Strasbourg, 18 November 2010                                                            LR-IC(2010)14

EUROPEAN COMMITTEE ON LOCAL AND REGIONAL DEMOCRACY

(CDLR)

COMMITTEE OF EXPERTS ON LOCAL AND REGIONAL GOVERNMENT INSTITUTIONS AND COOPERATION

(LR-IC)

PREPARATION OF THE APPENDIX(CES)

TO PROTOCOL No 3 TO THE MADRID OUTLINE CONVENTION

Proposal for the overall identification

of the purpose of the provisions to be drafted

                                                  and               

Draft implementation timetable for 2011 and 2012

Secretariat Memorandum

prepared by the Directorate General of

Democracy and Political Affairs

Directorate of Democratic Institutions

This document is public. It will not be distributed at the meeting. Please bring this copy.

Ce document est public. Il ne sera pas distribué en réunion. Prière de vous munir de cet exemplaire.

Introduction

At the Committee's request, Professor Yves Lejeune, of the Catholic University of Louvain, as consultant, drew up a detailed proposal for the provisions which could appear in the appendix to Protocol  No. 3 to the Madrid Outline Convention (see appendix).

His proposal is based on an analysis of the solutions that are possible under national legal systems where transfrontier cooperation bodies are concerned, and of the measures taken by European Union member states to guarantee effective application of Regulation 1082/2006 (appendix, part I).

On this basis, the expert proposes fields to be covered by the appendix (possibly in several parts, or "deliveries") (part II A and B) and a timetable for preparation of the relevant proposals (part III).

The Committee is invited to hold a discussion on the different proposals made by the consultant, who will attend the meeting on Monday, 29 November 2010.

Action required

The Committee is invited to discuss the proposals set out in the appendix to the present document and to agree on a timetable for the drafting of the Appendix to Protocol No. 3 (possibly in several parts or "deliveries"). It is also invited to confirm its selection of Professor Yves Lejeune as consultant for this drafting work, to be done in cooperation with the Secretariat.

Appendix

APPENDIX TO PROTOCOL No. 3 TO THE MADRID OUTLINE CONVENTION

PROPOSAL FOR THE OVERALL IDENTIFICATION

OF THE PURPOSE OF THE PROVISIONS TO BE DRAFTED

AND

DRAFT IMPLEMENTATION TIMETABLE FOR 2011 AND 2012

In response to a request by the Secretary General of the Council of Europe, I, the author of this report, would like to present the LR-IC with the following proposal for the overall identification of the purpose of the “legislative, administrative or other measures as are appropriate to ensure that the provisions of Part 1 [of Protocol No. 3] are implemented”^[1], setting out the matters to be addressed in the Appendix to the Protocol. This proposal also contains a timetable for the progressive drafting of the successive parts of the Appendix and for the subsequent examination of each of these parts by the Committee^[2]. The Committee is invited to discuss this proposal and agree to the nature and form of the rules to be drawn up before the rapporteur begins drafting.

To do this work properly, some prior analysis of existing legislation was essential. At the Committee’s request, many states have sent the secretariat details of the legal rules that apply in their countries to transfrontier or interterritorial co-operation bodies including EGTCs. In addition, full use has been made of the information provided on the Committee of the Regions’ website on most of the national measures implementing Regulation (EC) No. 1082/2006. This information was used to assess the differences and similarities in the measures adopted and to list issues that have been dealt with by law and those for which the response has been disparate, inadequate or non-existent. The first part of this report contains the results of this survey.

It is proposed subsequently to draft detailed standard-setting measures, capable of being applied without their having to be fleshed out further at national level, possibly also including alternative versions determined by the state of the various national legislations. Part two of the report describes the political factors which the proposal will have to take into account and gives a general outline of the purpose and the underlying principles of the variants of the provisions to be drafted. Part three comprises a draft timetable of implementation.

i. national legal rules on the establishment and functioning of transfrontier or territorial co-operation bodies

The following states answered the Council of Europe questionnaire: Belgium (Flemish Region), Bulgaria, the Czech Republic, Estonia, Greece, Hungary, Latvia, Montenegro, Poland, Romania, Spain, Turkey.

Use was then made of the documents on the Committee of the Regions’ site (in German, English, Spanish, French, Italian and Dutch) describing the measures taken by the following states to implement the EGTC Regulation: Germany (Bavaria, Berlin, Brandenburg, Rhineland-Palatinate, Saxony, Saxony-Anhalt, Thuringia), Austria (Federal Authority, Vorarlberg, Carinthia), Belgium (Brussels and Flemish Regions; German-speaking Community), Bulgaria, Spain, Estonia, Finland, France, Hungary, Italy, Luxembourg, the Netherlands, Poland, Portugal, Romania, the United Kingdom, Slovakia, Switzerland (Canton of Geneva) and Turkey.

A. Comparison of approaches adopted by the national legal systems

The very few states which have specific legislation partly or fully governing transfrontier or interterritorial co-operation are as follows: Spain (Royal Decree 1317/1997 of 1 August 1997 and the Treaties of Bayonne of 10 March 1995 and Valencia of 3 October 2002); France (the General Code of Local and Regional Authorities, Part V, Book VII, Section II, and the articles of the chapter on decentralised co-operation); and the Canton of Geneva in Switzerland (Act of 14 November 2008).

