Opinion of the Economic and Social Committee on 'Genetically modified organisms in agriculture - impact on the Common Agricultural Policy'
14. 9. 98 EN Official Journal of the European Communities C 284/39 An understanding of the true situation brings only benefits. No poor person wants to continue to live in poverty. The solution thus lies in a fair and realistic shared responsibility for the prerequisites for develop- ment and a fair and realistic allocation of the fruits of development. The ESC urges that the proposals outlined in 14. this opinion be implemented without delay. Initial assessments — admittedly very limited — demonstrate, if proof were needed, that poverty represents a serious social and economic problem, quite apart from the ethical, moral and civic aspects of this issue. Everyone is involved. No-one can be unconcerned for themselves or their children, either now or perhaps in the future, nor can they fail to be concerned about the future of society in the various Member States and the protection and promotion of the values which they espouse. 15. The Committee made the same observations in 1989 in its information report. The above observations do not imply that nothing has been done in the meantime — far from it — what they do imply, however, is that the situation has worsened and that resolute, realistic policies, based on consensus, are needed to tackle it. This is an issue which fully concerns every single one of us in the European Union. Brussels, 1 July 1998. The President of the Economic and Social Committee Tom JENKINS Opinion of the Economic and Social Committee on ‘Genetically modified organisms in agriculture — impact on the Common Agricultural Policy’ (98/C 284/08) On 11 December 1997, the Economic and Social Committee, acting under the third paragraph of Rule 23 of its Rules of Procedure, decided to draw up an opinion on ‘Genetically modified organisms in agriculture — impact on the Common Agricultural Policy’. The Section for Agriculture and Fisheries, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 15 June 1998. The rapporteur was Mrs Sa´nchez Miguel. At its 356th plenary session (meeting of 1 July 1998) the Economic and Social Committee adopted the following opinion by 145 votes to two with six abstentions. 1. Introduction 1. 1. The use of modern biotechnology in agriculture offers new solutions which are, at first sight, guarantee- ing yields, helping to cut the use of plant health products in combating pests and diseases, and creating quality products. A debate is opening up within the EU on the use of transgenic organisms in farming, reflecting views on the possible undesirable medium- and long-term effects on consumer health and the environment of their application to the plant sector. Meanwhile, genetically modified produce from non-EU countries, the US in particular, is being marketed. According to estimates for 1998, transgenic 1. 1. 1. plants occupy 30 million hectares of cultivated land around the world (compared to 14 million in 1997), essentially concentrated in the United States (some 88 %), South America (Argentine cotton; 6 %) and Japan (also 6 %). The area under cultivation in China is unknown, but thought to be considerable. It is calculated that worldwide, 60 million hectares will be under this form of cultivation by the year 2000, only 1 % of which will be in Europe. 1. 2. This opinion sets out to adopt a flexible position which, nevertheless, constantly takes account of all those concerned, farmers, consumers and agro-industry, and to reach conclusions. It will focus in particular on the effects which the cultivation of transgenic organisms would have on the CAP and, consequently, on final product prices, with a view to the possible impact of their widespread presence on the international market. C 284/40 EN Official Journal of the European Communities 14. 9. 98 1. 3. A key issue, which needs to be looked at first, is that of permission to register and market genetically modified varieties. Not all Member States have similar policies in this regard: some Member States still refuse to allow genetically-modified maize varieties from the United States to circulate within their territory, in spite of Community authorization. France authorized the marketing of American transgenic maize several years ago, but until recently would not allow it to be grown on its own territory. 1. 4. Authorization of transgenic crops in the EU must be preceded by comprehensive information and wide-ranging public debate involving all interested parties, setting out in scientific terms both the advantages and disadvantages for farmers and consumers: market success depends on consumer confidence. Dialogue should be sought between GMO producers and farmers. techniques do not currently concern complex or non- localized genetic characteristics. 2. 2. In February 1998 the European Parliament adop- ted a balanced opinion on biotechnologies, firstly setting out the expected benefits for agriculture and urging the Union to make a major research effort in this field to catch up with its international competitors. It also calls for international harmonization of the legal framework governing the authorization of GMOs in order to prevent distortions of competition. Secondly, it underlined the human and environmental risks posed by biotechnolo- gies, as well as the ethical questions raised by their use. 2. 3. At European market level, on 22 April 1998 the Commission delivered a favourable opinion on marketing three genetically-modified varieties of maize and one of colza. 2. General comments 3. Technical section State of biotechnological progress at experimen- 2. 