Select Committee on International Development Minutes of Evidence


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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