Justice Commissioner Didier Reynders had already been thinking aloud about such a step, and now the Commission has announced that it will present a proposal for better cooperation between data protection supervisory authorities. In doing so, it wants to respond to the problems with cross-border GDPR enforcement – and to a wish list from the competent authorities last year. Falk Steiner reports.
Another Commission project, the Critical Raw Materials Act, is also about cooperation. The Commission wants to improve monitoring and risk management for the supply of critical raw materials and create a central coordinating body for this purpose. It is not yet clear exactly what this will look like. Leonie Düngefeld has already asked what the German industry recommends.
Economists Veronika Grimm and Christina von Rüden address the question of how dangerous Europe’s dependence on critical raw materials can become. It is high time that the EU learns from the mistakes of the past.
After China’s top diplomat Wang Yi was received by an enthusiastic Viktor Orbán in Hungary, Moscow was the next stop on the itinerary. Both places were talking about a peaceful solution for Ukraine, they said – while Beijing is still downplaying Russia’s cruel war as a “crisis.” Michael Radunksi analyzes what to make of China’s “peace offensive.”
If you enjoy Europe.Table, please feel free to forward our briefing. If this mail was sent to you: Here you can test our briefing for free.
The route for announcing the proposed legislation is unusual: a notification before the start of a pre-consultation has now gone online; last time, Justice Commissioner Didier Reynders had so far only thought aloud about such steps.
The Commission proposal is to be presented in the second quarter of 2023. With the planned regulation, the Commission wants to respond to the problems with cross-border GDPR enforcement, as Reynders’ spokesman Christian Wigand confirmed upon request. He emphasizes that the Commission has no intention to undertake a comprehensive revision, a review of the GDPR.
Last year, the European data protection supervisory authorities compiled a wish list. The Federal Data Protection Commissioner, Ulrich Kelber, expressly supported this list and contributed to it, a spokeswoman said in response to a query.
In it, the supervisory authorities demand, among other things, solutions in the legal text for disputed issues. What superficially seems like detail makes a big difference – for example, the legal position of the complainant in the proceedings and the rights of his representatives. The question of which files the lead agency must make available to other data protection supervisory authorities in the case of cross-border cooperation has also been insufficiently regulated to date, according to the supervisory authorities.
A surprise, but on the wish list is that it be made clear that a supervisory authority may also monitor compliance with orders. These are all points that should have been history with the full harmonization of the GDPR, which has been in force throughout Europe for almost five years.
In practice, however, it is clear how much the member states have differing views when it comes to transposing it into national administrative law. Time and again, individual supervisory authorities come in for criticism, with Ireland leading the way. DPC Ireland has been called on several times by the European Data Protection Board (EDPB) by the other supervisory authorities to take a tougher approach.
The Irish data protection regulator is responsible for many of the major digital companies operating in the EU, such as Google, Meta or TikTok. In the case of the decision on Meta’s Facebook and Instagram, the Irish DPC had announced its intention to take individual aspects of the EDPB decision to court: These were not covered by the GDPR.
For this reason, Chapter 7 of the General Data Protection Regulation is likely to be the main focus of the planned legislation: There, the cooperation of data protection supervisory authorities in cross-border cases is regulated. According to the Commission’s consultation announcement, the aim of the planned amendment is to “harmonize some aspects of the administrative procedure applied by national data protection authorities in cross-border cases.”
Whether this means that the wishes of the data protection supervisory authorities that go beyond this are off the table will only become clear later this year, with the actual proposal for regulation from the responsible EU Justice Commissioner Didier Reynders. As recently as April of last year, Reynders could see no need for action.
The Critical Raw Materials Act, which the Commission is expected to unveil on March 14, will also regulate stronger monitoring of critical raw materials at the EU level. “Coordination of monitoring and risk management at the EU level remains insufficient to anticipate and prevent supply disruptions of critical raw materials,” the call for public consultation states.