1. tal level and in practical applications. 3. 1. Definition of genetically modified organisms 2. 1. 1. Genetic engineering techniques were ready for experimental use by the mid 1980s. They began to provide commercially exploitable products in the early 1990s, with the US, Japan and China leading the field. The development of practical applications in the European Union has been held up by the obstacles which have been erected, in particular by the slow and complex official authorization procedures, the delay in granting patents, and also by a less favourable economic and industrial environment. 2. 1. 2. Applications currently concern bacteria, fungi and certain plant organisms, although potential also exists for animals. Genetic engineering applications for animals are not yet ready or profitable, and raise ethical problems for the higher animals. 2. 1. 3. Transferable characteristics are simple ones, coded by a clearly determined single locus gene. These A genetically modified (or transgenic) organism 3. 1. 1. is a living organism to which a given gene, identified on a donor organism, has been transferred by genetic engineering. The transferred gene confers a new charac- teristic or property to the plant, which is passed on to succeeding generations. 3. 1. 2. Genes may be transferred by using a bacterium such as Agrobacterium tumefasciens, which is capable of injecting genetic material into a plant cell, by means of plasmids. The genes are then incorporated into the genome of the infected cell. Another method is to bombard a plant cell with beads coated with DNA fragments containing the transfer gene. 3. 1. 3. Biotechnology includes a variety of techniques and tools in addition to transgenesis, such as in-vitro reproduction, the large-scale production of metabolites via bacteria in fermentation, etc. Not all of these techniques have necessarily resulted in large-scale appli- cations. 3. 2. Summary of commercialized GMO applications As of January 1998 Characteristic United States Canada Japan EU Soya tolerance ammonium to glufosinate- Agr Evo tolerance to glyphosate Monsanto Monsanto Can. Monsanto Japan Ltd. Inc. Monsanto 14. 9. 98 EN Official Journal of the European Communities C 284/41 As of January 1998 Characteristic United States Canada Japan EU high oleic acid content Du Pont Agr Colza/Canola modified lipid profile Calgene Calgene Inc. tolerance ammonium to glufosinate- Agr Evo Can. Agr Evo Inc. Plant Genetic (F, System (P) UK, April 1998) Novartis (Dec. 1996) Novartis (glu- fosinate), Agre- vo (glufosinate), Monsanto (glyphosate) (F, UK April 1998) tolerance to imidazole tolerance to glyphosate tolerance to a herbicide Sterile male, fertility restorer Pionner Hi Bred Int. Inc. Monsanto Can. Monsanto Japan Ltd. Inc. Monsanto Japan Ltd. Plant Genetic System Maize resistance to corn borers Northrup King Ciba Seeds & Monsanto Japan Ltd. Myogen (Novartis) (Novartis) Co. resistance to corn borers/tole- Novartis rance to glufosinate or gly- phosate Novartis Novartis resistance to lepidoptera Monsanto Ciba (Novartis) tolerance ammonium to glufosinate De Kalh Agr Evo male sterility tolerance to glu- fosinate ammonium Plant Genetic System tolerance to imidazole Tolerance to herbicide resistance to an insect resistance to an insect Ciba Seeds (Novartis) De Kalb Ge- netics Corpora- tion Pionner Hi Bred Int. Inc. Ciba Geigy Japan (Novartis) to tolerance resistance to lepidoptera glyphosate/ Monsanto Agr. Co. Potato resistance to insects resistance to coleoptera Monsanto resistance to Colorado beetle Monsanto Nature Mark Potatoes Tomato retarded ripening retarded softening Agritope Cal- gene Monsanto DNA Plant Tech Zeneca & Peto- seed C 284/42 EN Official Journal of the European Communities 14. 9. 98 As of January 1998 Characteristic United States Canada Japan EU Cotton tolerance to sulphonyl tolerance to glyphosate Du Pont de Nemours Monsanto tolerance to bromoxinyl Calgene resistance to lepidoptera Monsanto Pumpkin resistance to a virus Upjohn (3 viruses) Asgrow (2 viruses) Papaya Tobacco Chicory resistance to (Papaya Ringspot Virus) virus PRV Cornell U tolerance to bromoxinyl male sterility + tolerance to glufosinateammonium Apart from the major countries mentioned in the above table, transgenic soya is being grown in Argentina and Brazil, together with transgenic cotton in Argentina and Australia, and corn borer resistant maize in Argentina. This list is not exhaustive and is changing every month. It should be pointed out that the area which may be under cultivation in China is unknown, but could be considerable. 3. 3. Expected benefits 3. 3. 1. In addition to those varieties currently on the market which have been improved by genetic engineering — some dozen food or commercial crops — enormous research-based progress may be expected imminently in this area, although most applications are still (June 1998) at the experimental stage. The potential improve- ments are very considerable, particularly for food crops in southern countries, where the contribution of GMOs will, quite simply, be vital. Nevertheless, biotechnology — just like any other plant improvement technique — can never represent a miracle cure for all ills. Huge improvements may be expected, but it would be danger- ous to view them as a panacea. Mention should also be made of the expected development of GMOs in the area of non-food products. These represent a valuable source of diversification for agriculture. 3. 3. 1. 1. improvements, yields, product quality) agricultural For production (technical SEITA (F) Bejo Zeden BV (NL) of farming on the environment. They also entail risks for farmers due to their dependence on companies, when the latter are in an oligopolistic position and require farmers to buy both transgenic seeds AND the herbicide in question (see point 3. 