7 minute read
EU Policy and Lobbying
A new EU legislature and a new European Commission
The past year proved to be a busy one, with the Von der Leyen Commission keen to make its mark early on in its mandate. Many new legislative proposals were brought forward, mainly focusing on the green and digital transitions, with the Commission keen to future-proof European businesses in terms of digital competence as well as environmental and financial sustainability, ensuring the EU competes with the likes of the United States and China with regards to its economy.
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The MBB’s Brussels office kept Maltese businesses updated with issues of pressing concern and weighed in on discussions by promoting the interests of Maltese businesses on priority issues. It worked closely with several stakeholders and experts in various fields to gather information and contributed to consultations by the European Commission or local entities at an early stage.
EU Legislative Update
Digital Services Act (DSA)
The DSA was published, bringing with it proposed EU-wide harmonised obligations that will apply to all digital services. The DSA is seen to build upon the principle-based approach of the 20-year-old E-Commerce Directive by bringing with it more specific obligations fit for the boom in online provisions of goods and services. The key obligations include procedures for the removal of illegal content, safeguards for users whose content has been erroneously deleted, rules on traceability of businesses on online marketplaces, and an innovative cooperation process among Member States’ enforcement authorities, among others.
The European Parliament and the Council are currently negotiating their internal positions on the Commission’s proposal. Positions from both institutions are estimated to be revealed in the opening months of next year, upon which trilogue negotiations to find common ground can start. Once an agreement is reached, the final text will be adopted and directly applicable across the EU. The MBB is working hard to ensure that the interests of Maltese businesses are respected within the negotiations and is strongly pushing for the countryof-origin principle to be respected, so that small businesses can continue doing business across borders, under the same rules of the country of their establishment.
Corporate Sustainability Reporting Directive (CSRD)
The Commission also published its proposed revision of the CSRD (formerly known as the Non-Financial Reporting Directive), which lays down the rules on disclosure of nonfinancial and diversity information by large companies, employing more than 500 people. The revision now expands the scope of the Directive to all large companies employing more than 250 employees, and all companies including SMEs listed on regulated securities market. These undertakings will be required to report information pertaining to sustainability factors and the impacts of the undertaking on society and the environment, and its strategy and policies in relation to sustainability factors. Reporting will be required on risks to sustainability factors, how the company plans to take into account the interests of stakeholders, the impacts on supply chains, as well as information on intangible assets, including information on intellectual and human capital.
The obligations will not apply to non-listed SMEs, however the Commission will publish a set of voluntary standards for those companies. The proposal was very recently adopted and has been communicated to the Parliament and Council for negotiations to commence.
PHOTO BY EUROPEAN UNION
EU Digital COVID Certificate
In light of restarting cross-border movement following the COVID-19 pandemic, the Commission has also proposed the EU Digital COVID Certificate, which will be an authentic document that would be verified across the EU. This is known colloquially as the ‘vaccine passport’, however it must be pointed out that this will not work in the same way as a passport in practice and will not serve to hinder free movement. It will serve as digital proof of whether an EU resident has been vaccinated, received a negative COVID-19 test result, or recovered from COVID-19.
Given the urgency of the matter, both Council and Parliament used fast-track procedures and came to an agreement within a matter of a few weeks. They will now negotiate for a final agreement, estimated to be reached in June 2021, in the hope that the digital certificate will be used to facilitate tourism for the 2021 summer season.
Adequate Minimum Wages
In October 2020, the European Commission issued a Directive on Adequate Minimum Wages that builds on the European Pillar of Social Rights. Among others, the Directive proposes to introduce common criteria within the framework of how statutory minimum wages are calculated in Member States, which include at least the following elements: the purchasing power of statutory minimum wages, considering the cost of living and the contribution of taxes and social benefits; the general level of gross wages and their distribution; the growth
rate of gross wages; and labour productivity developments. Member States would also be required to ensure that minimum wages are updated in a regular manner to preserve their adequacy. Reference is made to international standards indicating that adequate minimum wages would be around 60 per cent of gross median wages and 50 per cent of gross average wages in a country.
The proposal aims also to increase collective bargaining coverage in Member States and where this is less than 70 per cent calls for an action plan to promote this practice.
Pay Transparency
The European Commission presented an EU Pay Transparency proposal in March 2021, with the objective of strengthening the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms. This Directive fits in the wider policy framework of the EU’s Gender Equality Strategy for 2020-2025 pioneered by European Commissioner for Equality Helena Dalli. Some of the provisions of the Directive include the right for workers to receive information (on request) on individual pay level and the average pay levels; information on pay to be included in job adverts or provided to candidates before the interview; reporting obligation for companies with more than 250 employees on pay gap between male and female workers; and in case where the reporting highlights a pay gap of at least five per cent, the employer is obliged to carry out a detailed pay assessment in cooperation with workers’ representatives.
EU Non-Legislative Update
Better Regulation
Moving on to the Commission’s strategy for the coming years, a Communication on Better Regulation was published, laying out a plan to improve the law-making process. The aim of this is to set out a plan for EU institutions to ensure that legislation being drafted internally adequately addresses the needs for citizens and businesses, and are future-proof. The Commission has appealed for cooperation with European, national and local authorities to increase the drive to remove administrative burden and red tape, and ensure that laws are fit for purpose. The Commission has also committed to introducing a ‘one in, one out’ principle, whereby when laws are introduced, their effect in terms of administrative and financial burden is quantified, and reduction of equivalent burden from past laws is achieved through repeal or revision wherever possible.
New Industrial Strategy
A communication on updating the Industrial Strategy was also published, outlining the EU’s commitment to ensure that its industrial policymaking learns lessons from the COVID-19 crisis and helps drive the transformation to a more sustainable, digital, resilient and globally competitive economy. A number of proposals were put forward, including for a Single Market Emergency Instrument, a structural solution to ensure free movement during future crises; enforcing the Services Directive to ensure that Member States comply with their obligations to not introduce disproportionate requirements on foreign companies; strengthening market surveillance of products by supporting national authorities to increase capacity; and mobilising investment to support SMEs, including addressing payment delays, providing measures to address solvency risks and implementing Alternative Dispute Resolution schemes.
The MBB welcomed this communication, particularly as some key issues raised in the MBB’s 2019 report, The Impact of the European Single Market on Maltese Businesses, were taken up, specifically the commitment for greater enforcement on the obligations of the Services Directive which will ensure that Member States do not introduce protectionist requirements, also providing support to member states’ market surveillance authorities to increase their capacity to better be able to go about their duties and ensure a fair level playing field for all companies.
Other important strategies issued during this period were the Action Plan for the European Pillar of Social Rights, Europe’s Digital Decade; Renewed Partnership with the Southern Neighbourhood (Mediterranean); Review of the EU Trade Policy; and Business Taxation for the 21st century.
Conference on the Future of Europe
During this period, the Conference on the Future of Europe was also launched. The aim is to give EU citizens a greater say in the EU’s future direction, including vis-à-vis the institutional and governance structure of the Union with the possibility of Treaty changes where necessary. The EU’s vision on policy topics, including climate change, economic and social issues, and the digital transformation will also be examined. This will be a year-long process, with the goal of finalising the process before summer 2022. European citizens may submit feedback directly via a public portal that has been made available online. The MBB plans to contribute its vision for the EU on behalf of Maltese business.