Measures at EU level are more efficient than national measures, the Commission writes, because they prevent overlaps and take into account the value chains of the entire EU. It would also save costs. It therefore plans to improve monitoring, risk management and governance in the area of critical raw materials.
Involving the relevant agencies of the member states, the Commission wants to establish a “dedicated operational network” for timely information sharing that would develop monitoring measures and early warning mechanisms, conduct stress tests on critical supply chains, and map strategic mineral resources.
In Germany, these tasks are covered by the German Raw Resources Agency (DERA), which is located at the Federal Institute for Geosciences and Natural Resources (BGR). As an information and advisory center for policymakers and industry, the agency monitors price developments as well as trends in supply and demand for primary raw materials and intermediate products. It alerts German companies to risks or critical developments at an early stage and helps them to develop alternate strategies.
German Minister for Economic Affairs Robert Habeck described DERA’s competencies as a “real treasure“. The agency could be a model for other EU member states, he said last fall at the BDI’s Raw Materials Congress. After its founding in 2010, DERA was for a long time an exceptional phenomenon in the EU. Only recently are geological services in other countries also setting up targeted monitoring for raw materials, for example in France and the UK.
Although the raw material requirements of individual countries can be very different, says Siyamend Al Barazi, head of the raw materials economy department at DERA, a coordinated raw materials monitoring allows for increased supply security and reduced price and delivery risks, particularly in times of increasing protectionist measures. “The exchange and collaboration of individual member states plays an important role in this.”
However, according to Al Barazi, information exchange among member states generally already works very well. If one were to consider a European raw materials agency, it should focus on functions such as procurement and hedging of raw materials, along the entire value chain, from mining to further processing and recycling. This is similar to the Japanese raw materials agency JOGMEC, which actively participates in projects on the raw materials markets, develops them and thus secures access to these raw material quantities for Japanese companies.
The German and European strategy to date has been for the state to support the activities, while the procurement and securing of raw materials has remained the responsibility of the companies. This is now set to change. What form this consideration will ultimately take, whether there will actually be an active raw materials agency at EU level, is not yet clear. A raw materials fund is also being discussed, which could be used to finance and secure projects. This idea has been advanced primarily by Germany and France.
“Due to the different economic structure in the EU, the Japanese model cannot simply be copied and an investment fund would be much more efficient,” says Anne Lauenroth from the Federation of German Industries (BDI). “A fund that invests in selected strategic projects in the EU and outside could then also stimulate private investment.”
Instead of creating a new authority, the EU Commission should continue to coordinate raw materials monitoring, says Oliver Blank of the German Electrical and Digital Manufacturers’ Association (ZVEI). “Similar to the way the Commission has a coordinating role on trade policy and works with the member states, the same could be done on raw materials,” he says. “Without creating new bureaucratic hurdles, a coordinating body within the Commission could then work with member states for database matching.”
If the industry has its way, the central result of the EU raw materials monitoring, the list of critical raw materials, should be drawn up more strategically, revised more often and adjusted. Until now, the list has been published by the Commission every three years. Blank proposes that it be updated every six months with data from member states and that factors such as current shortages and upcoming trade agreements be included in the assessment.
It’s important to remain agile and responsive to market and technology developments, says Anne Lauenroth of BDI. “The methodology should be adapted and strategically keep an eye on areas that could become critical. Aluminum, copper and nickel, for example, would then have to be included.”
Russia’s war of aggression on Ukraine and the accompanying geopolitical changes have forced Germany and Europe to reduce their dependence on Russian gas in the shortest possible time. However, a variety of questionable political decisions in the past have led to dependencies not only on gas supplies but also on critical raw materials, limiting Europe’s strategic autonomy.
Critical raw materials are essential not only to manage the green transformation. Existing dependencies therefore not only jeopardize European competitiveness, but also make us vulnerable to blackmail and can prevent necessary security policy responses to current events. It is therefore central to quickly learn lessons from past mistakes and consistently address these dependencies.