4. 5). — The advantages lie in ease of weed control. This can be accomplished with a single, generally recent and selective product, which is consequently of low persistence and is relatively harmless to the environ- ment. Repeated treatment is unnecessary: ‘insurance’ treatments in particular can be avoided. Gains in terms of cost, time and pollution reduction are therefore considerable. Difficulties may arise in destroying regrowth of tolerant plants in subsequent seasons. B. resistance to diseases (attacks of viral, bacterial and fungal origin) — the advantages of plants acquiring resistance to disease (by means of transgenesis) are clear: in particular, conventional means of combating bac- teria and viruses are rare: indeed some cannot be combated. In nearly all cases, the inherent resistance of the plant means that no treatment is necessary, and the impact on yields is substantially greater than that obtained with treatment. Clear gains are therefore made in this area in terms of time, simplification of technical procedures and costs, provided that transgenic seed is not marketed at a prohibitive cost. A. tolerance to herbicides C. resistance to insects and other pests — The most advanced applications are in this sphere, and are very encouraging in terms of agricultural production, limiting production costs and the impact — in the instance of transgenic maize resistant to corn borers, the gene encoding a toxin causing the death of the attacking insect, generally derived from a 14. 9. 98 EN Official Journal of the European Communities C 284/43 bacterium (Bacillus thuringiensis), is incorporated into the plant’s genome by genetic engineering. The plant therefore becomes more resistant to the insect, and insecticide treatment is no longer necessary. Yields would be boosted significantly (by approxi- mately 10 %), in comparison with crops treated with a pesticide. There may however be a risk of secondary fauna being affected by these toxins. Research needs to be carried out over a period of time. D. resistance to difficult soil or climatic conditions: drought, salinity, etc. (Nordic countries, drought regions, developing countries). — This facilitates adaptation by plants to less favour- to environments and could offer hope able developing countries. References are still mostly experimental. Results E. (appreciable) improvement and greater regularity of yields; F. control of production costs and economic margins. 3. 3. 1. 2. For the environment: more environment- friendly procedures G. lower level of fertilizer inputs due to improved plant assimilation H. reduction or possible halt to insecticide and other pesticide applications for the crops in question I. use of non-selective ‘broad-spectrum’ herbicides which are rapidly degradable, reduction in the number of treatments. 3. 3. 1. 3. For food product quality J. enhanced product flavour K. vitamin or protein content, better balance between saturated and unsaturated fatty acids and between different amino-acids, greater content of oil or certain valuable compounds L. length and quality of conservation (tomato, melon) M. digestibility and elimination of allergenic com- pounds. 3. 3. 1. 4. For product adjustment to new market require- ments New opportunities for the production of highly specific compounds N. vaccines O. antibiotics P. human factors highly valuable to medicine (haemo- globin, insulin, the factor VIII which is essential in treating haemophiliacs, growth hormone; for example, it is possible to induce the tobacco plant to produce a pancreatic lipase which is highly valuable in treatment of serious diseases) Q. processing aid microorganisms (yeasts, fermenting agents), enzymes; e. g. producing goats’ cheese using chymosims of vegetable origin enables vegetarians to eat cheese; R. products used in the agrifoodstuff industry (flavour- ings, additives), GMO response to increasing market segmentation, use of the niches thereby created. For 3. 3. 1. 5. food self-sufficiency of developing countries, etc. definitely encouraging in theory — in practice, considerably less promising, and dependent on the public sector research effort. S. GMO development costs are high for seed compa- nies; they are therefore not prepared in the short term to develop products whose rapid payback on prime markets is not guaranteed. With the notable exception of sweet potato, it is unlikely that GMOs emerging from private sector research concern food crops relevant to developing countries; public sector national or international agricultural research centr- es could fill this important gap. The International Rice Research Institute (IRRI), for example, is currently making the final preparations for trans- genic rice varieties whose full importance is reflected in the fact that rice is the world’s leading crop, and an essential foodstuff. ORSTOM (French Institute of Scientific Research for Development Cooperation) is presently working with ILTAB (United States) to finalize manioc varieties improved by genetic engineering. 3. 3. 1. 5. 1. Be that as it may, GMOs represent one of the only ways of enabling developing countries to achieve food self-sufficiency, with world food demand set to double in the coming decades and little opportunity existing to extend the amount of land under cultivation the developing around the world. is, however, It C 284/44 EN Official Journal of the European Communities 14. 9. 98 countries — where farm land is least available and is, indeed, shrinking — who are generating this increase in demand. 