UNECE Forum on Market Surveillance Geneva, 29 October 2002 Role of Non-Governmental Players: The European industry perspective ORGALIME speaking for European engineering by Philippe Portalier, Adviser

Orgalime in a nutshell Launched in 1954 Confederation of Federations 32 Members from 21 European Countries Portugal Spain Italy Switzerland Luxembourg Austria Slovenia Hungary France Belgium Great Britain Ireland Norway The Netherlands Germany Denmark Sweden Finland Czech Republic Estonia Poland FECEIP Orgalime was launched in 1954. It is a confederation of national 32 national trade federations from 21 European countries. Orgalime opened its membership with the status of “observer associate members” to some candidate countries such as the Czech Republic, Estonia, Hungary, Poland, Slovenia and recently Slovakia.

Orgalime: speaking for European Engineering European institutions = Regulator CEN CENELEC ETSI ISO Green & Consumer Stakeholders Press Industries : Mechanical - Electrical - Electronic and Metalworking > 100 000 Companies generating 1.040 Billion Euro EU member states, etc.. Market surveillance authorities O R G A L I M E Other World Wide Stakeholders Orgalime members Orgalime speaks for the European Engineering industries in the mechanical, electrical and metalworking sectors, indirectly representing the interests of more than 100 000 companies, the very large majority of them are small and medium sized enterprises and not only the large well-known European manufacturers such as Nokia, Siemens, Alcatel, Mannesmann, etc.. Orgalime network operates in close co-operation with various key-players in European policy making, many of them are represented today: national governments and market surveillance authorities; standardisation organisations such as CEN, CENELEC and ETSI at European level; ISO, IEC and ITU at the international level; European consumer organisations, with which we share some concerns, such as the misleading signification of the CE marking for end-users; Other world wide based stakeholders, especially in the United States and Japan, which have an interest in a well operating European single market, without technical barriers to trade.

Expect safety and confidence in products Sustainable development = fair share of responsabilities and true balance of interests Users & consumers Expect safety and confidence in products Market surveillance authorities Ensures control Environ- mental impact Social impact Economic impact + - Regulator Set requirements First of all, I would like to make clear that I will speak about market surveillance in the context of product related policies linked to our sector in the European Union. As mentioned this morning by Mr. Garona, the implementation of the “sustainable development” policy in the E.U. leads to ever growing complexity, which melt together legal and technical requirements and makes the implementation of regulations more and more difficult, for all parties: USERS, whether professional or consumers, growingly care for more safety and environment conscious attitudes. This is usually reflected in the press and so called NGO statements; The REGULATOR’s aims and duties are to ensure public order and balance of interests, i.e. consumer safety and environment sustainability, but also competition on a level-playing field and global access; INDUSTRY’s aim is to respond to market needs, including for consumer safety and environment protection; therefore, being part of customer’s satisfaction, compliance to the policy aims of consumer safety and environment care, could also become marketing arguments. MARKET SURVEILLANCE AUTHORITIES have the mission to ensure that products placed on the market are compliant to the law, i.e. are not dangerous for the end-user. But they also have the mission to ensure that there is no market distortion : a large number of consumers are also employed by manufacturing companies, which competitiveness is challenged by unfair practices. Industry Comply

The “New Approach” = most cost / effective solution Share of responsibilities 1. Problems: dangerous products, conterfeiting, etc… Market authorities Unfair manufacturers / Fair manufacturers Users & consumers 2. Consequence: raise of public concern Market Regulator B a l a n c e o f interests Self declaration of conformity + EN Standards Appropriate ! Detailed “old approach” Legislation 3. Solution: fix the acceptable thresholds and decide on an appropriate policy = EU New Approach Not appropriate! The European engineering market is generally safe for over 95% of its products, mostly thanks to the New Approach to technical harmonisation (and I will explain why later). However, unfortunately, this situation is challenged by free riders, mostly manufacturing outside of the E.U. (globalisation), due to the compartmentisation of the market surveillance in our countries. Unsafe products, brought to the market by criminally acting operators, undermine the credibility of both types of conformity declaration. The consequence of it is a raise of public concerns (lost of confidence in the products), which put pressure on the regulator: the reliability of both conformity assessment systems and market surveillance mechanisms are challenged. It is then up to the regulator to fix what is acceptable for society, I.e. to ensure a high level of health and safety, while at the same time minimizing costs and administrative burdens for companies and enforcement authorities, ensure fair competition and market access. The most cost/effective solution in our opinion to ensure a share of responsibilities and a balance of interests among all stakeholders is the so called “New Approach” in the European Union. The old “all-in-regulation” approach is not appropriate , because it could not cope with the speed of innovation, takes years to be implemented and is outdated when operational. Shifting enforcement responsibility as a rule for all products on third party certifiers is not cost-effective: it means more costs and administrative burdens for companies, especially SMEs, without guarantee for consumer safety (3rd party certification marks are easily copied too). It should be left to each sub-market to decide voluntarily to use third-party certification for engineering products. Effective market surveillance is key to the success of the New Approach as a cost-effective tool. Effective & harmonised Market Surveillance 3rd party certification mandatory for ALL products