First, efforts to diversify the sourcing of critical raw materials need to be intensified immediately and with various instruments. While diversifying global supply chains is fundamentally a business decision, governments can support companies’ efforts by creating the right framework conditions. For example, a global alliance of like-minded partners could be established, a so-called Critical Raw Materials Club, in which information, networks and capacities are shared.
The United States’ cooperation with the European Commission under the Mineral Security Partnership provides a suitable framework for this. After all, like-minded countries are also likely to engage in a race for critical raw materials in the near future. In this context, a special cooperation framework could allow countries to secure access to critical raw materials but also help each other out in the event of local shortages, thus reducing the risk posed by coercive economic measures on the part of third countries.
Access to as-yet undeveloped deposits is also favored by free trade agreements that provide preferential access to relevant sources of critical raw materials. This is particularly true of trade agreements with Africa and Latin America, whose critical raw material deposits are considered to be high. The conclusion of these trade agreements has often been delayed or their ratification is still pending.
Future trade relations between Europe and less developed countries in connection with the procurement of critical raw materials also offer the opportunity to develop possible donor-recipient relationships of the past in the direction of a mutually beneficial partnership at eye level. On his recent trip to Chile to renew the German-Chilean raw materials partnership, Chancellor Scholz therefore rightly emphasized the importance of complying with local environmental and social standards while safeguarding local value creation.
However, the mining and processing of critical raw materials is not only the responsibility of third countries. Europe should also participate in further extraction in order to secure future supplies and retain a certain degree of autonomy in the event of unforeseen shortages. Above all, this requires communicating the benefits of access to national deposits of critical raw materials and involving the local population in the projects.
In Portugal, for example, the mining law was amended specifically for this purpose: Profits from mining, which previously went to the state alone, are now shared by up to half with the local population. A Portuguese-style model could therefore have a positive impact on strengthening domestic production in addition to creating new jobs. The recently discovered Swedish rare earth deposit could thus be an opportunity for Europe to demonstrate its willingness to invest in reducing its foreign dependence.
Given the need for critical raw materials to produce climate-friendly technologies such as solar panels and wind turbines, the costs of local environmental impact should be carefully weighed against the benefits of global emissions reductions. Environmental standards for mining in Europe should therefore be re-evaluated as necessary.
The same applies to environmental requirements in connection with guarantees for untied financial loans. In addition to higher supply risks for European producers, global environmental costs are likely to be higher if mining in third countries is not undertaken by European companies but by countries with significantly lower environmental standards. With a view to expanding European production, harmonization of environmental and social standards relevant to mining could accelerate the revival of the European mining industry.
To address the concerns of potential investors in mining projects in Europe, a three-step approach would be advisable. First, European deposits of critical raw materials should be clearly identified, while relevant areas should be carefully assessed from a security of supply perspective before new commercial or private construction projects are approved. The network of European raw material agencies envisaged under the EU Critical Raw Materials Act (CRMA) could make a valuable contribution here.
Second, planning and approval procedures should be accelerated so that the average lead times are no longer 16 years, as is currently the case. Third, long-term purchase agreements of private companies should be supported by untied financial loans or similar instruments to create financial planning security.
In the long term, European recycling infrastructure for critical raw materials should also be more widely recognized as a possible instrument for reducing import dependency. This goal was formulated in the EU Action Plan for the Circular Economy as part of the European Green Deal. In particular, resource-intensive industries such as textiles, construction, electronics and plastics would benefit from further recycling efforts to reduce procurement costs.
As European Commission President Ursula von der Leyen emphasized in her recent 2022 State of the Union address, a loss of reliable access to critical raw materials would jeopardize both our economic performance and our path to net-zero emissions. In this context, policymakers and businesses alike have recognized that Europe’s dependence on the extraction and processing of critical raw materials by just a few suppliers threatens our prosperity – especially against the backdrop of growing geopolitical rivalries that increase the risk of economic coercion by third countries.
If the mistakes made in the procurement of natural gas are to be avoided, now is the time to act. All eyes are therefore on Brussels, where the European Critical Raw Materials Act is expected to be presented on March 14, 2023.