3. 3. 1. 6. Advantage of molecular engineering over conventional genetic improvement 3. 3. 1. 6. 1. By its nature, molecular engineering enables the transfer gene to be isolated, whereas conventional genetic improvement relies on crossing the entire genome of the improving organism with that of the crop variety to be improved. In this case, successive back-crossings with the target parent is necessary to restore its agro- nomic characteristics to the full. This leads to a waste of several years and high costs, for a partial result only. Genetic engineering allows highly-targeted improve- ment of plant characteristics. It also allows more accurately targeted risk prediction. 3. 4. Possible or probable risks arising from the use of GMOs Cross-breeding with nearby 3. 4. 1. adventitious plants, conferring herbicide or antibiotic resistance: this risk is only likely with allogamous plants when closely related species are among adventitious plants present in the crop region. Only research on colza has currently revealed any real possibility of crossing with a nearby adventitious plant — wild radish — which could lead to treatment difficulties if wild radish acquired resistance to colza herbicide by this natural cross-fertilization. The possibility always remains in this case of destroying resistant wild radish using other herbicides. Such a risk can practically be ruled out with straw cereal crops, which are exclusively autogamous, and with maize (an imported plant with no close relations in our part of the world). There is a further risk, in particular with strongly allogamous maize, of contaminating neighbouring fields by transmitting the transgenically acquired characteristic — this is not necessarily harmful but would be unintend- ed and unwanted by neighbouring farmers. Particular difficulties could arise where neighbouring crops must meet precise specifications (quality or organic pro- duction labels, for example). 3. 4. 2. H u m a n h e a l t h r i s k s U. risk of allergies: for example, transferring genes from groundnuts or Brazil nuts to plants which are in principle non-allergenic could trigger allergies in persons unable to tolerate these foodstuffs; all these problems were detected far upstream during the multiple and rigorous experimental phases, which are a precondition for authorization. No product presenting such drawbacks has, of course, been marketed. V. transfer of antibiotic resistance to bacteria found on man. According to GMO production companies, in the near future it will be possible to dispense with the marker characteristic provided by the gene for antibiotic resistance to distinguish those plants on which transgenesis has been successful, during the process of creating the variety (the agronomic characteristic to be transferred to the host plant is not necessarily an efficient marker). This risk, the real size of has not been demonstrated, should therefore soon be eliminated. 3. 4. 2. 1. According to the specialists consulted, these risks are real, at least theoretically, but the media have exaggerated their importance by focusing on them in recent months and presenting potential problems detected prior to authorization as problems arising on the market itself. 3. 4. 3. I n c r e a s i n g u n i f o r m i z a t i o n o f a g r o - e c o s y s t e m t h e Although in preparing their new varieties, 3. 4. 3. 1. seed producers call upon a wide range of preserved genes for each plant grown, the use by farmers of a small number of varieties, particularly transgenic ones, would further limit the already low level of diversity in the genetic pool of plant populations in areas under cultivation. The adaptability of cultivated in the event of attack by pests or mutant adventitious plants would then be seriously reduced. 3. 4. 4. D e p e n d e n c e o f f a r m e r s o n p l a n t h e a l t h a n d s e e d m u l t i n a t i o n a l s 3. 4. 4. 1. Since most seed companies around the world have been bought by multinational plant health com- panies, the current picture is one of the same firm obliging farmers to buy both herbicide-resistant seeds AND the herbicide in question. In the US, contracts exist under which farmers earmark part of their production for the company in question, which are highly restrictive for farmers. This practice may spread, furthering reinforcing the small number of all-powerful plant health product multinationals. 3. 4. 5. A t w o - f o l d n e e d : n i z e d a n d c r e d i b l e m a r k e t e d G M O s u p s t r e a m o f m a r k e t ; s u b s e q u e n t r i n g ’ o f p r o d u c t s s t r i c t , h a r m o - c o n t r o l s o n t h e ‘ b i o m o n i t o - 3. 4. 5. 1. This need is acknowledged by all those concerned with GMOs. It is the only way of giving consumers the confidence which is necessary if they are 14. 9. 98 EN Official Journal of the European Communities C 284/45 to accept these products. According to recent FAO and OECD recommendations, controls must, as a minimum, apply to: — differences between GMOs and ‘conventional’ prod- ucts in terms of nutritional make-up (differences which might, amongst other things, clash with religious or cultural obligations); — absence of allergens; — total product non-toxicity, which must be guaran- teed by controls. 3. 5. European rules on GMOs and labelling (see Appendix I) 3. 5. 1. Consumer confidence must be strengthened by labelling which matches the information required for product marketing, as stipulated in Articles 14 et seq of Directive 90/220/EEC. 3. 6. Consumer protection and information 3. 6. 