mr Mihai Ivaşcu said. Starting from 2018, EUR 500 banknotes will be removed from circulation as it is widely documented that they are used to make cash payments in illicit trafficking. The Committee welcomes this development and its beneficial implication for fighting against terrorism financing.

Furthermore, the new regulation promotes the introduction of penalties in all the Member States for failing to comply with the obligation to declare. The EESC believes those penalties should be harmonised and a common communication procedure should be set up for all Member States.

The Committee underlines the importance of improving the exchange of information and coordination between the authorities of the Member States and with the third countries, to achieve the maximum effect in applying the new regulation. In this sense, the EESC urges all Member States to make their anti-terrorist databases available to Europol.

The new proposal also broadens the definition of cash to include prepaid cards and highly liquid commodities like gold. Although the EESC acknowledges the social value of prepaid cards, which allow people of different social status to make payments online and offline, it points to the threat of their use by criminals or terrorists, as was the case in the November 2015 attacks in Paris.

The Committee also recommends that in addition to gold, other commodities of high value should be listed as cash, such as precious metals and gemstones.

However, the EESC points out that the successful implementation of any legislation against money laundering and terrorist financing is seriously hampered by the fact that the tax havens do not appear on the list of “high-risk third countries with strategic deficiencies”, published by the Commission in the Annex to its Regulation (EU) 2016/1675.

“The lack of any real political will to eradicate tax havens is a serious obstacle to the effective application of the regulation,” Mr Doz Orrit stated.

He said the EESC felt obliged to reiterate the call made in one of its previous opinions: “The Commission should propose a new list of tax havens, merging it into a single list of third countries and territories not cooperating in the prosecution of financial crimes and terrorist financing”.