Justice Commissioner Didier Reynders had already been thinking aloud about such a step, and now the Commission has announced that it will present a proposal for better cooperation between data protection supervisory authorities. In doing so, it wants to respond to the problems with cross-border GDPR enforcement – and to a wish list from the competent authorities last year. Falk Steiner reports.
Another Commission project, the Critical Raw Materials Act, is also about cooperation. The Commission wants to improve monitoring and risk management for the supply of critical raw materials and create a central coordinating body for this purpose. It is not yet clear exactly what this will look like. Leonie Düngefeld has already asked what the German industry recommends.
Economists Veronika Grimm and Christina von Rüden address the question of how dangerous Europe’s dependence on critical raw materials can become. It is high time that the EU learns from the mistakes of the past.
After China’s top diplomat Wang Yi was received by an enthusiastic Viktor Orbán in Hungary, Moscow was the next stop on the itinerary. Both places were talking about a peaceful solution for Ukraine, they said – while Beijing is still downplaying Russia’s cruel war as a “crisis.” Michael Radunksi analyzes what to make of China’s “peace offensive.”
If you enjoy Europe.Table, please feel free to forward our briefing. If this mail was sent to you: Here you can test our briefing for free.
The route for announcing the proposed legislation is unusual: a notification before the start of a pre-consultation has now gone online; last time, Justice Commissioner Didier Reynders had so far only thought aloud about such steps.
The Commission proposal is to be presented in the second quarter of 2023. With the planned regulation, the Commission wants to respond to the problems with cross-border GDPR enforcement, as Reynders’ spokesman Christian Wigand confirmed upon request. He emphasizes that the Commission has no intention to undertake a comprehensive revision, a review of the GDPR.
Last year, the European data protection supervisory authorities compiled a wish list. The Federal Data Protection Commissioner, Ulrich Kelber, expressly supported this list and contributed to it, a spokeswoman said in response to a query.
In it, the supervisory authorities demand, among other things, solutions in the legal text for disputed issues. What superficially seems like detail makes a big difference – for example, the legal position of the complainant in the proceedings and the rights of his representatives. The question of which files the lead agency must make available to other data protection supervisory authorities in the case of cross-border cooperation has also been insufficiently regulated to date, according to the supervisory authorities.
A surprise, but on the wish list is that it be made clear that a supervisory authority may also monitor compliance with orders. These are all points that should have been history with the full harmonization of the GDPR, which has been in force throughout Europe for almost five years.
In practice, however, it is clear how much the member states have differing views when it comes to transposing it into national administrative law. Time and again, individual supervisory authorities come in for criticism, with Ireland leading the way. DPC Ireland has been called on several times by the European Data Protection Board (EDPB) by the other supervisory authorities to take a tougher approach.
The Irish data protection regulator is responsible for many of the major digital companies operating in the EU, such as Google, Meta or TikTok. In the case of the decision on Meta’s Facebook and Instagram, the Irish DPC had announced its intention to take individual aspects of the EDPB decision to court: These were not covered by the GDPR.
For this reason, Chapter 7 of the General Data Protection Regulation is likely to be the main focus of the planned legislation: There, the cooperation of data protection supervisory authorities in cross-border cases is regulated. According to the Commission’s consultation announcement, the aim of the planned amendment is to “harmonize some aspects of the administrative procedure applied by national data protection authorities in cross-border cases.”
Whether this means that the wishes of the data protection supervisory authorities that go beyond this are off the table will only become clear later this year, with the actual proposal for regulation from the responsible EU Justice Commissioner Didier Reynders. As recently as April of last year, Reynders could see no need for action.
The Critical Raw Materials Act, which the Commission is expected to unveil on March 14, will also regulate stronger monitoring of critical raw materials at the EU level. “Coordination of monitoring and risk management at the EU level remains insufficient to anticipate and prevent supply disruptions of critical raw materials,” the call for public consultation states.
