MIL-OSI Europe: REPORT on discharge in respect of the implementation of the budget of the European Chemicals Agency for the financial year 2022 – A9-0135/2024

2. PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the closure of the accounts of the European Chemicals Agency for the financial year 2022

(2023/2148(DEC))

The European Parliament,

– having regard to the final annual accounts of the European Chemicals Agency for the financial year 2022,

– having regard to the Court of Auditors’ annual report on EU agencies for the financial year 2022, together with the agencies’ replies[6],

– having regard to the statement of assurance[7] as to the reliability of the accounts and the legality and regularity of the underlying transactions provided by the Court of Auditors for the financial year 2022, pursuant to Article 287 of the Treaty on the Functioning of the European Union,

– having regard to the Council’s recommendation of 22 February 2024 on discharge to be given to the Agency in respect of the implementation of the budget for the financial year 2022 (00000/2024 – C9‑0267/2024),

– having regard to Article 319 of the Treaty on the Functioning of the European Union,

– having regard to Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012[8], and in particular Article 70 thereof,

– having regard to Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), establishing a European Chemicals Agency, amending Directive 1999/45/EC and repealing Council Regulation (EEC) No 793/93 and Commission Regulation (EC) No 1488/94 as well as Council Directive 76/769/EEC and Commission Directives 91/155/EEC, 93/67/EEC, 93/105/EC and 2000/21/EC[9], and in particular Article 97 thereof,

– having regard to Commission Delegated Regulation (EU) 2019/715 of 18 December 2018 on the framework financial regulation for the bodies set up under the TFEU and Euratom Treaty and referred to in Article 70 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council[10], and in particular Article 105 thereof,

– having regard to Rule 100 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on the Environment, Public Health and Food Safety,

– having regard to the report of the Committee on Budgetary Control (A9-0135/2024),

1. Approves the closure of the accounts of the European Chemicals Agency for the financial year 2022;

2. Instructs its President to forward this decision to the Executive Director of the European Chemicals Agency, the Council, the Commission and the Court of Auditors, and to arrange for its publication in the Official Journal of the European Union (L series).

3. MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

with observations forming an integral part of the decision on discharge in respect of the implementation of the budget of the European Chemicals Agency for the financial year 2022

(2023/2148(DEC))

The European Parliament,

– having regard to its decision on discharge in respect of the implementation of the budget of the European Chemicals Agency for the financial year 2022,

– having regard to Rule 100 of and Annex V to its Rules of Procedure,

– having regard to the opinion of the Committee on the Environment, Public Health and Food Safety,

– having regard to the report of the Committee on Budgetary Control (A9-0135/2024),

A. whereas, according to its statement of revenue and expenditure[11], the final budget of the European Chemicals Agency (the ‘Agency’) for the financial year 2022 was EUR 114 777 691 representing an increase of 5,83 % compared to 2021; whereas the budget of the Agency is funded from mainly two sources of revenue, namely, collected fees and the contribution from the general budget of the Union;

B. whereas the Court of Auditors (the ‘Court’) in its report on the annual accounts of the Agency for the financial year 2022 (the ‘Court’s report’), states that it has obtained reasonable assurance that the Agency’s annual accounts are reliable and that the underlying transactions are legal and regular;

C. whereas with regard to the Agency’s procurement sector, no issues requiring corrective actions were reported for 2022, nor are there ongoing or outstanding corrective actions from previous years’ audits and assessments;

D. whereas with regard to the Agency’s internal control systems, no issues requiring corrective actions were reported for 2022, nor are there ongoing or outstanding corrective actions from previous years’ audits and assessments;

Budget and financial management

1. Notes with satisfaction that budget monitoring efforts during the financial year 2022 resulted in a budget implementation rate of current year commitment appropriations of 98,61 %, representing a slight decrease of 0,23 % compared to 2021 and that the current year payment appropriations execution rate was 85,06 %, representing a decrease of 1,17 % in comparison to 2021;

2. Recalls that the Agency is financed through fees paid by industry and by an EU balancing contribution, in accordance with Regulation (EC) No 1907/2006[12] of the European Parliament and of the Council, Regulation (EC) No 1272/2008 of the European parliament and of the Council[13] and Regulation (EU) No 528/2012 of the European Parliament and of the Council[14]; highlights the fact that, due to the one-off nature of the fees and their dependence on strategic decisions of the chemical industry players, there is high uncertainty as to their amount and timing; recalls that the Commission promised a proposal to strengthen the governance of the Agency and increase the sustainability of its financing model in 2020; insists that the Commission should present it immediately;