1. Consumers, who are the final destination of GMO products, must have a dual channel of infor- mation: firstly, information issued by the competent bodies, at both EU and Member State level, in accordance with their powers to authorize the marketing of such products and, secondly, the necessary data which must appear on product labels, in order to avoid a negative system resulting in confusion on the market, particularly with regard to combinations of GMO and naturally grown products. 3. 7. Assessment of current GMO access to the Euro- pean market today: separation and labelling prob- lems 3. 7. 1. It is certain that an undetermined proportion of US soya and maize imported into the European Union today is made up of GMOs. The US, however, does not separate GMO and non-GMO grains. Under these conditions, clear and unambiguous product labelling (‘contains’/‘does not contain’ GMOs) — even if an agreement were to be reached at European level (see point 3. 5) — would in practice be impossible for imported produce. There is a fundamental divergence between public opinion in Europe and in the US. American consumers are entirely unconcerned about consuming transgenic products. 3. 8. Need for international harmonization of GMO experimentation and authorization conditions The conditions under which research is sup- 3. 8. 1. ported, and administrative requirements for GMO authorization and experimentation, appear considerably less favourable in the EU than in its main competitors, the US and Japan. Harmonization should be sought at international level to prevent distortions of competition putting the EU even further back in research terms. Possible acceleration of procedures must not of course under any circumstances jeopardize authorization credi- bility. The ESC calls upon the Commission to ensure that the WTO recognizes the need for GMOs to be authorized. 3. 9. Possible consequences of expanding the use of GMOs on the CAP, which is currently being reformed (Agenda 2000 proposals) 3. 9. 1. The rules governing the Common Agricultural Policy are currently the object of reform proposals by the Commission, as set out in the Agenda 2000 document. Without wishing, at this early stage, to prejudge the outcome of these proposals over coming months and pending the adoption of any regulations by the Council, it is noted that the proposals tend generally towards a reduction in support prices and some de-linking of direct aid and production. They would lead to an alteration in the nature and objective of the CAP, moving away from market guidance towards income support. They also aim to forge a closer connection between support and the achievement of environmental objectives. The development of GMOs does not in principle appear to contradict these aims. At this stage, we can only look at the possible links between the development of GMOs and each of the six new CAP objectives proposed by the Commission for after the year 2000: — Improving the competitiveness of European farm produce: increased use of GMOs would appear to help largely achieve this objective where plant crops are concerned. GMOs would allow losses due to pests and diseases to be limited (leading to increased yields) and should contribute to lowering production costs, if GMO prices come down (fewer treatments required). — GMOs will also help improve product quality (richer in valuable compounds, enhanced flavour, better preservation, etc. ). Product quality, particularly for European farm and food products, is a decisive factor in their competitiveness. Competitiveness is not, it should be remembered, simply a matter of price. — Safety and quality of agri-food products: if biotech- nologies are used sensibly and in full accordance with the precautionary principle, they can make a positive contribution to achieving this objective, C 284/46 EN Official Journal of the European Communities 14. 9. 98 since they permit higher quality foodstuffs to be produced. GMO safety and consumer information guarantees must be applied with the utmost rigour. — Integration of environmental goals into the CAP: transgenic crops need fewer plant-health treatments and can therefore make a substantial contribution to a healthier interaction between farming and the environment. However, the potential risks of spreading characteristics through the environment must be studied with the greatest care before any authorization is granted to market GMOs, and biomonitoring must continue after authorization. genetically-introduced — Stabilization of farm income: insofar as, in the Commission proposal, the proceeds of sale of prod- uce account for a falling share of income compared with direct support, the impact of more regular yields is lessened. However, the development of GMOs would still have a positive influence on income stabilization, by reducing crop-related uncer- tainties. — Source of supplementary income and employment in agriculture: GMOs can contribute to this aim by the improvements they can bring to the ever-growing range of dietary and non-food applications for energy or medical purposes. 3. 10. Social effect of producing GMOs An initial estimate, based on econometric 3. 10. 1. studies (1), suggests that growing GMOs will increase farm employment, on account of the increase in land under cultivation and, above all, the positive impact of obtaining a large quantity of value-added products such as medicines, additives, perfumes, etc. , as well as new fuels or biodegradable plastics. 3. 10. 