Measures at EU level are more efficient than national measures, the Commission writes, because they prevent overlaps and take into account the value chains of the entire EU. It would also save costs. It therefore plans to improve monitoring, risk management and governance in the area of critical raw materials.
Involving the relevant agencies of the member states, the Commission wants to establish a “dedicated operational network” for timely information sharing that would develop monitoring measures and early warning mechanisms, conduct stress tests on critical supply chains, and map strategic mineral resources.
In Germany, these tasks are covered by the German Raw Resources Agency (DERA), which is located at the Federal Institute for Geosciences and Natural Resources (BGR). As an information and advisory center for policymakers and industry, the agency monitors price developments as well as trends in supply and demand for primary raw materials and intermediate products. It alerts German companies to risks or critical developments at an early stage and helps them to develop alternate strategies.
German Minister for Economic Affairs Robert Habeck described DERA’s competencies as a “real treasure“. The agency could be a model for other EU member states, he said last fall at the BDI’s Raw Materials Congress. After its founding in 2010, DERA was for a long time an exceptional phenomenon in the EU. Only recently are geological services in other countries also setting up targeted monitoring for raw materials, for example in France and the UK.
Although the raw material requirements of individual countries can be very different, says Siyamend Al Barazi, head of the raw materials economy department at DERA, a coordinated raw materials monitoring allows for increased supply security and reduced price and delivery risks, particularly in times of increasing protectionist measures. “The exchange and collaboration of individual member states plays an important role in this.”
However, according to Al Barazi, information exchange among member states generally already works very well. If one were to consider a European raw materials agency, it should focus on functions such as procurement and hedging of raw materials, along the entire value chain, from mining to further processing and recycling. This is similar to the Japanese raw materials agency JOGMEC, which actively participates in projects on the raw materials markets, develops them and thus secures access to these raw material quantities for Japanese companies.
The German and European strategy to date has been for the state to support the activities, while the procurement and securing of raw materials has remained the responsibility of the companies. This is now set to change. What form this consideration will ultimately take, whether there will actually be an active raw materials agency at EU level, is not yet clear. A raw materials fund is also being discussed, which could be used to finance and secure projects. This idea has been advanced primarily by Germany and France.
“Due to the different economic structure in the EU, the Japanese model cannot simply be copied and an investment fund would be much more efficient,” says Anne Lauenroth from the Federation of German Industries (BDI). “A fund that invests in selected strategic projects in the EU and outside could then also stimulate private investment.”
Instead of creating a new authority, the EU Commission should continue to coordinate raw materials monitoring, says Oliver Blank of the German Electrical and Digital Manufacturers’ Association (ZVEI). “Similar to the way the Commission has a coordinating role on trade policy and works with the member states, the same could be done on raw materials,” he says. “Without creating new bureaucratic hurdles, a coordinating body within the Commission could then work with member states for database matching.”
If the industry has its way, the central result of the EU raw materials monitoring, the list of critical raw materials, should be drawn up more strategically, revised more often and adjusted. Until now, the list has been published by the Commission every three years. Blank proposes that it be updated every six months with data from member states and that factors such as current shortages and upcoming trade agreements be included in the assessment.
It’s important to remain agile and responsive to market and technology developments, says Anne Lauenroth of BDI. “The methodology should be adapted and strategically keep an eye on areas that could become critical. Aluminum, copper and nickel, for example, would then have to be included.”
Russia’s war of aggression on Ukraine and the accompanying geopolitical changes have forced Germany and Europe to reduce their dependence on Russian gas in the shortest possible time. However, a variety of questionable political decisions in the past have led to dependencies not only on gas supplies but also on critical raw materials, limiting Europe’s strategic autonomy.
Critical raw materials are essential not only to manage the green transformation. Existing dependencies therefore not only jeopardize European competitiveness, but also make us vulnerable to blackmail and can prevent necessary security policy responses to current events. It is therefore central to quickly learn lessons from past mistakes and consistently address these dependencies.
