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Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Regulation (EC) No …/… amending Council Regulation (EC) No 219/2007 on the establishment of a joint undertaking to develop the new generation European air traffic management system (SESAR)’

On 4 September 2008, the Council decided to consult the European Economic and Social Committee, under Articles 171 and 172 of the Treaty establishing the European Community, on the

Proposal for a Council Regulation (EC) No …/… amending Council Regulation (EC) No 219/2007 on the establishment of a joint undertaking to develop the new generation European air traffic management system (SESAR)

On 16 September 2008, the Committee Bureau instructed the Section for Transport, Energy, Infrastructure and the Information Society to prepare the Committee's work on the subject.

Given the urgent nature of the work, the European Economic and Social Committee appointed Ms Le Nouail Marlière as a rapporteur-general at its 449th plenary session, held on 3 and 4 December 2008 (meeting of 3 December), and adopted the following opinion by 99 votes to 16 with 10 abstentions.

1.1 The Committee supports the proposal to align the Regulation and Statutes of the SESAR Joint Undertaking.

1.2 The Committee recommends that the Commission set a better example with regard to equal treatment of seconded staff and staff recruited to conduct the SESAR Project, with respect to the duration of contracts and job allocations on the conclusion of the programme to develop the new generation European air traffic management system.

2.1 The Committee has been consulted on the proposal to align the Regulation and Statutes of the SESAR Joint Undertaking (1) with the EU's new approach to the establishment of other Joint Undertakings created in the context of the 7th Research and Development Framework Programme (FP7), i.e. CLEAN SKY (2), ENIAC (3), IMI (4), ARTEMIS (5) and FCH (6). The Committee has issued opinions on all these proposals, bar one.

2.2.1 The SESAR Joint Undertaking legally exists since 3/3/2007 and its seat is in Brussels. It has two founding members: the Community, represented by the European Commission, and Eurocontrol, represented by its Agency.

2.2.2 The setting up of the SESAR Joint Undertaking was initiated immediately after the entry into force of Regulation (EC) No 219/2007. In 2007 the governance (consisting of the Administrative Board and the Executive Director) and an initial administrative structure were put in place.

2.2.3 In June 2007 the SESAR Joint Undertaking launched a call for expressions of interest for candidate members. The call resulted in the pre-selection of 15 candidates for the purpose of constituting a strong initial core group of members for launching the development phase of SESAR. The 15 candidate members represent the major stakeholders of the air traffic management sector (Industry): air navigation service providers, airports and equipment manufacturers. The initial offers for contributions to the SESAR Joint Undertaking totalled over 1,4 billion EUR.

2.2.4 Industry has confirmed its commitment to the programme already demonstrated in the definition phase. It has been working together with the Joint Undertaking to establish a common understanding on how to work in partnership in the SESAR Joint Undertaking. The alignment of its ATM related research and development activities to SESAR and the allocation of the necessary resources constitute a major achievement. The finalisation of the membership process is scheduled for the end of 2008 with the objective to launch the development activities in early 2009.

2.2.5 Although in accordance with Article 2(2) of Regulation (EC) No 219/2007: ‘Member States shall take all possible measures to afford the Joint Undertaking the most extensive exemption from taxation as possible as regards to VAT and other taxes and duties’, the founding Regulation does not provide a legal basis that would grant the Joint Undertaking exemption from VAT and excise duties or any benefits resulting from the Protocol on privileges and immunities granted to EU institutions or Community bodies. Nor does it provide for its staff to be covered under the conditions of employment of the Staff Regulations of the European Communities, nor of other servants of the European Communities. Consequently, the Joint Undertaking and its staff are subject to the Belgian tax and employment legislation.

2.2.6 The estimated cost in terms of administrative expenditure resulting from particular status has been estimated to be 300 million EUR over the lifespan of the Joint Undertaking. 290 million EUR alone represent the amount of VAT and other taxes that will have to be paid by the SESAR Joint Undertaking. The remaining 10 million EUR are related to the staff costs.

2.2.7 This amount will be paid through the members' contributions to the SESAR Joint Undertaking and in particular from the Community Research and Development funds and therefore will have to be subtracted from the financing of the development activities.

