Examination of witness (Questions 240
- 259)
TUESDAY 27 JANUARY 1998 (AM)
MR HARM
ROZEMA
240. Yes. You just said that the Parliament
does not have too much power in this direction.
(Mr Rozema) The mechanism procedures are the following.
First of all we start an inquiry. I must say that there is a good
chance that during the inquiry people in the Commission may become
more aware of certain types of problems. In a number of cases
they may already start to introduce changes. In some of the replies
from the Commission, when at the end the report is there, you
can see they say that what the Court says is not true because
the situation is such and such. Then we say that at the time of
our audit it was true. That is the first informal reaction or
informal effect. The next one is that we present our draft report,
in what is called a contradictory procedure, to the Commission.
That procedure has the objective that in the case of mistakes
or misinterpretation on our side we can still correct our text.
That is the first formal part of the procedure and that can lead
to certain commitments by the Commission. The problem here is
that the Commission do not like very much to say in their reply
that the Court is completely right. They would find a formulation
for it. In many cases you would see a text containing a certain
amount of padding and then they would say that the Commission
have taken note of the comments and will take action, or something
like that. The next steps are that it is discussed at the level
of a Council committee which deals with European Development Fund
affairs. The Council can push the Commission in certain discussions
but my feeling there is that in public there is not very explicit
support. It is more an informal discussion between that committee
and the Commission. In the last resort it would be the Parliament
which can push the Commission to take action but the possibilities
for the Parliament are extremely limited here.
241. In that case should the Parliament's
role be strengthened in your view?
(Mr Rozema) My personal opinion is that the Parliament's
powers should be strengthened. This relates to the big discussion
in Parliament about the budgetisation which is very political.
Mr Robathan
242. You mentioned the dam collapsing into
the swamp and that being the fault of a wrong decision. Presumably
you did an inquiry into this or a report on this?
(Mr Rozema) If I remember correctly, this was
in the context of that old approach and this example should be
in the report.
243. Was anybody held responsible for the
decisions which were unwise and which led to a waste of money?
(Mr Rozema) As far as I remember, that question
has not been asked by the Parliament or by the Council. I cannot
explain, I cannot tell you why not, but there certainly have been
internal discussions in the Commission and I think certain Commission
services were to blame and the Commission was of course not tempted
to make that public.
Ann Clwyd
244. I have to say that I am a former member
of the European Parliament so I believe in strengthening the role
of that Parliament in all sorts of ways. How would you strengthen
the role of Parliament in particular as far as monitoring Lomé
is concerned?
(Mr Rozema) In the present context of Lomé,
I find it very difficult to see the instruments which Parliament
could use. If I compare it with the budget, where in general the
European Parliament's powers are limited too—but that is
another thing—at least for the budget Parliament has certain
possibilities and certain influence on parts of the budget; they
can really have influence. They can push, they can block budget
lines, they can change budget lines, they can reduce it, they
can increase it and so on. All those instruments which are very
effective are not available in the context of Lomé. There
in the whole decisionmaking process about allocation of funds
Parliament does not have any say. The only stage where Parliament
comes in is annually at the very end for the approval of the accounts.
Parliament could refuse to approve the accounts and then some
people ask the question "And so what?".
Mr Grant
245. I am indebted to you for what you have
said. The impression is always given that there is all this tremendous
corruption in these ACP countries when it seems as though the
bureaucracy makes quite a lot of mistakes and creates problems.
On the occasions where there might be problems with ACP countries
in terms of the financial undertakings, do you actually give them
advice? Do you speak to them and try to ensure that the way in
which they do their returns is acceptable?
(Mr Rozema) When we are on the spot of course
we speak to them. In each of the ACP countries there is a national
authorising officer and we will certainly speak to the national
authorising officer or with his staff. We would also speak to
those people who are involved and responsible for the execution
of certain projects. Let us say we would speak to representatives
of the Ministry of Agriculture when there is an agricultural project;
for roads or infrastructure it would be the Ministry of Public
Works. When discussing such one would in a number of cases give
some advice but it is not structural advice. Here there is a little
bit of a limitation. The Court of Auditors audits the Commission
and the Commission's management. The Court of Auditors is not
allowed to audit the ACP countries and the ACP countries' management
which in my personal opinion is a bit odd. When the Lomé
spirit is of co-management, then by definition if and when you
audit the implementation of programmes and projects you would
audit both sides. I am not quite sure whether your question included
this point but giving structural advice to ACP countries is something
we do not do.
