Political Hotspot for October newsletter 2018

Unfair Trading Practices: Update from the Parliament and the Council

After 10 years of debating about the issue with experts, stakeholders and Member States, in April 2018 the European Commission published a proposal for a directive on unfair trading practices in business-to-business relationships in the food supply chain. This proposal was welcomed by most stakeholders who saw the necessity for European-wide legislation to address the issue of trans-border unfair trading practices (UTPs).

IFOAM EU is working on this file both internally, as well as with a coalition of NGOs comprising for instance Oxfam, Fair Trade, and Traidcraft.

IFOAM EU’s position
IFOAM EU specifically welcomed the Commission’s proposal on UTPs in its position paper and highlighted ways to strengthen the proposal. One of the most contentious issues in this file is the scope of the proposal in terms of actors covered. The Commission foresees the coverage of SME suppliers and large buyers, while many stakeholders, including IFOAM EU, advocate for the full coverage of actors for the sake of fairness in the food supply chain. Another point of contention is the list of UTPs that are explicitly banned in the proposal, which IFOAM EU would like to see lengthened. IFOAM EU also advocated for giving NGOs who have an expertise in producer-related issues the opportunity to also be able to file a complaint. The Commission proposal only stipulates this opportunity for producers and producer organisations.

Policy-making: State of play
Following the publication of this proposal, both the European Parliament and the Council worked hard to each develop a position.

On 1 October 2018, Member States in the Special Committee on Agriculture (SCA) reached an agreement regarding the negotiating position of the Council. The Council’s position does not seem to vary massively from that of the Commission, the biggest exception being the scope of products which the Council has extended to agricultural and food products, instead of only food products as is the case in the initial Commission proposal.

European Parliament
The lead committee in the European Parliament is the Committee on Agriculture and Rural Development (AGRI), with Member of European Parliament (MEP) Paolo De Castro as rapporteur. Three additional committees were involved in this proposal: the Committee on the Internal Market and Consumer Protection (IMCO) with rapporteur: MEP Tarabella, the Committee on the Environment, Public Health and Food Safety (ENVI) with rapporteur MEP Ayuso, and the Committee on Development (DEVE) with rapporteur MEP McAvan.

As the lead committee is AGRI, the current article will focus on the report of this committee. In general, the report is quite positive as it took into account many of the points that IFOAM EU and other NGOs were advocating for. For instance, the scope in terms of actors was extended to the whole supply chain, certain NGOs can file a complaint, a definition of UTPs was included in the report, and the possibility of a review clause was included in the report. However, a negative amendment was voted through in the final AGRI report which prohibits “provisions laid down by the buyer regarding environmental protection and animal welfare standards which are more stringent than the relevant legal provisions in force”. As such, our current advocacy efforts in terms of the Parliament’s report are devolved into not adopting this amendment in the final report.

On 25 October, the Parliament gave a mandate to the rapporteur and the first of the trialogue negotiations with the three institutions took place on the same day.

Next steps
Further to the Parliament's vote and the first trilogue negotiations on 25 October at midday, the next trialogues are scheduled on 7 and 21 November.
One particularity of this file is that the negotiations are happening very rapidly given that actors involved are pushing for the legislation to be adopted prior to the next European elections. As such, the aim is to adopt this legislative act by May 2019. Advocacy efforts during the trialogues will be to bring the Commission’s and the Council’s proposals closer to the Parliament’s report (with the exception of the amendment mentioned above). In addition, a Commission proposal on market transparency is expected by the end of this year and would complement the UTP proposal with the aim of increasing fairness in the supply chain even more.

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