Current national legislation is most often limited to authorising the participation of local authorities in transfrontier or interterritorial groupings and, where appropriate, arranging supervisory control. This is the case with the Flemish Region in Belgium (Decree of 6 July 2001), Greece(Municipal Code No. 3463/2006, Article 221) and Romania (Act No. 215/2001, sections 15.3 and 15.4).

B. Lessons to be learned from the national measures ensuring the effective application of Regulation (EC) No. 1082/2006

A number of European Union member states did no more when implementing the provisions of the regulation than to designate the competent authority or authorities to agree to the participation of a prospective member (Article 4.3), receive the documents and communications referred to in Article 4.2 and 4.6, control the management of public funds (Article 6), prohibit the activities of an EGTC (Article 13) or order its dissolution (Article 14). This is the case with the Flemish Region (Decree of 21 December 2007 and Orders of 18 January and 26 September 2008) and the German-speaking Community of Belgium (Decree of 23 June 2008), Austria (the Federal Act of ?) and several of the Länder in Austria (Vorarlberg, Act No. 18/2009; Carinthia, Act of 18 December 2008) and Germany (Bavaria, Act of 20 December 2007; Berlin, Senatorial Decision No. 200/2007 of 20 February 2007; Brandenburg, Regulation of 22 November 2007; Rhineland-Palatinate, Regulation of 18 July 2007; Saxony, Interministerial Regulation of 2 January 2008; Saxony-Anhalt, Governmental Decision of 27 July 2007 and Thuringia, Regulation of 23 July 2007). Sometimes the implementing legislation has contained additional provisions, as in Luxembourg (Act of 19 May 2009), the Netherlands (Act of 26 November 2009) and probably also the Czech Republic (Act No. 154/2009, not available in English or French). Only some states specify the particular legislation to which the EGTC will be subject (Estonia: Act No. 293 of 16 June 2008, referring to the Trade Associations Act; France: the General Code of Local and Regional Authorities, Article L. 1115-4-2, incorporated by Act No. 2008-352 of 16 April 2008, referring to the system of open joint local authority associations (syndicats mixtes ouverts); the United Kingdom: the 2007 EGTC Regulations (No. 1949), referring to the Companies Act of 1985).

Other member states have preferred to transpose the EU Regulation into their law as if it were a European Directive, sometimes using this as an opportunity to deal with issues such as the public or private law nature of any EGTC with headquarters in their country, what particular legislation applies to such bodies, the extent of their members’ subsidiary responsibilities and the possibility of seconding public employees to work for them. This is the case with Spain (Royal Decree No. 17 of 19 January 2008), Finland (Act No. 554/2009 of 24 July 2009), Greece (Act No. 3613/2007, section 22, amending Article 221 of the Municipal Code; Interministerial Decision No. 36808 of 30 June 2008), Hungary (Act XCIX of 2007), Italy (2008 European Community Act, chapter 3), Poland (Act of 7 November 2008), Portugal (Legislative Decree No. 376/2007), Romania (Emergency Order of 12 November, approved and amended by Act No. 52 of 19 March 2008) and Slovakia (Act of 15 February 2008). Slovakia’s legislation in this field is particularly comprehensive.

* * *

To sum up, the regulations that apply to EGTCs seem to be complete in those countries which have indicated which national legislation applies subsidiarily to these groupings (Bulgaria, Estonia, France, Greece, Hungary, Poland, Portugal, Spain^[3] and the United Kingdom). EGTCs are regarded as public law entities^[4] in France, where they are seen as open joint local authority associations (syndicats mixtes ouverts), Spain, where they are consorcios, and Portugal, where they are public law associations^[5]. Elsewhere, they are considered to be private law entities, being viewed in Bulgaria as non-commercial associations serving the general interest, in Estonia as trade associations, in Greece and in Hungary as non-profit-making associations, in Poland as associations and in the United Kingdom as companies.

Where provisions intended to ensure the effective application of Regulation No. 1082/2006 in a given state do not at least state the legal category of bodies to which EGTCs which have their headquarters there belong, it must be assumed that they establish an often incomplete legal status of its own kind for these groupings^[6].

II. Delimitation of the subsequent drafting work

on the provisions of the Appendix

In view of the close ties between the EGTC Regulation and Protocol No. 3, it is appropriate to prepare for the implementation of Part II of the Protocol by taking account in large part of the lessons to be drawn from the progress of the national measures to implement the EU regulation. The comparative law of the Council of Europe member states must also be taken into consideration as it offers specific legal solutions to the problems of setting up, organising and running transfrontier or interterritorial co-operation bodies involving local and regional entities or authorities from separate countries. This is particularly true of the relevant French and Genevan legislation and, to a lesser degree, of the Franco-Spanish Treaty of Bayonne (10 March 1995), the Spanish-Portuguese Treaty of Valencia (3 October 2002), the four-party Karlsruhe Agreement (23 January 1996) and the Franco-Belgian Agreement of Brussels (16 September 2002).