3. Notes with satisfaction that in 2022, for the first time since the final registration deadline under Regulation (EC) No 1907/2006 in 2018, the Agency’s fee income has increased, while reliance on the Union to finance its operations has slightly decreased;

Performance

4. Observes that the Agency is the driving force in implementing the Union’s chemicals legislation for the benefit of public health and the environment, as well as for innovation and competitiveness; notes that the Agency collects, evaluates and disseminates information on chemicals, helps companies comply with legislation and promotes the safe use of chemicals;

5. Notes that the Agency implemented 93 % of the Work Programme and achieved 151 of the 162 specific actions and outputs planned for 2022, with 8 actions still ‘in progress’ as planned; notes furthermore that the three “not completed” actions would either have required a contribution from Member States or the work-stream being de-prioritized;

6. Notes that the Agency focused on delivering its core tasks and on supporting the European Commission to implement its Chemicals Strategy for Sustainability in line with the direction set out by the Management Board in the Strategic Plan 2019-2023 and in its review conducted in 2021;

7. Draws attention to some of the challenges the Agency faced in 2022, including an inefficient authorisation system, identified in 2021, with a growing number of applications for hexavalent chromium set to continue into 2023, straining the opinion-making capacity of scientific committees, and a lack of experienced members; notes furthermore that a low number of draft assessment reports for biocidal active substances was submitted by Member States, which hinders the completion of evaluations by the end of 2024 as mandated by Regulation (EU) No 528/2012 highlights the fact that, in line with the Active Substances Action Plan, the Agency has made efforts over recent years to support the Member States to make further progress;

8. Welcomes the Agency’s activities for promoting alternatives to animal testing and the steps taken to increase the effectiveness and visibility of this work;

Efficiency and gains

9. Commends the Agency for its strategy for efficiency gains, which seeks to achieve added value through performance-based governance, and for the development of the new tools to support planning and reporting, which are more user-friendly, provide better reporting capabilities and save time for all of its staff; notes that the reporting dimensions have been revised to better reflect the Agency’s Work Programme and allow better linking of the Agency-level objectives and those of individual staff members;

10. Notes that in 2022 the Agency also started an infrastructure capacity optimisation exercise to minimise any excess capacity in the IT infrastructure and that the results from the second half of the year show that the Agency was able to reduce the usage of such infrastructure (both CPU i.e. processors and RAM i.e. memory) by roughly 25 %; welcomes the efforts made in the optimisation exercise and encourages the Agency to continue its efforts in this regard;

11. Observes that the Agency continues to share its internal audit capability with the EU Agency for the Space Programme (formerly the European Global Navigation Satellite Systems Agency); notes that the Agency and the European Food Safety Authority maintain regular contacts at working and senior management level, where cooperation opportunities are routinely assessed (by conducting a detailed review of the work programmes) and exploited;

12. Notes furthermore that the Agency continued its strategic cooperation with the European Food Safety Authority on providing the data format IUCLID as a service, delivered from its Cloud Services, for the European Food Safety Authority’s work under Regulation (EC) No 1107/2009 of the European Parliament and of the Council[15] and, as a result, economies of scale were achieved by building on existing IT platforms;

13. Recalls the importance of increasing the digitalisation of the Agency in terms of internal operation and management but also in order to speed up the digitalisation of procedures; stresses the need for the Agency to continue to be proactive in this regard in order to avoid a digital gap between the agencies; draws attention, however, to the need to take all the necessary security measures to avoid any risk to the online security of the information processed; insists on the need to step up action against cyberattacks or infiltration attempts particularly those originating from Russia or China;

14. Welcomes the fact that the Agency, in cooperation with the European Food Safety Authority, has taken steps to promote the ‘one substance – one assessment’ principle to ensure greater consistency in the hazard and risk assessment of active substances;

Staff policy

15. Notes that, on 31 December 2022, the establishment plan was 98,07 % executed, with 458 temporary agents appointed out of 467 temporary agents authorised under the Union budget (same number of authorised posts as in 2021); notes that in addition 128 contract agents, 48 interims, five consultants and 2 seconded national experts worked for the Agency in 2022;

