Issue description
Voluntary agreements between authorities and industry are usually not formed on an individual company basis but with a sector of industry. Agreements can be used instead of legislation, where legislation can not be made enough targeted. Within the EU voluntary agreements have been introduced. So far two agreements have been made between the Commission and ACEA representing the motor vehicle industry.
The individual motor vehicle manufacturing companies are committed by the agreement. As the agreement is voluntary with a collective commitment there are no sanctions in case of a non performance of one or all of the companies. In order to arrive to an agreement or to challenge industry to stick to the agreement a"threat" of legislation is used against industry.
Impact on the Volvo Group
When the industry sector to which Volvo belongs is a contracting party to a voluntary agreement there is a direct impact on Volvo. Volvo being committed to the agreement is then not only dependent on its own performance but also on the performance of its competitors.
Volvo Group's position
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On one hand voluntary agreements can give industry more flexibility and predictability than a lengthly legislation process in the EU. Also, the companies committed by the agreement can influence the content.
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On the other hand an agreement that commits several companies collectively can cause competitive problems. A company’s indivual performance is then dependant on its competitors performance in a burden sharing scheme. Depending on the content of an agreement and the parties involved advantages and disadvantages vary.
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A Volvo position must therefore be taken on a case by case basis.
2003-03-07 Public Affairs