Beforehand, a reminder should be provided of the political background to the final draft of Protocol No. 3. These factors restrict and determine to some degree the scope of the proposals which can usefully be made to the LR-IC.

A. Political factors to be taken into account when drafting the Appendix to Protocol No. 3

When drafting the Appendix, the following three types of factor need to be borne in mind:

a)    For the European Ministers responsible for Local and Regional Government, the aim of the Protocol is to establish a “clear and effective legal framework for institutionalised co-operation between territorial communities or authorities”^[7], harmonising the rules on Euroregions^[8] and transfrontier or interterritorial co-operation bodies set up for a specific public-service task. The legal instrument which provides this framework — namely the Protocol and its appendix — must, however, offer more diverse solutions than Regulation No. 1082. This flexibility must allow the states parties to Protocol No. 3 to establish a framework more in keeping with their traditional legal principles for the transfrontier relations of their local and regional entities or authorities.

b)    For some states — whether or not they are EU members —, the aim is to be able to have additional rules through which they can set up ECGs which can be regarded as equating in all respects to EGTCs. The main motivation for this position seems to be the belief that all transfrontier or interterritorial co-operation bodies which can contribute to the “facilitation and promotion of territorial co-operation to strengthen economic and social cohesion”[9] with the European Union’s financial support should meet all the conditions set by this regulation. Another probable reason for the desired alignment with the status of EGTCs is a concern to avoid creating too many types of transfrontier or interterritorial co-operation bodies and, more particularly, to standardise the status of groupings called on to implement territorial co-operation programmes or projects co-financed by the European Union.

While paragraphs 8 and 15 of the preamble to Regulation No. 1092 explicitly refute the first reason referred to as they state that the use of EGTCs to improve “territorial co-operation” in the European Union is entirely “optional”, the second reason is more convincing. It is for this reason that the proposals on the drafting of the appendix should, on the one hand, contain a series of provisions that resemble or are at least compatible with the framework established by the EGTC Regulation and, on the other, offer the possibility of establishing every type of co-operation that is compatible with part one of Protocol No. 3.

c)  A third main principle should be noted. The rejection of the old expression “uniform law” reflects the states’ laudable concern to avoid applying over-meticulous rules to the organisation and functioning of ECGs so as to give “prospective members” enough freedom when establishing the statutes of the groupings they wish to set up.

Consequently, the drafting proposals to be made to the Committee should not exceed what is necessary to establish “a clear and effective legal framework” for institutionalised co-operation between regional or local authorities from separate states without restricting local or regional self-government.

B. Overall identification of the purpose and the variants of the provisions to be drafted

a) Content

Four general proposals can be made:

- the exact areas in which Protocol No. 3 calls for simple execution to the same degree as Regulation No. 1082 should be listed;

- the rules of the Protocol should include the additions required as a result of the “EGTC experience” (e.g. those concerning the private or public nature of the grouping, staffing, public procurement and problems raised by the limited subsidiary responsibility of grouping members);

- part one of the Protocol should be completed by including in the Appendix proposals for other national rules designed specifically to cover public-law ECGs;

- other more general gaps in the Protocol should be filled (e.g. no provision is made for participation by groupings or associations of local or regional authorities).

Suggested provisions will take account:

- of the variety of tasks which may be assigned to ECGs;

- of the fact that some ECG members’ powers do not cover all the tasks assigned to a grouping.

b) Variants

When wording these proposals, some consideration will have to be given to the existence or absence within domestic legal systems of any legislation on the status of transfrontier or interterritorial co-operation bodies. Account will also have to be taken of some states’ constitutional constraints.

Reference has already been made to the variants required by the distinction between ECGs whose status resembles that of EGTCs and those whose status differs from them. It has also been shown that, unlike EGTCs, some ECGs may have “powers assigned by public law”. However, it is not planned to draft separate model laws for “pure” ECGs and ECG-EGTC “hybrids” or for public-law and private-law ECGs. Only quite specific provisions will be proposed (such as an alternative jurisdictional clause to bring the provision of the Protocol on the settlement of legal disputes involving ECGs into line with the article in the EU regulation on jurisdiction with regard to disputes involving EGTCs).

A final variant which might be proposed would be a flexible rule about the room for manoeuvre given by each national legislator to the founders of ECGs when they are drafting the statutes of the body they are establishing.

III. Draft implementation timetable

More specifically, the provisions to be drafted might relate to the following points or areas:

a) First instalment – 2011:

• the legal structure(s) of public-law ECGs;

• transformation of an existing body into an ECG;

• potential private-law members not covered by the Protocol;

• transferring an ECG headquarters to another state;

• jurisdiction for the implementation of the Protocol in federal states.

b) Second instalment – 2011 or 2012:

• further points to be added to the statutes;

• additional ECG bodies and their powers;

• administrative transparency and respect for fundamental rights;

• composition of and law applicable to ECG staff.

c) Third and last instalment – 2012

• exercise of powers assigned by public law;

• public-service mandate, concession and delegation;

• award and execution of public procurement contracts[10]

• the rules on monitoring the lawfulness of ECG activities;

• settlement of disputes in court.