246. Do they take the informal advice you
give by and large? Do they cooperate with you?
(Mr Rozema) I do not know. The problem here is
that I must admit that our follow-up of what ACP countries have
done is almost absent, given the relationship. Also, were we in
a certain ACP country regularly, once every two years, then we
could do a follow-up. When we are there once every five or six
or seven years it does not make sense any more; in the meantime
too much has changed.
Ann Clwyd
247. What conclusions has the Court come
to on the effectiveness of the EU delegations in making decisions
and spending money?
(Mr Rozema) The position of the EU delegations
is an important one. There are tendencies to change that position.
To start with: the delegations represent the Commission in the
ACP countries and the whole picture gives the impression of an
extremely decentralised system, which it is not: it is a fairly
dispersed system by definition but it is very centralised. That
means that delegations' powers are extremely limited. Where does
the delegation come in? The delegation or delegations come in
at the level of the preparation of programmes and projects where
they have an important job to do, which they can do with the contacts
they have on the spot. Then at the end the approval of such projects
has to be done by Brussels. That means that there is quite an
intensive review at headquarters and there can be situations where
certain proposals made by ACP countries and endorsed by a delegation
are changed because there can be either financial considerations
or political considerations or practical considerations why things
are changed. It means that you cannot isolate the effectiveness
of the delegations there. It is a joint effect where in the end
most of the responsibility is taken by headquarters. It is a bit
the same when you come to the next stage where you have the contracting
procedure, especially for the big contracts where you have a tender
procedure. Again the whole proposal is done by ACP countries together
with the delegation and then it is reviewed and approved by headquarters
and then it comes back to the ACP countries and the whole execution
of the tenders is basically an ACP country affair with intensive
assistance from the delegation. At the level of payment, the delegation
has certain power to make some payments but it is limited either
to payments in local currency for the ACP or, in certain exceptional
cases, to accelerated procedures where headquarters had given
specific agreement that delegations could endorse European currency
payments for the project. The powers are extremely limited.
Chairman
248. Would greater decentralisation of the
staff and decisionmaking of EU delegations, giving more power
to those in the field, increase the effectiveness of European
Union aid and the speed of its disbursement?
(Mr Rozema) I do believe that it would increase
effectiveness. I believe sincerely, and there is a tendency towards
decentralisation according to a new financial regulation for the
ACDF already, that greater decentralisation is necessary so that
delegations would have more decisionmaking powers, the decisionmaking
would be closer to the beneficiary country and there could be
an effect of quicker disbursement. On effectiveness, another important
role of the delegation is a monitoring of the projects, just technical
monitoring. There the picture is different in the sense that if
you happen to have a good delegation and good staff in the delegation
you have excellent monitoring and if there is a combination of
weaknesses the monitoring will be weak.
Dr Tonge
249. It all sounds very slow and bureaucratic
to me so far. I cannot get any sense of urgency in this. How efficient
do you think the current system is for disbursement of funds?
Once a project is decided upon how efficiently does that process
carry on?
(Mr Rozema) Compared with normal bilateral aid
one may say that it is in many cases not so efficient. There are
quite a lot of players on the scene and the whole set up takes
quite a lot of time. For instance, tender procedures have a reputation
for taking quite a lot of time. You have to prepare it. You have
to do an international tender. The possibilities for restricted
tenders for a limited number of companies are usually not so important
as for bilateral aid where you basically can address yourself
to a certain number of firms in the home country, which is often
done and which is not the case for European aid where you have
to widen your scope. It simply takes more time. In terms of the
players, we have a situation where the ACP countries do play a
comparatively active role in preparing tender files. The delegation
has to endorse it in the end. If they agree, then the next step
comes in which is the review and approval by the central services
which is an additional step which simply takes more time and it
can take quite a lot of time. In terms of payments, apart from
some direct payments, let us say "Stabex" payments and
so on, the bulk of all payments is and has to be approved by the
national authorising officer. When contracts are signed, they
are not signed by the Commission usually. They are signed by the
national authorising officer and are signed by the ACP countries
which also makes the whole procedure for payment go logically
through the national administration. If one talks about lengthy
procedures, the consequence of the co-management of the Lomé
is that you often need a full procedure at the level of the ACP
state—bureaucracy number one—and bureaucracy number
two is a full procedure at Commission level. One should not ignore
the time which is taken before approval for payment is given in
an ACP state.
