Towards a New Industrial Policy - The ESA Council Meeting at Ministerial Level on 4 March 1997

The assembled Ministers and Senior Officials at ESA Head Office

At the last ESA Council Meeting at Ministerial level, in Toulouse in October 1995, the Agency was asked to review its industrial policy and the system for calculating the scale of contributions to its Mandatory Programme. A Resolution adopted at that meeting addressed industrial-policy matters in a specific chapter focusing on three topics:

• correction of overall industrial-return imbalances; here the Ministers appreciated the efforts already made to take measures to reduce residual imbalances

• improvement of procurement procedures; here the Ministers stressed the importance of these procedures to the cost-effectiveness and the competitiveness of European industry, and invited the Director General to make increased use of competitive tendering and financial incentives or penalties for contractors

• review of the Agency's industrial policy; here the Ministers, underlining the importance of industrial policy to the future of ESA, decided to set up a Council Working Group to analyse and evaluate the Agency's current industrial policy and to propose adaptations, and invited the Director General to submit a proposal to Council at Ministerial Level.

After a year of work by representatives of ESA's Member States and the Director General to comply with these various requests, the Ministers and senior officials representing the Agency's fourteen Member States, plus Canada as a Cooperating State and the European Commission with Observer status, met again on 4 March to discuss the Director General's proposals for the adaptation of the Agency's industrial policy, the clearance of past return imbalances, and the reform of the system for calculating the scale of contributions to the Agency's mandatory activities. The meeting was chaired by Mr Yvan Ylieff, the Belgian Minister for Science Policy, who had chaired the Toulouse meeting.

Mr Jean-Marie Luton (left) and Mr Yvan Ylieff

Mr Hugo Parr, Chairman of the ESA Council at Delegate Level, opened the discussion by recapitulating the background and context. Mr Jean-Marie Luton, ESA's Director General, having emphasised the Agency's successes to date, stressed the importance of industrial-policy reform in the general context of the Agency's evolution.

Endorsing the main objectives assigned at the Toulouse meeting, namely:

• to make more cost-effective use of ESA's resources

• to increase European industry's share of World markets

• to mobilise the technical skills and stimulate the innovative capacity of European industry, paying special attention to small-and medium-sized businesses

• to achieve a balance between the interests of the main contractors and those of the sub-contractors,

the Council at Ministerial Level decided to:

• streamline the Agency's decision-making procedures by maintaining continuity between its preparatory and its development programmes

• implement partnership agreements with European industry in all areas affecting its competitiveness in World markets

• apply measures designed to derive maximum benefit from the existing industrial fabric

• introduce the necessary flexibility into Member States' financial contributions to ESA programmes, thus benefiting from competition between industrial suppliers whilst at the same time maintaining a fair distribution of returns.

The new policy will be introduced gradually over the period 1997 to 1999, and special measures will be taken to compensate for the past deficits accumulated by certain Member States.

Finally, the Council at Ministerial Level decided to meet again in 1998 to take decisions on the Agency's future programmes from the perspective of an overall strategy encompassing the roles of other European bodies involved in the space sector.

At the end of the meeting, Mr Ylieff said:

'I am especially pleased that we have adopted a resolution making a major step towards even better use of public investment in the space sector of Europe's industrial fabric and capacity for innovation, while strengthening our competitiveness on World markets.