Decision of the European Ombudsman on complaint 1007/97/IJH against the European Commission

Dear Mr J.,
On 24 October 1997 Robin TEVERSON MEP transmitted your complaint against the Commission to the Ombudsman. The complaint alleges that the Commission was negligent in allowing a situation to develop which is anti-competitive and distorts market forces, in that pig production is subsidised in other Member States but not in the UK.
On 17 November 1997, I forwarded the complaint to the Commission. The Commission sent its opinion on 27 February 1998. I forwarded the opinion to you with an invitation to make observations, which you sent on 20 May 1998. On 9 September 1998 I wrote to the Commission asking for additional information. The Commission replied on 19 November 1998. On 15 December 1998, I wrote again to the Commission asking for additional information and on the same day I wrote to inform you of the action which I had taken. The Commission sent its reply on 18 March 1999 and I forwarded it to you with an invitation to make observations, which you sent on 3 May 1999.
I am writing now to let you know the result of the inquiries that have been made.

THE COMPLAINT

The complainant claimed that the Commission deliberately allowed a situation to develop which is anti-competitive and distorts market forces. According to the complaint, the Commission did this by allowing the United Kingdom to withdraw from an agricultural investment subsidy scheme, with the result that pig production is now subsidised in other Member States but not in the UK.

THE INQUIRY

The Commission's opinion
The Commission stated that the complaint had not been preceded by any administrative approaches to it. Nonetheless, it provided the following information:
Regulation 866/90(1) concerns the improving of the processing and marketing conditions for agricultural products. It permits Member States to propose schemes to improve the structures of various product sectors and to request Community co-financing up to 50 %.
By Decision 94/836/EEC(2) the Commission approved a Single Programming Document for Community structural measures for improving the processing and marketing conditions for agricultural products in the United Kingdom between 1994 and 1999.
On 15 December 1995, the UK authorities presented a request to withdraw the scheme in England after 31 March 1996. According to the UK authorities, this request was based on the need to contain UK public expenditure and to fund other priorities.
Before carrying out the procedures to accept this request, the Commission Services asked the UK authorities to provide full clarification on the matter.
In February 1996, the United Kingdom presented to the Commission an updated Single Programming Document. As the Commission considered that the revised Document continues to meet the requirements for Community co-financing set out in Regulation 866/90, the British request to withdraw the scheme in England was then allowed by Commission Decision 96/388/EEC.
The complainant's observations
In observations on the question of prior administrative approaches, the complainant stated that Robin TEVERSON MEP had repeatedly sought clarification from the Commission on the issue of subsidies for pig production.
As regards the substantive issue, the complainant pointed out that the Commission appeared only to have considered whether the UK's revised Single Programming Document met the requirements for Community co-financing. In his view, the Commission should also have been concerned that, through the adoption of Decision 388/96 approving the UK's proposal, they were setting up a market distortion.

FURTHER INQUIRIES

After careful consideration of the Commission's opinion and the complainant's observations, it appeared that two matters were in dispute between the parties:

i) whether the complaint was preceded by the appropriate administrative approaches, as required by Article 2 (4) of the Statute of the Ombudsman;

(ii) whether Decision 96/388 took possible effects on competition into account.

As regards (i), the Ombudsman informed the Commission that he would continue to deal with the complaint for reasons which are explained in part 1 of the decision below.
As regards (ii), the Ombudsman asked the Commission to inform him of whether it considered possible effects on competition in the procedure leading to the adoption of Decision 96/388 and, if so what steps it took to ensure that it was adequately informed on the matter.
The Commission answered that the procedure leading up to the adoption of Decision 96/388/EC permitted it to take into account the potential effects of the measure, including those on competition and the market. The division dealing with competition in agriculture and the market division for pigmeat were consulted and, furthermore, the decision was in accordance with the opinion of the Committee on Agricultural Structures and Rural Development (the STAR Committee).
After considering the Commission's answer, the Ombudsman asked the Commission to provide detailed evidence as to how competition issues were taken into account in the procedure leading to the adoption of Decision 96/388/EC.
In reply, the Commission forwarded to the Ombudsman a detailed account of the various stages in the procedure leading to the adoption of Decision 96/388/EC together with copies of the documents concerned.
The complainant responded by stating, in summary, that the documents showed that the Commission took proper advice, but that the advice was erroneous insofar as the effects of the action taken could not have been known and the effect on the British pig industry was immense.