Effective market surveillance is necessary for industry “is a pre-requisite for fair competition throughout the internal market” N. Anselmann, CEC DG Enterprise, Berlin, Oct. 2002 always necessary, whatever the level companies notified bodies How to perform it in practice? Rapid exchange of test results Cross border co-operation (ICSMS, trainings) Simplify procedures, but keep communicating Effective market surveillance It is key to prevent some criminally acting operators, both manufacturers and importers (most of them importing not compliant products from South-East Asia and China), to put the safety of consumers and the profitability of companies at risk (counterfeiting = up to 50% loss of market shares in some sectors). Paraphrasing a representative of the European Commission at the recent Berlin Conference on “market surveillance and consumer safety”, effective market surveillance is the counterpart of fair manufacturers’ investment in making quality products. As already explained, market surveillance will be always necessary, at company level, but also at the level of notified bodies and certifiers, whose certificates and approval marks are also falsified by unfair operators. Ideally, effective market surveillance should be: RAPID, because some products have a short life-time, such as Christmas lightings; SIMULTANEOUS, because without cross-border co-operation, removing a non compliant product from a Member state market will not prevent it to be reintroduced in another market. THOROUGH, which means as clever and pragmatic as unfair operators could be: formal compliance (marking surveillance) is not reliably sufficient. MADE PUBLIC, because it must be clear that the European market is no place for unfair business; But also RESPECTFUL of the rights of the market operator involved. He must be consulted prior to any action: - If the manufacturer or the importer is honest, he will take action and undertake a product recall (if not already done) and communicate towards its customers, etc.. Corporate image is the most precious asset of well-known manufacturers: therefore, its brand should not been damaged because of a temporary problem in its manufacturing process; -If the manufacturer or the importer is dishonest, in most cases, he will not be traceable: in this circumstance, reaction must be quick, harmonised and thorough; -If the quality of an applicable standard is at stake, concertation with standardisation organisations is necessary (as part of a normal process, 20% of Cenelec standards are under revision). Besides, Standardisation Organisations have produced useful guidelines and set up helpful structures for market surveillance authorities: to better interpret available standards (exemple of the hot surface of toasters) or to improve harmonised assessment methods (Cf. CENELEC Conforty Assessment Forum activities); How to perform an efficient market surveillance in practice? Of course, we understand that levels and approaches of enforcement vary considerably between Member states for historical, cultural, geographical and most of all economical reasons, but we call on Member states to harmonise their procedures and methods as much and quickly as possible. Market surveillance must be effective, first of all in knowledge-sharing, by communicating test results within the European Union and through cross-border co-operation: Only enhanced co-operation could help building trust among market surveillance authorities. The industry is ready to contribute: As a standardisation stakeholder in helping CEN/CENELEC and ISO/IEC to write propose guidelines for the interpretation of standards or for harmonised assessment methods with concrete show case for publications, training and co-operation programmes. The traceability of products must be improved, first of all through cross-border co-operation. The industry is ready to help in building information networks on unfair practices, databases containing the identification of non compliant products (Cf. the ICSMS initiative supported by the European Commission and some EU Member states). Simplify procedures but keep communicating: Unfair manufacturers must be tried and most of all understand through various communication channels (e.g. targeted campaigns clarifying to end-users the role of the CE marking / press campaigns against counterfeited goods) that the European market is no place for unfair business. The industry is ready to help in that too. Penalties for unsafe products of the misuse of marks may serve as a source for funding market surveillance.

Conclusion: for an effective MS Share of responsibilities B a l a n c e o f interests Efficient and effective coordination Among market surveillance authorities Between MS authorities and Customs Between MS authorities and market players Efficient and effective communication With the manufacturer before action With standardisation organisations With the “end-users” after: A2B + A2C Need for improved coordination: Among market surveillance authorities: Exchange of test/evaluation reports to build up mutual trust and save testing costs; Between market surveillance authorities and Customs: Most of dangerous products are not manufactured in Europe, but are imported from China, South East Asia, the Middle-East; Between market surveillance authorities and market players, because eventually our interests are aiming towards the same goal. Need for effective communication Between MS authorities and market players: When taking action, market surveillance authorities should more systematically refer to the manufacturer responsible for the CE marking: measures need to refer to the source of the problems; actions limited to the distribution level within a national territory are not sufficiently effective. With standardisation organisations, because standards revision is a normal standing procedure, according to the new expectations of society for innovative and safe solutions; need to be improved: for instance, as part of a normal process, 20% of Cenelec standards are under revision. Besides, Standardisation Organisations have produced useful guidelines and set up helpful structures for market surveillance authorities: to better interpret available standards (exemple of the hot surface of toasters) or to improve harmonised assessment methods (Cf. CENELEC Conforty Assessment Forum activities); With the end-users, after that action has been taken: administration to businesses (A2B) to prevent further unfair practices; administration to consumers (A2C) to restore or confort confidence in the damaged market.