Voluntary accords get mixed response

Date: 30/05/1996

By Fiona McHugh

PAUL Bulteel swears by them and so do most of his friends. In fact, given their enthusiasm, one could easily conclude that few things excite industry chiefs more than voluntary agreements.

“Excellent,” declares Bulteel. “Really excellent.”

For as long as society has existed, politicians have passed laws and businessmen have - broadly speaking - obeyed them. But with industrial competition and unemployment on the rise, discontent with the traditional master-slave approach to law-making is growing.

Captains of industry complain that the legislative burden in the Union is so great that European businesses can no longer compete with their international rivals. Now governments anxious to prevent further job losses are beginning to heed their protests.

Voluntary agreements, both sides concur, may hold the key to the regulation problem. They allow governments to set legislative targets, but give businessmen the right to decide how to meet those targets.

Bulteel has first-hand experience of such government-industry cooperation. A senior executive at the Belgian electricity company, Electrabel, he was less than happy when the EU decided that SO2 and NOx emissions from large combustion plants had to be reduced. Cutting toxic emissions costs money, after all.

But once he discovered that Electrabel would have a say in the emission-cutting process, things started to look up. He and other industry representatives met the Belgian government and, after an intensive round of negotiations, cut a deal.

“Depending on the plant, we could decide to use low-sulphur fuels or natural gas, replace old plants with new plants, or install detoxifiers. In other words, we could chose the most cost-effective way of meeting the target,” explains Bulteel. “So far, all of the objectives have been reached and everyone is happy. It is a win-win situation.”

A policy tool used for years in certain member states, voluntary agreements are fast gaining credibility in EU circles. The Commission is currently preparing a draft communication, due to be formally adopted this autumn, which examines how such agreements might be used to supplement legislation.

So far no decisions have been taken, but even so environment NGOs are feeling nervous. Far from forcing industries to clean up their act, they fear voluntary agreements will allow them to duck responsibility.

“There are a number of problems with these agreements,” says Raymond Van Ermen, secretary-general of the European Environmental Bureau. “The provisions are too weak, the companies are seldom monitored and bad behaviour is never punished. That is why they are, on the whole, ineffective.”

For industry to bite the carrot, he insists, the Commission must also wave big sticks. “For them to work, the Commission would have to make it clear that if industry failed to reach the targets, then legislation would follow.”

Greenpeace is less diplomatic, insisting that voluntary agreements do not and never will work. “Industry will only change its ways if it is forced to. This is simply the Commission's way of avoiding work,” claims one.

But both the Commission and the business community reject this.

“We are not moving away from what we want, we are simply trying to find simpler, more flexible ways of achieving that,” explains a Commission official. “I think that if you involve people in the process there will be a higher degree of compliance than if you simply issue orders.”

But, as if to reassure critics of this approach, the official adds that voluntary agreements are not always the right answer.

“If the aim is to ensure that every petrol station installs a petrol vapour recovery unit, then clearly a voluntary agreement would be inappropriate,” he explains. “If, however, you want to reduce the overall level of petrol vapours being emitted, a negotiated arrangement would probably be the most effective and the cheapest way of achieving that goal.”

Offering carrots instead of waving sticks is not an entirely new concept for the Commission. It has already tried to coax firms into going 'green' by setting up a special eco-labelling scheme. That sets environmental targets for products such as light bulbs which, if met, prove their ecological prowess. Products which make the grade are awarded eco-labels, the Commission's equivalent of a gold star. The idea is to encourage firms to clean up their act by offering them labels to use as marketing tools.

But so far the response from industry has been lacklustre and critics accuse the EU of tweeking the standards to suit particular industry groups.

“Eco-labelling is not working because industry has too much say. In many cases, the standards are lowered simply to get companies to participate,” says Alexander de Roo of the European Parliament Green Group.

Commission officials admit there have been teething problems, but insist they are of a technical, and not political, nature and say they are working on ways of improving the system.