250. How can that be improved? It just sounds
awful. The people it is meant to aid will be dead by the time
they get it.
(Mr Rozema) Do you mean how can it be improved
in an ACP state or in general?
251. In general. It just sounds so ludicrous.
(Mr Rozema) There are two ways. We spoke about
a more powerful delegation. If you were to delegate more power
for payments to the delegation you would shortcut quite a lot
of procedure in Brussels. That would accelerate payment. The other
way is that one should improve the administration, accelerate
the procedures, at the level of the ACP countries. Then we come
to the problem of the improvement of institutional capacities
in the ACP countries.
252. When a project or programme is being
prepared, how clear is the targeting at both ends? How precise
are these projects?
(Mr Rozema) It depends how you define what the
target is. A good example is a road. Let us say a road should
be constructed. What is your target? The construction of 420 kilometres
of road. That is clear and that is simple, comparatively simple.
When your target is—what you would find in the financing
proposal and financing agreement—for the opening of a certain
region and developing a certain region and having feeder roads
so that farmers have access to the market and so on and so on,
then the targeting is almost absent. The region should be opened
and the farms in the region should be developed or should have
access to the market or something like that. That is not very
clear targeting. When you find in some documents—and I have
read some myself—that the conclusion is that 70 per cent
of infrastructure projects, amongst others roads, are effective,
then one should ask the question: effective in relation to what?
Effective in the sense that you have constructed the number of
kilometres of road which was in the programme. That is effective
but in my opinion that comes close to efficiency. Whether it is
effective in developing the country, that question has not been
answered.
Chairman
253. You are not asked to ask it, are you?
(Mr Rozema) To reply to the question, sometimes
there is a kind of an indicator of development which is the increase
in traffic on that road. Often it is said in the financial proposal
that they have measured the traffic on this track and it is so
much, so many cars, so many that, and they believe it will, say,
triple in a couple of years. On such an occasion after a certain
road was finished, a project in Lesotho, I spoke to the people.
I said that in their proposal it was mentioned that after a couple
of years the traffic would double so what was the situation as
a matter of fact on traffic. They asked what I meant. I asked
whether they measured it. They did not. This is a simple one.
If people do not even measure such things and do not have a clue
what happens, then you can ask the impact question and I can give
you the answer. Ask what has been the impact of this road on the
development of this region or country and they do not have the
slightest idea. This is a difficult question though.
254. If I wanted to avoid your questions
and make certain that you lacked impact or effectiveness I would
not actually closely define my objectives if I were in the European
Union Commission, would I, so you could not actually assess whether
or not we had achieved our objectives? If you do not put proper
objectives in you cannot measure against them.
(Mr Rozema) Thank you for the weight you tend
to give to the Court of Auditors. I do not think the Commission
thinks that far. This is one of the problems which is very, very
general for all donors. The whole approach for EDF, British aid,
Dutch aid, Swedish aid, all aid has been input driven. All the
donors are perfectly able to say they spent so much money on health,
so much money on education, so much money on infrastructure, etcetera.
They could also in a sense tell how many health centres were built,
how many houses were built, how many kilometres of road were built
and fullstop. However, donors are not able to tell anybody about
the real impact of the aid. Then one could ask whether there was
a need, whether the beneficiaries really wanted to know what the
impact was, whether the donors really wanted to know what the
impact was. I do not know. I have some doubts.
Mr Khabra
255. You talked about contracts. Are there
any rules that these contracts must be open for international
competition? Is there any scope for the national companies as
well?
(Mr Rozema) I am not quite sure of the amounts
but according to the regulations you are obliged to have an international
tender, open tender. An international open tender is open to companies
of the member states and companies from ACP states. The United
States of America would not be eligible to tender for example
and New Zealand would not be and so on.