THE DECISION

1 Prior administrative approaches
1.1 According to Article 2 (4) of the Statute of the Ombudsman, a complaint "must be preceded by the appropriate administrative approaches to the institutions and bodies concerned." By giving the institution or body concerned the opportunity to resolve problems that could give rise to a complaint, Article 2 (4) is an important safeguard for efficiency.
1.2 In the standard form on which the complaint was submitted, the complainant referred to discussions with Commission officials. In its opinion, however, the Commission stated that the complainant had not previously addressed himself to the Commission. The complainant's observations referred to previous contacts with the Commission by the complainant's MEP, Mr Robin TEVERSON.
1.3 The Ombudsman informed the Commission that he would continue to deal with the complaint, since further administrative approaches were not an appropriate way to deal with the substantive questions which remained unresolved following the Commission's opinion and the complainant's observations.
2 The adoption of Decision 96/388/EEC
2.1 The complainant claimed that the Commission deliberately allowed a situation to develop which is anti-competitive and distorts market forces, in that pig production is subsidised in other Member States but not in the UK.
2.2 The Ombudsman's inquiry revealed that in 1994 the Commission approved an agricultural investment subsidy scheme for the UK(3), jointly funded by the UK authorities and the Community under Regulation 866/90(4). In 1996, by Decision 96/388(5), the Commission approved a request from the UK authorities to withdraw the scheme in England. The UK authorities based the request on the need to contain public expenditure and to fund other priorities in England.
2.3 The Ombudsman's inquiry also revealed the details of the Commission's procedures leading to the adoption of Decision 96/388 : the relevant division of DG VI prepared a working document and draft decision, on which there was consultation with other divisions of DG VI, including those responsible for competition and for the pigmeat sector and with other Directorates General and the Legal Service. The matter was then dealt with through an oral procedure at the Commission's weekly meeting and authorised to be adopted under delegated powers, after transmission to the Committee on Agricultural Structures and Rural Development (STAR Committee), which gave a unanimous favourable opinion.
2.4 The Commission forwarded to the Ombudsman the documents considered in the above-mentioned procedures including : the working document and draft decision; all the notes of agreement from the Commission services consulted; the documents prepared for the oral procedure of the Commission; and the minutes of the relevant meeting of the STAR Committee.
2.5 The complainant accepted that the above-mentioned documents showed that the Commission took proper advice, but considered that the advice was erroneous insofar as the effects of the action taken could not have been known and the effect on the British pig industry was immense.
2.6 Even if the complainant's assessment of the consequences of the withdrawal of processing and marketing grants in England is correct, the Ombudsman's inquiry revealed no evidence that the Commission's adoption of Decision 96/388/EEC breached any rule or principle binding upon it. Consequently, there appears to be no evidence of any maladministration in the adoption of Decision 96/388/EEC.
3 Conclusion
On the basis of the Ombudsman's inquiries into this complaint, there appears to have been no maladministration by the Commission. The Ombudsman therefore closes the case.

FURTHER REMARKS BY THE EUROPEAN OMBUDSMAN

The Ombudsman notes the complainant's continued concern that the withdrawal of investment subsidies, at the request of the UK government, has caused the pig industry In England to become uncompetitive, as compared to the pig industry in other Member States where subsidies continue to be available. The Ombudsman also notes that the complainant has the right to petition the European Parliament on any matter which comes within the Community's fields of activity and which concerns him directly.
The President of the European Commission will also be informed of this decision.
Yours sincerely,
Jacob SÖDERMAN

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(1) 1990 OJ L 91/1

(2) 1994 OJ L 352/12

(3) Approval was given by Commission Decision 94/836/EEC (1994 OJ L 352/12) approving a Single Programming Document for improving the processing and marketing conditions for agricultural products in the United Kingdom between 1994 and 1999.

(4) Council Regulation 866/90 of 29 March 1990 on improving the processing and marketing conditions for agricultural products, 1990 OJ L 91/1.

(5) Commission Decision 96/388/EEC of 17 June 1996, 1996 OJ L 155/58.