2.3.1 The proposed amendments to Regulation 219/2007 take into account that the SESAR Joint Undertaking has already started its activities under a different legal status. They can be summarised as follows:

3.1 The Committee supports the Commission's general objective of taking account of the lessons learnt from the management of the Galileo Joint Undertaking and the establishment of the SESAR Joint Undertaking (7) and encouraging the Council to clarify the status of the SESAR Joint Undertaking. In addition, given the growing number of Joint Technology Initiatives (JTI) being conducted under the 7th Framework Programme, it also supports the objective of guaranteeing consistency with the general approach towards Joint Undertakings.

3.2 The Committee supports the efforts to ensure that resources are allocated to the SESAR Joint Undertaking in such a way that the main focus is on research and development with a view to ensuring a coherent approach to civil aviation security. By changing the status of the SESAR Joint Undertaking, the Commission expects to gain an extra 290 million Euros, as a result of exemption from taxation as regards to VAT and other taxes and duties. In addition, the changeover of staff to the status of EU officials will be an improvement and staff will have the option to become officials of the European Communities, without being obliged to do so. This change in staff status will also have a positive effect (10 million Euros) on administrative costs, without being detrimental to pay, benefits and additional pension rights, since from the initial establishment of the SESAR Joint Undertaking, the Commission had taken steps to ensure that the SJU Statutes on employment conditions would be ‘based on those of the servants of the European Communities’.

3.3 The Committee welcomes the fact that Community control of SESAR will be strengthened through the application of Community financial rules, a budget discharge, strategic management and human resources. This proposal accords with the suggestion made by the Committee in its previous opinion on SESAR namely that, ‘it is vital to set up a legal entity capable of ensuring the coordinated management of the funds assigned to the SESAR project during its implementation phase’. The proposal should have positive consequences for supervision of the project. The Committee takes note of the Commission's increased responsibility in a programme receiving funding to the tune of 700 million Euros from the EU, 700 million Euros from Eurocontrol and 700 million Euros from the aeronautics industry. Since the latter two will be making a substantial proportion of their contribution in kind, the related VAT exemption will allocated to research and development.

3.4 The development phase of the SESAR Joint Undertaking should be launched at the beginning of 2009 so as to ensure that the industry stakeholders are involved and to enable them to plan their activities around the SESAR objectives. For this reason, the Committee agrees with the Commission's argument that the regulation should be adopted rapidly so that the agreements with the Members of SESAR can be aligned with the new provisions. Delays in the implementation of SESAR are not desirable, in view of the competition from the NextGen initiative in the United States.

4.1 Since it has already been determined that the SJU will have a lifespan of eight years, on completion of the programme, seconded staff will return to Eurocontrol or the Commission departments they came from. Contracts for staff who were recruited externally will terminate according to the conditions established at the time of recruitment. The Committee notes the precedent this sets (i.e. the creation of an enterprise with a fixed term) and the resulting impact in terms of the relative insecurity of some of the jobs created. The Committee recommends that the Commission ensure that it sets an example of best practice with regard to equal treatment of staff seconded and recruited to carry out the SESAR programme.

4.2 Taking account of the particularities of this sector (i.e. Member States' sovereignty over their airspace, public-private partnerships and sovereign services) and given that the aim of the SESAR Joint Undertaking is harmonisation and research to produce optimum European air safety, the Committee therefore recommends that air safety should not be seen solely in technical terms (equipment) or commercial terms (routes), but should also take account of the fact that it relies on human beings (the men — and women — who contribute to it and should indubitably be more involved and given more consideration).

4.3 The Committee takes note of the Decision of the SESAR Joint Undertaking's Administrative Board of 24 April 2008, attended by representatives of the Commission, Eurocontrol, the armed forces, airspace users, providers of air navigation services, equipment suppliers, airports, staff representatives from the air traffic control sector, the scientific community, the Executive Director, the interim Administrative and Financial Director and the Secretariat, who ‘endorsed the principles for the contemplated modification of the Statutes and the related process’.

Brussels, 3 December 2008.

The President of the European Economic and Social Committee

Mario SEPI

The Secretary-General of the European Economic and Social Committee

Martin WESTLAKE

(7) The SESAR Joint Undertaking was only the second entity of this type established under Treaty Article 171, after the GALILEO JU.