16. Recalls the importance of ensuring staff gender balance and welcomes in this regard the fact that the Agency has put into effect an action plan to implement the objectives of its Charter on Diversity and Inclusion adopted in 2022, aiming to achieve gender balance in the management team, among other inclusion measures; asks the Agency to report to the discharge authority about the implementation of its action plan; acknowledges that achieving results in this area takes time; notes, however, that the gender balance within the Agency’s senior and middle management has slightly decreased with 76 % positions occupied by men (82 % in 2021) and 24 % by women (18 % in 2021); notes that gender balance in the staff overall is 261 men (45 %) and 317 women (55 %);

17. Notes with satisfaction that, as of 31 December 2022, the Agency employed staff from 26 Member States; notes that 32 % of its staff are nationals of the Member State where the Agency is located; recalls the importance of geographical balance and encourages the Agency to continue to take the necessary measures to have a balanced and fair geographical representation; is, however, concerned about the geographical balance within the Agency’s senior and middle management having only one director from Central-Eastern Europe; insists that improvements have to be made; asks the Agency to report back on this to the discharge authority;

18. Notes that the Agency has a policy on protecting the dignity of the person and preventing psychological and sexual harassment, and that the Agency is part of the interagency task force of confidential counsellors; looks forward to receiving their report and recommendations; notes that there were no reported cases of harassment in 2022 and encourages the Agency to continue and develop the work to prevent cases in the future as well;

19. Notes that, as of March 2022, the Agency’s staff started to return gradually to the Agency’s premises, ending with the implementation of new hybrid working rules in October 2022; notes in this context that the new rules promote flexibility and staff empowerment while maintaining social cohesion and collaboration through regular weekly presence at the office;

20. Observes that the Agency made use of more internal mobility to respond to the evolving needs for scientific, technical and administrative expertise in its work; notes that this offered career enhancement opportunities and thereby contributed to motivating the Agency’s staff and maintaining a culture of high performance, continuous improvement and responsiveness; welcomes the fact that, to motivate employees and build skill sets, it also introduced new initiatives including mentoring and coaching;

21. Underlines the necessity of ensuring adequate staffing reflecting the needs of the European Green Deal and the Union Chemical Strategy for Sustainability, Circular Economy Action Plan and, in particular, the zero pollution target and the associated increase in tasks;

Prevention and management of conflicts of interest and transparency

22. Notes that, based on a thorough risk assessment of its activities, the Agency has identified the processes and sub-processes that require conflicts of interest to be managed; notes furthermore that in all of those processes, a review of the annual declarations of interest is performed by the process owner each time a task is assigned to a staff member, while for some sensitive processes this is complemented with a case-specific declaration of no interest by the member of staff;

23. Welcomes the fact that, to improve post-employment conflict of interest practice, the Agency’s conflict of interest policy was last revised by the Management Board in June 2023; notes that the changes introduced strengthen the systematic monitoring of compliance with post-employment duties by former Agency staff members, in line with the recommendations of the European Court of Auditors and observations of the discharge authority in previous years;

24. Observes that the Agency publishes on its website the meetings held by its senior management with interest group representatives;

25. Welcomes the fact that, during 2022, the Agency introduced a new electronic tool for collecting and reviewing the annual declarations of interest of the external experts contributing to the Agency’s work, providing further assurance to the process;

26. Notes with satisfaction that the Agency’s Anti-Fraud Strategy was last revised by its Management Board in December 2022 and focuses on maintaining and further developing the anti-fraud culture in the Agency and regularly reviewing key policies and procedures; notes that the strategy strengthens the internal anti-corruption mechanism by specifying the roles and responsibilities for fraud prevention and the means and resources which are engaged in tackling fraud; welcomes the fact that all the Agency’s staff participated in anti-fraud training in 2022; notes with satisfaction that the Agency has guidelines in place for whistleblowers so that the Agency’s employees can provide notification of any activity which goes against the public interest;

27. Recalls that the decision-making processes of the Agency are designed to be clear, open and to ensure a balanced outcome based on a reasoned scientific approach; notes that information on the intentions of the Agency and the Member States, for example, to look into substances or create dossiers is available online, so companies have access to the data they need to make informed business decisions; notes furthermore that accredited stakeholder organisations may participate in scientific meetings as observers, except where confidential business information requires sessions to be closed; notes, furthermore, that the reflections, opinions and conclusions of the Agency’s scientific committees are recorded in opinions and minutes and these are published online;