2. Despite the highly positive attitude of the European authorities regarding increased employment through GMO production, a number of clarifications need to be made. Firstly, there are differences in national attitudes, meaning that production will not be uniform throughout the EU; and secondly, the lack of dedicated research, combined with the slowness of authorization and patent procedures for discoveries, could delay production and result in seed prices having a negative effect. (1) Carried out by the Science Policy Research Unit, University of Sussex, UK, and presented at EuropaBio 97, Amsterdam. 3. 10. 3. As part of the broad debate generated by Agenda 2000 on farm policy, the ESC must not lose sight of the need to investigate whether GMO crops might represent a remedy for employment losses, as expected from certain COM reforms. 4. Conclusion: if GMOs are to be acceptable, there is a need for more, and transparent, communication GMOs are necessary for the development of 4. 1. European agriculture. 4. 1. 1. The above assessment indicates that GMOs are one among a range of indispensable factors for the development of European agriculture over the coming years. The expected gains in terms of guaranteed yield levels, the environment, lower costs and product quality, together with diversification into non-food applications, represent an asset which European agriculture cannot afford to go without. GMOs are one tool amongst others, not a panacea, but are nevertheless essential. Authorization trials should be rigorous but not 4. 2. unduly obstructive. 4. 2. 1. In view of the presently imperfect knowledge of the potential negative effects of GMOs on the environment and public health, and the absolute need to apply the precautionary principle to this question, pre-authorization trials must continue to be carried out with the utmost rigour. Harmonization of international rules in this sphere should however be pursued in order to avoid the distortions of competition which would arise if one country applied stricter and more restrictive rules than others. Harmonization should be up to the highest common denominator, since public health is at stake. Product performance monitoring must be carried 4. 3. out by a biomonitoring organization. 4. 3. 1. As the long-term effects of the spread of GMOs are inherently unknowable at present, it would appear necessary to monitor approved products by regular checks over a period of time. Such checks would not relate to any major faults which must of course be detected before release for marketing and would prevent authorization. Their aim would be to guard against minor but undesirable effects of products emerging with time. This supervision is proposed by national labelling bodies under the title of ‘biomonitoring’. 14. 9. 98 EN Official Journal of the European Communities C 284/47 4. 4. Full and transparent communication is a sine qua non for the restoration of European consumer confidence. Labelling and the separation of distribution 4. 5. chains lie at the heart of the debate. 4. 4. 1. GMOs have been coming onto the market for several years. It is however clear that farmers and final consumers in Europe are reluctant and have voiced fears about these products in the absence of the necessary thoroughness and transparency in communicating their advantages and potential risks. Full, clear and completely transparent information — on the potential disadvan- tages too — would certainly increase consumer accept- ance of GMOs. At present, consumers have the feeling that they are not being properly informed, and this fuels their legitimate fear of being misled. 4. 5. 1. At both EU and Member State level, the various actors of civil society (administrations, politicians, farmers, consumers and GMO producers) are currently engaged in a debate on how to label products. The Commission’s proposal that products be labelled ‘con- tains GMOs’ or ‘may contain GMOs’ is unacceptable and has not met with the Council’s support. Moreover, on 26 May 1988 the Council adopted a regulation abolishing the ‘may contain GMOs’ option for processed products. The debate also concerns the necessary sepa- ration of GMO and non-GMO distribution chains, the only way of allowing satisfactory labelling. Brussels, 1 July 1998. The President of the Economic and Social Committee Tom JENKINS APPENDIX to the opinion of the Economic and Social Committee GMOs — Current state of Community legislation — On 23 July 1997 the Commission presented its general guidelines on the labelling of products derived from GMOs. These guidelines aim to provide consumers with coherent information, by creating a framework for planned legislation in this field. — Community legislation on GMOs comprises four legal bases, some of which have been or are currently being amended, covering the following fields: • the contained use of genetically modified micro-organisms; • horizontal legislation, deliberate release of genetically modified organisms into the environment: ‘living’ GMOs; • sectoral legislation: new foodstuffs (novel foods regulation of 15 May 1997), animal feed (in preparation), seeds (in preparation), pesticides (under examination); • a specific regulation on genetically modified maize and soya. — Lastly, it should be pointed out that product safety and labelling are two separate aspects of regulation. Labelling cannot substitute proper safety assessment (risk analysis) prior to each marketing authorization. Guidelines for a Community labelling system On 23 July 1997 the Commission put forward general guidelines for labelling GMOs, whether ‘living’ GMOs, processed GMOs or products based on them, whether of Community origin or otherwise. These guidelines will provide a framework for proposals for new legislation or amendments to existing legislation: C 284/48 EN Official Journal of the European Communities 14. 9. 