The interface between the Business World and the EU Institutions Jean Claude LAHAUT

1. The interface between the Business World and the EU Institutions Jean Claude LAHAUT 3 February 2011

2. Overview • Challenges ahead: image and competitiveness • The European chemical industry and Cefic • The EU Institutions and the legislative process • Advocacy and communication

3. “Worst” EU lobbying awards 2010 • Goldman Sachs and derivatives lobby group ISDA: for aggressive lobbying to defend their financial weapons of mass destruction • Hedge fund and private equity lobby groups AIMA and EVCA: for deceptive lobbying to block regulation of damaging speculation in the financial sector • Royal Bank of Scotland: for secretly lobbying in Brussels and for exploiting contacts by headhunting former EU Commissioner Verheugen as advisor • ArcelorMittal: for lobbying on CO2 cuts under the Emissions Trading Scheme • BusinessEurope: for aggressive lobbying to block effective climate action in the EU while claiming to support action to protect the climate

4. Image of Industry % (more) positive Source : Cefic PES 2010

5. The Chemical Industry… % respondants Source : Cefic PES 2010

6. Number of “pieces of legislation”* on environment and safety issued by the European Union (1990 – 2009) % Hazardous Substances (49,8) Safety (17,0) Waste (14,4) Air Pollution (13,7) Water Pollution (5,1) 23 * Directives, Decisions and Regulations Source: Federchimica

7. Examples of legislations affecting the chemical sector • REACH Regulation • Energy policy / ETS • RoHS Directive • Environmental Liability Directive • IPPC: North/South differences • Biocides • Soil legislation • Our call for better (coherent) regulation

8. This is Cefic • Representing 29.000 chemical companies in Europe • 28 National Chemical Federations across Europe • Over 600 direct Company Members from Europe • More than 30 Associate Company Members from around the world • 21 European Affiliated Associations • Operates 104 Sector Groups focusing on 120+ product families and over 60 Strategy implementation and Issue Teams dealing with the industry’s horizontal issues (REACH, International Trade, Energy, Research & Innovation, …) • About 4500 industry experts from companies and federations participate in the CEFIC groups. • Close cooperation with the other regions in the world through ICCA • 9

9. Key Figures • Contributes to 24% of the World’s chemical sales, • Represents 29,000 companies (96% SMEs), • Employs 1.2 million people, • Generates € 449 billion of revenues, • Creates a trade surplus of € 42.6 billion. Source: Cefic Chemdata International

10. Geographic Breakdown of World Chemical Sales EU Chemical industry losing share in fast growing global market

11. Cefic PRIORITIES Importance Sustainable Development: Competitiveness Chemicals Safety REACH Implementation Innovation ETS IED Strategic Urgency Operational October 2010

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

14. 9 billion people will live on earth by 2050! • How can we guarantee food and water supply for everyone? • What are possible bene-fits and contributions of plant science? • 67% of the world population will live in cities by 2025! • What does future architecture look like? • Which materials are needed to make energy consumption more efficient? Health & Nutrition Construction & Housing • 1.2 billion cars will drive on earth by 2020! • How can we reduce emissions and fuel consumption ? • What will future cars be made off ? Mobility & Communication • 50% more primary energy needed in 2030! • What is the ideal energy mix of the future? • How big is the stake of renewable energy? Energy &Resources Sustainability as a strategic choice for global challenges

15. Current and Future Greenhouse Gas Emisions in the World Russia 1,5002000214 Japan 1,2001,200204 Europe 4,000 4,5001,600 China 5,10011,4002800 NorthAmerica 6,7008,300890 India 1,1003,3003,300 Austrial New Zeeland Corea 9001,100151 Africa 8001,4003,980 LatinAmerica 9001,6001,568 2005: CO2 emissions(million tonnes) 2030: projected CO2 emissionswithoutclimatepolicies(million tonnes) 2050: greenhousegasemissionsallowedunder 2 tonnes/capita scenario (million tonnes) Source : Go for Growth, BusinessEurope, 2010

16. Europe’s Innovation Challenge R&D Expenditure (% GDP) % world patents with tertiary education Source : Go for Growth, BusinessEurope, 2010

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20. World Business Council for Sustainable Development: Vision 2050 • Business-as-usual outlook to 2050 • « The story is one of growth in populations and consumption compounded by inertia stemming from inadequate governance and policy responses. • The result is degradation of the environment and social stress. » • Vision: • « In 2050, some 9 billion people live well, and within the limits of the planet »