28. Recalls the importance for the Agency of developing greater visibility in the media, internet and social media, in order to make its work known to the citizens;

Other comments

29. Welcomes the fact that in 2022 the Agency adopted a cybersecurity policy and performed an IT-wide risk assessment exercise; notes, furthermore, that the Agency has introduced the possibility of biometric authentication, improved the visibility of the security operations centre and has conducted failover testing between datacentres;

30. Notes with satisfaction that in 2022 the Agency joined PPMT (the European Commission’s Public Procurement Management Tool) trial phase in order to test this e-procurement tool (before its complete onboarding in 2023); notes that the Agency had already onboarded other e-procurement tools such as eTendering or eSubmission and in parallel, it renewed in 2022 its subscription to Cloudia – the e-procurement platform of Hansel (central purchasing body for Finnish public authorities) so that all administrative procurement carried out through Hansel is fully digitalised;

31. Observes that the Agency’s Eco-Management and Audit Scheme (EMAS) and ISO 14001 certificates were successfully renewed in 2022; notes with satisfaction from the Court’s report that the Agency is among the agencies that issue an annual environmental statement;

32. Highlights the fact that the Agency has continued its efforts to phase out animal testing in Europe to the extent possible under the current regulatory framework; notes that the Agency promotes alternatives to animal testing in three ways: focusing on groups of substances through a separate strategy, investing in international activities that promote alternatives and new approach methodologies, and making the data the Agency holds available; reiterates its call on the Agency to speed up the phasing out process; notes in addition that the Agency is collaborating with the Commission and other stakeholders to support the Commission in developing a roadmap towards the full replacement of animal testing for chemicals;

33. Welcomes the fact that the Agency has continued to implement different measures to increase its public and online presence through new releases and numerous updates on its website, the launch of a joint Instagram channel with four agencies called ‘One Health One Environment’, and its presence in social media; notes in this context a growth of the general media coverage and an increase in the Agency’s social media metrics in 2022 compared to 2021;

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34. Refers, for other observations of a cross-cutting nature accompanying its decision on discharge, to its resolution of …[16] on the performance, financial management and control of the agencies.

OPINION OF THE COMMITTEE ON THE ENVIRONMENT, PUBLIC HEALTH AND FOOD SAFETY (12.2.2024)

for the Committee on Budgetary Control

on discharge in respect of the implementation of the general budget of the European Chemicals Agency for the financial year 2022

(2023/2148(DEC))

Rapporteur for opinion: Pascal Canfin

SUGGESTIONS

The Committee on the Environment, Public Health and Food Safety calls on the Committee on Budgetary Control, as the committee responsible, to incorporate the following suggestions into its proposal for a decision:

1. Observes that the European Chemicals Agency (‘the Agency’) is the driving force in implementing the Union’s chemicals legislation for the benefit of public health and the environment, as well as for innovation and competitiveness; notes that the Agency collects, evaluates and disseminates information on chemicals, helps companies comply with legislation and promotes the safe use of chemicals;

2. Notes that the Agency’s final budget for 2022 was EUR 116 981 740, representing an increase of 5,3% compared to 2021; notes that budget monitoring efforts during 2022 resulted in a commitment appropriation execution rate of 98,6%, and a payment appropriations’ execution rate of 85,1%; notes that the implementation of the budget, while keeping the strict segregation between several pieces of legislation or legislative area, is resulting in unnecessary administrative burden and inflexibility;

3. Notes that in 2022, the Agency collected fee income totalling EUR 40,154 million (EUR 30,198 million in 2021) while the Union subsidy amounted to EUR 78,294 million (EUR 79,665 million in 2021) including contributions from third countries of EUR 2,244 million (EUR 2,418 million in 2021);

4. Notes with satisfaction that in 2022, for the first time since the final registration deadline under Regulation (EC) No 1907/2006[17](‘REACH Regulation’) in 2018, the Agency’s fee income has increased, while reliance on the Union to finance its operations has slightly decreased;