98 — the guidelines are based on the following principles: • science-based labelling, throughout the food chain; • labelling aimed to provide consumers with clear, honest and neutral information on the genetically modified origin of products; • labelling in accordance with the European Union’s international obligations. — the guidelines propose three categories of label: • ‘contains material of GMO origin’: mandatory labelling for products which can be proven to consist of, contain or be derived from GMOs; • ‘does not contain material of GMO origin’: voluntary labelling for products not containing GMO or derived substances; • ‘may contain material of GMO origin’: mandatory labelling of products where the presence of GMO cannot be excluded (as in cases of mixing). With regard to the principle of voluntary labelling for non-GMO products (‘does not contain material of GMO origin’ formula), the Commission is currently considering a framework for Community certification and labelling. Contained use of genetically modified micro-organisms Council Directive 90/219/EEC, adopted on 23 April 1990, is the basic Community text on the contained use of genetically modified micro-organisms. The rules set out in the directive are highly technical and only concern the use or handling of genetically modified micro-organisms within research centres or laboratories. Its content is therefore not analysed in this document. It should nevertheless be noted that on 6 December 1996 the Commission proposed to amend this directive to bring it into line with technical progress and new knowledge in the area of risks. Horizontal legislation: deliberate release into the environment of genetically modified organisms (‘living’ GMOs) — Scope Council Directive 90/220/EEC of 23 April 1990 represents a horizontal type Community legislative framework, intended to guarantee market conditions as well as human health and environmental protection for ‘living’ OGMs (such as cereals). It does not apply to processed or derived products, but provides for the development of sectoral legislation (of the novel food type) to be adopted in line with technical progress. Directive 90/220/EEC does, however, apply to products not covered by sectoral legislation. — Labelling Initially, Directive 90/220/EEC was virtually silent on labelling. The Commission acted in two stages to remedy this situation: • to meet immediate needs, on 18 June 1997 the Commission adopted a directive (97/35/EC) amending an annex to Council Directive 90/220/EEC, introducing compulsory labelling if a product is composed of or contains GMOs. Indication of the ‘possibility that genetically modified organisms may be present’ is required in the case of products containing mixtures of GMOs and non-GMOs. Since this amendment to Directive 90/220/EEC is not retroactive, it does not cover the two products (soya and maize) notified before 18 June 1997. • to provide a more complete framework, on 26 November 1997 the Commission presented a proposal to amend Directive 90/220/EEC. The proposal aims to adjust the current directive in line with technical progress, to clarify its scope and to make up the shortcomings observed in implementation, concerning both authorization procedures for placing GMOs on the market and labelling rules. It lays down precise labelling measures incorporating the Commission’s guidelines adopted in July 1997. However, since the text is not yet available, the planned terms for the labelling and the detail of certain regulatory aspects remain unknown. The Commission was to present its proposal officially on 23 February. The proposal is then to be discussed with a view to adoption by the European Parliament and the Council (Environment Council meeting, 23 March 1998). 14. 9. 98 EN Official Journal of the European Communities C 284/49 Sectoral legislation: novel food, animal feed (in preparation), seeds (in preparation), pesticides (under examination) — Scope (novel foods) European Parliament and Council Regulation (EC) No 97/258 on novel foods, which came into force on 15 May 1997, concerns final products. It applies to novel foods and food ingredients, including those of genetic engineering. — Labelling (novel foods) The novel foods regulation is the first item of European legislation to have incorporated a specific labelling framework for biotechnology products. It establishes compulsory labelling and requires consumers to be informed of the differences between novel products and equivalent existing products. This regulation, which preceded the guidelines adopted by the Commission in July 1997, is not based on the three labelling categories proposed by the guidelines. — Animal feed, seeds and pesticides The Commission is to submit proposals, including labelling rules which tally with the guidelines adopted in July 1997, during the course of 1998. Labelling: the specific case of soya and maize One variety of genetically modified soya and of maize was authorized under the terms of Directive 90/220/EEC before it was amended on 18 June 1997, and before the novel food regulation came into force. It was therefore necessary to lay down labelling rules for these two varieties and products derived from them, which were not initially subject to compulsory labelling. The Commission negotiated the possibility of voluntary labelling for these two varieties with the producers in question. In contrast, in order to rectify the specific situation of products derived from the two varieties, and so as not to give rise to a contradiction between these products and those which in future will be authorized under Directive 90/220/EEC, as amended, and/or the novel food directive, the Commission has taken the following steps: • to meet immediate