First, efforts to diversify the sourcing of critical raw materials need to be intensified immediately and with various instruments. While diversifying global supply chains is fundamentally a business decision, governments can support companies’ efforts by creating the right framework conditions. For example, a global alliance of like-minded partners could be established, a so-called Critical Raw Materials Club, in which information, networks and capacities are shared.
The United States’ cooperation with the European Commission under the Mineral Security Partnership provides a suitable framework for this. After all, like-minded countries are also likely to engage in a race for critical raw materials in the near future. In this context, a special cooperation framework could allow countries to secure access to critical raw materials but also help each other out in the event of local shortages, thus reducing the risk posed by coercive economic measures on the part of third countries.
Access to as-yet undeveloped deposits is also favored by free trade agreements that provide preferential access to relevant sources of critical raw materials. This is particularly true of trade agreements with Africa and Latin America, whose critical raw material deposits are considered to be high. The conclusion of these trade agreements has often been delayed or their ratification is still pending.
Future trade relations between Europe and less developed countries in connection with the procurement of critical raw materials also offer the opportunity to develop possible donor-recipient relationships of the past in the direction of a mutually beneficial partnership at eye level. On his recent trip to Chile to renew the German-Chilean raw materials partnership, Chancellor Scholz therefore rightly emphasized the importance of complying with local environmental and social standards while safeguarding local value creation.
However, the mining and processing of critical raw materials is not only the responsibility of third countries. Europe should also participate in further extraction in order to secure future supplies and retain a certain degree of autonomy in the event of unforeseen shortages. Above all, this requires communicating the benefits of access to national deposits of critical raw materials and involving the local population in the projects.
In Portugal, for example, the mining law was amended specifically for this purpose: Profits from mining, which previously went to the state alone, are now shared by up to half with the local population. A Portuguese-style model could therefore have a positive impact on strengthening domestic production in addition to creating new jobs. The recently discovered Swedish rare earth deposit could thus be an opportunity for Europe to demonstrate its willingness to invest in reducing its foreign dependence.
Given the need for critical raw materials to produce climate-friendly technologies such as solar panels and wind turbines, the costs of local environmental impact should be carefully weighed against the benefits of global emissions reductions. Environmental standards for mining in Europe should therefore be re-evaluated as necessary.
The same applies to environmental requirements in connection with guarantees for untied financial loans. In addition to higher supply risks for European producers, global environmental costs are likely to be higher if mining in third countries is not undertaken by European companies but by countries with significantly lower environmental standards. With a view to expanding European production, harmonization of environmental and social standards relevant to mining could accelerate the revival of the European mining industry.
To address the concerns of potential investors in mining projects in Europe, a three-step approach would be advisable. First, European deposits of critical raw materials should be clearly identified, while relevant areas should be carefully assessed from a security of supply perspective before new commercial or private construction projects are approved. The network of European raw material agencies envisaged under the EU Critical Raw Materials Act (CRMA) could make a valuable contribution here.
Second, planning and approval procedures should be accelerated so that the average lead times are no longer 16 years, as is currently the case. Third, long-term purchase agreements of private companies should be supported by untied financial loans or similar instruments to create financial planning security.
In the long term, European recycling infrastructure for critical raw materials should also be more widely recognized as a possible instrument for reducing import dependency. This goal was formulated in the EU Action Plan for the Circular Economy as part of the European Green Deal. In particular, resource-intensive industries such as textiles, construction, electronics and plastics would benefit from further recycling efforts to reduce procurement costs.
As European Commission President Ursula von der Leyen emphasized in her recent 2022 State of the Union address, a loss of reliable access to critical raw materials would jeopardize both our economic performance and our path to net-zero emissions. In this context, policymakers and businesses alike have recognized that Europe’s dependence on the extraction and processing of critical raw materials by just a few suppliers threatens our prosperity – especially against the backdrop of growing geopolitical rivalries that increase the risk of economic coercion by third countries.
If the mistakes made in the procurement of natural gas are to be avoided, now is the time to act. All eyes are therefore on Brussels, where the European Critical Raw Materials Act is expected to be presented on March 14, 2023.