5. Stresses, despite this reversal, the need to address the lack of predictability of the Agency’s fee income and calls on the Commission to present its proposal to strengthen the governance of ECHA and increase the sustainability of its financing model without delay, in line with its commitment expressed in the Chemicals Strategy for Sustainability[18] and in light of additional legal mandates the Agency is expected to take up; Highlights that persistence of budgetary uncertainty can have negative consequences on the exercise of ECHA’s mandate and insists that predictable and sustainable financing is a pre-condition for effective discharge of the Agency’s budget and recalls previous calls of the European Parliament to improve the Agency’s budgetary certainty;

6. Underlines the necessity of ensuring adequate staffing reflecting the needs of the European Green Deal and the Union Chemical Strategy for Sustainability, Circular Economy Action Plan and, in particular, the zero pollution target and the associated increase in tasks;

7. Acknowledges that in 2022 the Agency focussed on delivering its core legal tasks and on providing scientific-technical support to the Commission in the implementation of the Chemicals Strategy for Sustainability, in particular the revision of CLP and REACH, as well as taking on new task under the Drinking Water Directive[19];

8. Welcomes the fact that 151 of the 162 planned outputs have been completed as planned and a further 8 are in progress;

9. Welcomes ECHA’s activities for promoting alternatives to animal testing and the steps taken to increase the effectiveness and visibility of this work;

10. Notes that the Agency collaborates closely with other Union agencies, such as the European Food Safety Authority, the European Centre for Disease Prevention and Control and the European Medicines Agency, by means of memoranda of understanding to strengthen exchanges of information, better mutual understanding and, where appropriate, joint projects; underlines the importance of such an approach, in order to ensure that the work of each agency is consistent with that of the other agencies and to meet the requirements of sound financial management; welcomes the sharing of services and encourages active cooperation among the Union agencies where and when possible, including in dedicated joint work teams on specific environmental topics such as pollinators and soil;

11. Regrets that ECHA continues to recommend authorising the use of substances of very high concern (SVHC) where there are significant uncertainties. Reminds the Agency of the obligation to verify if granting authorisation is duly justified and in line with the law, and to not support granting authorisations when non-negligible uncertainties remain on the existence of alternatives; Calls on ECHA to ensure the applicant provides sufficient data to exclude any carcinogenicity or long-term toxicity risk of the product;

12. Notes that the ECHA as an organisation underwent restructuring in 2022, which included significant changes at senior and middle management level and the introduction of a new hybrid working model for ECHA staff and ECHA bodies;

13. Deplores the very long time to restrict highly hazardous chemicals in the EU and that many uses of these chemicals are granted unjustly long or timeless derogations; calls on the Agency to strictly reference the evidence that it has considered when supporting derogations and to make remaining uncertainties clear;

14. Commends the work carried out in the implementation of the Integrated Regulatory Strategy (IRS) and notes with satisfaction that further progress has been made in identifying substances of concern requiring regulatory action, including the assessment of substances in groups, with approximately 2 000 substances in 61 groups assessed;

15. Invites the Agency, in respect of scientific excellence, to conduct its work in line with the Precautionary Principle, which underlines the REACH Regulation (Regulation (EC) No 1907/2006) and the need to protect, as a priority, human health and the environment from hazardous chemicals;

16. Notes that, on the whole, the Integrated Regulatory Strategy has led to approximately 75% of registered substances above 100 tonnes being assessed by the end of 2022; notes in this context that approximately 1 000 of these high-tonnage substances remain unassessed;

17. Commends the amount of work that the ECHA has done in 2022, including the large number of applications for authorisations and the adoption of opinions supporting restrictions for substances of concern, including dechlorane plus and lead used in ammunition for hunting, sport shooting and fishing;

18. Welcomes the fact that the ECHA, in cooperation with the European Food Safety Authority (EFSA), has taken steps to promote the ‘one substance – one assessment’ principle to ensure greater consistency in the hazard and risk assessment of active substances;

19. Notes that the analysis for the period 2020-2022 revealed that approximately 20% of completed assessment cases were considered for further regulatory action;

20. Recommends, based on the facts available, that discharge be granted to the Executive Director of the European Chemicals Agency in respect of the implementation of the Agency’s budget for the financial year 2022.

ANNEX: ENTITIES OR PERSONS
FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

The Chair in his capacity as rapporteur declares under his exclusive responsibility that he did not receive input from any entity or person to be mentioned in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.

INFORMATION ON ADOPTION IN COMMITTEE ASKED FOR OPINION