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22. Audiences Advocacy Decision makers 3 EU Institutions 27 Member States Industry Stakeholders Media Interested audiences Communication « Society » Public opinion Advertising

23. Cefic environment EU society (500 M, >27 MS) Trade unions Business & Industry Value Chain NGOs & consu-mers’ EU & National Institutions Political parties AcademiaScientific World and other stakeholders

24. Main EU institutions • Advisory BodiesJudiciary authority European Commission = EU general interest The Council = Member States European Parliament = EU citizens Economic and Social Committee Committee of the Regions The European Court of Justice

25. EU decision-making process Formal Proposal Inter-service Consultation Green Paper White Paper Commission European Parliament Council Committee of the Regions Economic and Social Committee for opinion

26. A complex decision-making Commission Council (Member States) European parliament (parties, rapporteurs) Comitology (Commission + Council + Parliament)

27. Commission President José Manuel Barroso 7 Vice-Presidents Catherine Ashton High Representative of the Union for Foreign Affairs and Security Policy Viviane RedingJustice, Fundamental Rights and Citizenship JoaquínAlmuniaCompetition SiimKallasTransport NeelieKroesDigital Agenda Antonio TajaniIndustry and Entrepreneurship MarošŠefčovičInter-Institutional Relations and Administration 19 Commissioners 7 services Communication European Anti-Fraud Office Eurostat Historical Archives Joint Research Center Publication Office Legal Service 27 Cabinets 36 Directorates General Secretariat General

28. Council of Ministers – number of votes per country “Qualified majority” needed for many decisions: 255 votes and a majority of member states

29. The European Parliament 736 MEPs Administration 1 Secretariat-general 10 directorates-general Bureau 1president : Jerzy Buzek 14 vice-presidents 5 quaestors 7 political groups + 27 non-attachedmembers 35 InterparliamentaryDelegations 20 Committees

30. A Regulation for the « Guinness Book » • 150 pages of legislative text • 1.000 pages in annexes (+ thousands of pages of TGD) • eight weeks of Internet consultation (32 non EU states responded) • about 50 Business Impact Studies • 2 Council Formations (Competitiveness and Environment) • 10 EP Committees (Hughes Procedure with three committees) • about 50 rapporteurs and shadow rapporteurs • almost 5.000 amendments • huge media interest and strong pressure from NGOs

31. Opportunities for Chemical Industry • Unique opportunity to get a more coherent, reliable and lasting framework at EU level • Strong visibility in media and public discussion to address benefits of chemistry • Restore trust in chemical industry • Foster role of trade associations • Align membership on one-voice policy • Enhance credibility vis-à-vis legislators • Prepared to pro-actively address future issues

32. General political context • Public concern about environment-health related aspects on the rise • Focus of green and environmental NGOs shifting from production to products • Broad and increasing media interest for HSE issues (specifically in some countries like UK and F…) • National and EU legislators under pressure to address these concerns (precautionary principle)

33. For the chemical industry • In all current and future political/legislative initiatives chemical substances are targeted • Chemical substances are under attack through their use downstream (substances in articles) • From single substances to more complex preparations (« toxic cocktail ») • Long term effects in low doses on vulnerable populations

34. Advocacy lessons • Listen to concerns of actors involved and take them serious • Early co-operation between issue owner and advocacy and communication is key • Technical knowledge and « sound science » are not winning arguments per se • Emotional and political aspects often more important (EP) • Clearly define who does what and at what level • Involve the parts of the network needed, including the relevant sector groups and affiliated org. • Stay focused on priorities and key messages • Build strong alliances with other sectors and DU • Build media campaign as early as possible to prepare the ground for advocacy • Speak with one voice

35. Long term approach Anticipation Reputation Early warning Processing Decision Advocacy

36. Prioritisation table – June 2010

37. Roles PC Strategy SIG Implementation NAB / ISB political assessment Consistent Messaging Communication Informed citizens, Business, Industry, Unions, NGOs, Academics, Consumers … Media (advertising)Segmented but not personalised Advocacy Institutions (rules) Negotiation (sales) Personalised

38. Coordinate Advocacy/Communication Advocacy = time-limited CONSISTENCY tailor-made messages focussed messages

39. Target Programme Councils Communication Advocacy

40. Coordination (COGO) Issue management (position paper) Distance to reduce Communication (one pager) Distance to reduce Advocacy (status report)

41. Timeline 2009-2010 – Energy & HSEyellow first reading, orange second or final reading, blue comitology – red box = event 41

42. Advocacy : one voice policy Cefic EU Alliances National alliances Companies Federations 42