This Thursday, 5 July, MEPs voted by a large majority in favour of the own-initiative report “recommendations to the Commission on a Statute for social and solidarity-based enterprises”. Only the right-wing opponents of Europe voted against. With the approval in plenary, a strong “legislative own-initiative report” has been presented, which puts the Commission under an obligation to act and calls for action. The Commission now has one year to implement the European Parliament’s proposals with legislative proposals or to explain why it rejects them.
Sven Giegold, economic and financial spokesman for the Greens/EFA Group and co-president of the “Social Economy Intergroup” in the European Parliament, said:
“We are fed up with the inaction of the EU Commission in supporting the social and solidarity economy. Since the great progress made by Michel Barnier in his time as Internal Market Commissioner, the EU Commission only played the Barricade game. Even the notoriously lame Council of member states has since been more active than the EU Commission when it comes to solidarity enterprises in recent years, thanks to the Luxembourg Council Presidency. This is why the European Parliament has now drawn its sharpest sword and is now pushing the EU Commission to act with a legislative own-initiative report.
A European label for products from social and solidarity enterprises would be an enormous boost for new companies with an orientation to the common good. To this end, we need a European definition of what we mean by social and solidarity enterprises. This would provide the basis for systematically promoting companies of general interest, for example in public procurement. The ball is now in the Commission’s court to create an EU-wide legal framework to strengthen the social and solidarity economy. Already today, socially and solidarity enterprises form a strong pillar of our economy in the areas of digitisation, migration, environmental protection, health and social welfare. It is high time that the EU’s laws are ploughed through, that they support social and solidarity enterprises instead of hindering them.”
BACKGROUND: what Parliament proposes for Commission to put into a draft EU law
Recommendation 1 : creation of the European Social Economy Label and qualifying undertakings
The European Parliament considers that the legislative act to be adopted should aim to create a ‘European Social Economy Label’, which will be optional for enterprises based on the social economy and solidarity (social and solidarity-based enterprises), regardless of the legal form they decide to adopt in accordance with national legislation.
The European Parliament considers that the European Social Economy Label should only be awarded to enterprises complying with the following criteria in a cumulative manner:
the organisation should be a private law entity established in whichever form available in Member States and under EU law, and should be independent from the State and public authorities;
- its purpose must be essentially focused on the general interest or public utility;
- it should essentially conduct a socially useful and solidarity-based activity, i.e. via its activities it should aim to provide support to vulnerable groups, to combat social exclusion, inequality and violations of fundamental rights, including at the international level, or to help protect the environment, biodiversity, the climate and natural resources;
- it should be subject to an at least partial constraint on profit distribution and to specific rules on the allocation of profits and assets during its entire life, including at dissolution; in any case, the majority of the profits made by the undertaking should be reinvested or otherwise used to achieve its social purpose;
- it should be governed in accordance with democratic governance models involving its employees, customers and stakeholders affected by its activities; members’ power and weight in decision-making may not be based on the capital they may hold;
- The European Parliament considers that nothing prevents conventional undertakings from being awarded the European Social Economy Label if they comply with the above-mentioned requirements, in particular regarding their object, the distribution of profits, governance and decision-making.
Recommendation 2 : mechanism for the certification, supervision and monitoring of the European Social Economy Label
The legislative act should establish a mechanism of certification and of supervision and monitoring of the legal label with the involvement of Member States and representatives of the social economy; such a mechanism is essential to protect the legal label of enterprise based on the social economy and solidarity’ and preserve its intrinsic value. The European Parliament considers that this control should involve organisations representative of the social enterprise sector.
Penalties for the infringement of the relevant rules could range from a mere admonition to the withdrawal of the label.
Recommendation 3 : recognition of the European Social Economy Label
The European Social Economy Label should be valid in all Member States. An enterprise bearing that label should be recognised as a social and solidarity-based enterprise in all Member States. The label should allow any undertaking bearing it to carry out its main activity in other Member States under the same requirements as national undertakings bearing that label. They should enjoy the same benefits, rights and obligations as social and solidarity-based enterprises incorporated under the law of the Member State in which they operate.
Recommendation 4 : reporting obligations
The legislative act should require social and solidarity-based enterprises willing to maintain the label to issue on an annual basis a social report on their activities, results, involvement of stakeholders, allocation of profits, salaries, subsidies, and other benefits received. In this regard, the Commission should be authorised to produce a model to help social and solidarity-based enterprises with this endeavour.
Recommendation 5 : guidelines of good practices
The legislative act should also authorise the Commission to establish guidelines regarding good practices for social and solidarity-based enterprises in Europe. Such good practices should include, in particular, the following:
- models of effective democratic governance;
- consultation processes for the establishment of an effective business strategy;
- adaptation to social needs and to the employment market, particularly at the local level;
- wage policy, professional training, health and safety at work and quality of employment;
- relations with users and clients and the response to social needs not covered by the market or the State;
- the situation of the enterprise with regard to diversity, non-discrimination and equal opportunities for men and women among their members, including positions of responsibility and leadership;
Recommendation 6 : list of legal forms
The legislative act should include a list of legal forms in Member States of enterprises and undertakings qualifying for the European Social Economy Label. Such list should be reviewed regularly. In order to ensure transparency and effective cooperation between the Member States, that list should be published on the European Commission website.
Recommendation 7 : revision of existing legislation
The Commission is invited to review existing legal acts and to submit, where appropriate, legislative proposals establishing a more coherent and complete legal framework in support of social enterprises;
Recommendation 8 : on the eco-system for social enterprises and cooperation between Member States
The Commission should ensure that its policies reflect the commitment to create an eco-system for social enterprises. The Commission is invited to take account of the fact that social and solidarity-based enterprises have a strong local and regional influence, which gives them the advantage of being more aware of specific needs and able to offer products and services, most of them community-based, as well as to enhance social and territorial cohesion. The Commission is invited to take steps to promote cooperation between social enterprises and solidarity-based enterprises across national and sectoral boundaries so as to nurture the exchange of knowledge and practices in such a way as to support the development of such enterprises;
The initiative report can be found here: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+REPORT+A8-2018-0231+0+DOC+PDF+V0//EN
Legislative train schedule:
Background: Social Economy Intergroup
The European Parliament Social Economy Intergroup: is supported by more than 80 MEPs, from 6 political groups. It is designed to ensure that the European Parliament, the European Commission and the Council of the European Union take into account the social economy and its actors whilst developing and implementing their policies. Moreover, its goals are to promote exchanges of views on EU policies and legislations linked to social economy issue, and to provide regular opportunities for dialogue between MEPs, social economy representatives and experts, European Commission and Member States representatives and other relevant stakeholders.