needs, on 19 September 1997 the Commission adopted Regulation (EC) No 1813/97 which, with effect from 1 November 1997, provides for labelling for products containing genetically modified soya or maize or derivatives, similar to that imposed by the novel food regulation. This ad hoc measure states that the detailed arrangements for labelling are to be specified at a later stage. • to provide a more complete framework, on 3 December 1997 the Commission submitted a proposal for a Commission regulation laying down labelling arrangements, on the basis of the novel food regulation and the July 1997 guidelines, for foodstuffs based on genetically modified soya or maize (i. e. processed products). In the proposal, the Commission proposes scientific criteria for labelling. The presence of modified DNA was selected as a criterion, since the Commission believes that it will enable a larger number of foodstuffs to be labelled than the modified protein criterion. However, where the DNA criterion is not decisive, a comparison will be carried out between the proteins of modified and of conventional products. The draft must be approved by a qualified majority of the Standing Committee on Foodstuffs in order to become a final regulation, replacing that of 19 September. However, differences of views between the Member States have rapidly emerged on the Standing Committee: only Austria, Germany, Denmark and Sweden have expressed support for the Commission text. The proposal’s most controversial point has proved to be the criterion selected by the Commission for detecting GMOs, i. e. the presence of modified DNA. Most other Member States consider that the detection of modified proteins alone should serve as the criterion for labelling. In the absence of a qualified majority opinion on the Standing Committee at its meeting of 15 January 1998, it fell to the Agriculture Council to decide on the matter. Following a number of examinations and consultations with the Commission, the latter finally backed the British Presidency’s counter-proposal, which enabled the Council to reach a decision on 26 May 1998 [Regulation (EC) No 1139/98 (1)]. The regulation specifies that it is modified DNA or modified proteins which will be subject to detection and will require labelling. (1) OJ L 159, 3. 6. 1998. C 284/50 EN Official Journal of the European Communities 14. 9. 98 In contrast to the Commission’s initial stance, based on its report of 23 July 1998, the regulation of 26 May 1998 abolishes the ‘may contain GMOs’ option. Moreover, it establishes a list of foodstuffs not subject to labelling (the list is initially empty, and will gradually be built up on the basis of opinions from the scientific committees) and in the preamble introduces the concept of a threshold for DNA or protein presence, below which labelling will not be necessary. No threshold value is set. Opinion of the Economic and Social Committee on the ‘Proposal for a Council Directive on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States’ (1) (98/C 284/09) On 30 March 1998 the Council decided to consult the Economic and Social Committee, under Article 100 of the Treaty establishing the European Economic Community, on the above-mentioned proposal. The Section for Economic, Financial and Monetary Questions, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 9 June 1998. The rapporteur was Mr Pelletier. At its 356th plenary session on 1 and 2 July 1998 (meeting of 1 July) the Economic and Social Committee adopted the following opinion by 136 votes to seven, with four abstentions. 1. Introduction 1. 1. The ESC welcomes the Commission’s move to rectify a tax discrepancy which is an obstacle to completion of an integrated single market. Abolition of the withholding tax levied by some 1. 2. Member States on interest and royalties has long been recognized as being of major importance for a Community-wide market. 1. 3. The Commission’s first initiative in this direction dates back to 20 April 1990. In 1992 the Ruding report — broadly approved by the ESC (2) — prioritized this reform. Unfortunately the Commission, in the absence of consensus within the Council, decided in 1994 to withdraw its proposal. Eventually, in December 1997, the Ecofin Council gave the Commission the go-ahead to draw up the proposal on which the ESC is now consulted. displayed concerning the plan — approved by the Council and referred to in the explanatory memorandum — for a directive ‘to ensure minimum effective taxation of income from savings’ while bearing in mind the need to preserve the competitiveness of European financial markets at international level, which presupposes exten- sion to non-EU countries and to the Member States’ dependent or associated territories (3). 1. 5. The purpose of the draft directive is to exempt interest and royalty payments made by a company of one Member State to an associated company (in which the first company has directly or indirectly a minimum holding of 25 %) of another Member State from any withholding tax in the Member State from which the payments are made. Hence tax on revenue deriving from such payments shall be levied solely by the Member State in which the beneficial owner is located. 2. Financial justification for the draft directive 1. 4. The ESC acclaims the Commission’s persistence, not to say obstinacy. The same persistence should be 2. 1. From the financial angle, the aim is to avoid double taxation — which is undesirable per se — or, at (1) OJ C 123, 22. 4. 1998, p. 9. (2) ESC opinion of 24. 11. 1992; OJ C 19, 25. 1. 1993, p. 65. (3) Conclusions of the Ecofin Council meeting on 1. 12. 1997 regarding fiscal policy (OJ C 2, 6. 1. 1998)