Ms King
256. Could you tell us whether the Court's
reports have commented on the actual monitoring of Lomé
programmes and on the measurement of their impact?
(Mr Rozema) The monitoring is in a sense linked
with impact: if you do not have the monitoring, if you do not
have the information you need for monitoring, then forget about
impact measurement. Our findings have been that information on
the basis of which you should be able to do monitoring is fairly
scarce and not very transparent. I have seen one case, an agricultural
project, where the project had started to do an extremely good
monitoring exercise on the extension and the effect of the extension,
where some thousand farmers were given a simple questionnaire
three times a year about their intentions, what they had done
and what the results were. That was done over a number of years;
some of the farmers participated, others dropped out, others came
in. I was in the offices and overall they had an enormous number
of files full of those questionnaires, extremely important monitoring
information. I asked what they had done with all that information.
The answer was: nothing. That was the saddest story. I am serious
about it because in most of the projects by far you would simply
not find that information. In the one exception where there was
information it was not used.
Mr Robathan
257. When we are talking about the measurement
of impact, you have already discussed coordination of programmes
and coordination of objectives. I have been contacted recently
by at least two organisations, one was the WWF, the Worldwide
Fund for Nature, about the environmental impact of some EU projects.
The specific one which was mentioned was a road through the Colombian
rain forest, which I know is extra-Lomé, but as regards
Lomé, do you take account of the environmental impact as
well if you are writing a report?
(Mr Rozema) I would say yes. Sometimes we are
in a bit of a difficult position but the environmental aspects
became very explicit in Lomé since Lomé IV; it started
a little bit in Lomé III but it really started in Lomé
IV. It is not only a question of whether we would, we do have
to pay attention to it. The Convention is a framework and when
a condition or one of the important considerations is the environmental
aspect we have to look at environmental aspects. In some cases
it is not so relevant. If you build a small health centre then
it is not: if you build an enormous dam it is obvious. In Lesotho
for instance there is an enormous highland water project where
water is pumped from one river into another river in the middle
of South Africa. We paid attention to it and I must say that a
study made and financed by the EU for that project paid an enormous
amount of attention to the environmental aspect. It was about
seven years ago and was one of the first studies where the environmental
aspects were comprehensively examined before starting a project.
258. Would you be satisfied generally with
the environmental aspect?
(Mr Rozema) No, generally my impression is that
in quite a lot of infrastructure projects environmental aspects
are looked at but it is not very explicit.
Ms King
259. Could you tell me what you believe
the impact of Lomé programmes has been on poverty specifically
and on women?
(Mr Rozema) The simple answer is that I do not
know and nobody knows. The whole poverty reduction scene is a
kind of reorientation in awareness of a certain problem and in
the context of the awareness of the problem of poverty where the
differences become stronger and in absolute terms the number of
people under a certain level increases, that one should be more
explicit in focusing aid to the poorest in the world. Of course
that is a worldwide discussion and when that discussion started
the question was also asked about what we had done for the poorest
and then the question of what the impact had been on the poorest.
As a matter of fact very little was known about that. One of the
aspects of the whole item of poverty alleviation is that in the
context of poverty alleviation great attention should be given
to targeting, to be very precise, on the object of target groups
and what should be done and how it should be measured. I think
donors have become aware of this problem in general fairly recently,
say three, four, five years ago; not more than that. We all know
that in many cases in that cold war situation blind eyes were
turned to certain developments and one was not too eager to point
out that certain actions had had no impact. When I say that nobody
knows what the impact has been, that does not mean that EDF never
paid attention to the poorest. When you look at the projects in
the Convention itself and also when it is translated into projects,
quite a lot of priority is given to health projects and to primary
education projects; quite a lot of attention is given to agricultural
projects and rural development. There are loads of problems with
that. Rural development is so complicated, so scattered, that
it is almost impossible to manage; we know that now. Most of the
actions were focused on the poorest farmers and whether there
was extension or whether there was introduction of animal traction
or whether there was introduction of credit lines, often it was
focused on the poor farmers. Even when it was not always clear
because you had an area of let us say 10,000 square kilometres,
you had to do something. Then the target group was not always
very precise and the targets were not always precise: it was to
reduce poverty or to increase etcetera.
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