Examination of Witness (Questions 140
- 161)
THURSDAY 6 JULY 2000
MR JURGEN
SCHUELER
Mr Rowe
140. May I interrupt for a moment? If 300 or
so have to work in location will that give you the opportunity
to increase the proportion that are locally recruited?
(Mr Schueler) I can only quote this as a possibility.
It has not yet been identified definitely how this will be done.
We have five different categories of officials which work in the
delegations for the time being, normal officials, temporary officials.
Then we have locally so-called technical assistants who are people
of European origin but hired locally to work in local conditions.
That is one possibility. Then we have local assistants in a general
way as they are in all delegations. That is a second possibility.
The disadvantage of these two categories is that they can only
be seen foreseen for implementing purely technical work. They
could not sign a contract, proceed to a call for tender because
they are not within the discipline and statutory framework of
European officials. The third one is individual experts. These
are longer term contracts with experts who are under a certain
amount of discipline and it is that solution which is in particular
examined for the time being.
141. One of the great weaknesses of the world's
development programmes, wherever they are, is that the proportion
of money spent on northern personnel as opposed to developing
the capacity of people within the country is too high and it seemed
to me that this was an opportunity for you to begin as far as
the EU is concerned to change that balance.
(Mr Schueler) This balance is likely to be changed.
The details have not yet been worked out. The high ranking officials
were coming from, in the beautiful French language, a difference
between de-concentration and de-centralisation. De-concentration
means that it is still a Community responsibility but it is done
on the spot. De-centralisation means that the responsibility is
assumed by the beneficiary country. There is a lot of argument
about that, but everything which is de-centralised, it is clear
that it is a field where local employment will have to be incorporated
to a large extent. Structural adjustment policies are a case in
point. De-concentration, which does not involve financial or disciplinary
responsibility, is a second direction in which we are working.
The third direction is that we examine to what extent individual
experts who are providing technical expertise can assume a task,
and this can be local officials, experienced people. We have excellent
agricultural engineers in many of these delegations as experts.
To what extent can they also assume such kinds of management tasks.
It is under examination.
Mr Khabra
142. Would you consider that the local officials
are working more efficiently than the officials brought in from
outside?
(Mr Schueler) There I would really like to reply:
it depends.
143. Because they will understand the conditions
better in terms of agriculture, tradition or whatever.
(Mr Schueler) It depends very much on the case. I
could not make a general statement there. In my previous job I
had inter alia the task of being the Financial Controller
of Delegations so I have seen a big number of them and I have
to say that in many cases the local officials are very efficient,
but it is not always like that.
Chairman
144. Will these local heads of the delegations
be European?
(Mr Schueler) Always.
145. Will they have delegated to them the task
of identifying projects and programmes?
(Mr Schueler) That is the basic idea. The intention
is that the SCR within a year's time would basically be a monitoring,
advisory, evaluation and audit authority. The identification down
to implementation process will be done in the delegations. This
is a process which has to be done in phases.
146. How many of the staff in the delegations
will be SCR staff as opposed to head of delegation staff? The
head of delegation will not be an SCR member, will he—or
she?
(Mr Schueler) The head of delegation will always be
administered by DG Foreign Relations.
147. And then you will have some SCR staff beneath
him?
(Mr Schueler) There are no details so far. This is
something which is under examination, apart from the major orientations.
I can only tell you my opinion is that you would need, according
to the size of the programmes. Indonesia would be a different
case as compared with Surinam, that is for sure. But we would
need a certain number of technicians, we would certainly need
a financial expert, and for the bigger delegations we would also
need legal expertise. I would like to build up the argument from
the functions which have to be assumed.
Tess Kingham
148. But surely the political control and the
political input are absolutely crucial at that level because if
the driving force of the foreign relations angle, with all of
the agenda that they have about a much more trade orientated view,
then presumably it is not just a functionary role; the political
driving of that is crucial to in order to ensure that there is
a poverty focus to the development programmes rather than having
this tension between. Is it a Foreign Affairs agenda or is it
a Development agenda?
(Mr Schueler) Within the person wearing the hat. The
problem is exactly as you have defined it. We have studied very
carefully how the situation is dealt with in many of the Member
States which have this agency approach, such as the Swedes where
there is an agency called SIDA and where the responsibility is
clearly with the head of the delegation. People from SIDA are
purely assuming a technical role. The guiding function is also
with the head of delegation. This requires that the head of delegation
would have a certain capacity concerning development programmes.
Mr Worthington
149. Earlier this week the Secretary of State
for International Development, Clare Short, told us that at the
present time, if you wanted to change a project that is European
Union funded, you needed something like 40 different signatures
on to the cheque to change the contract.
(Mr Schueler) This has been over for something like
a year so that was where some of the running-in difficulties where
of course people were not qualified and officials sought protection.
In most cases the situation as at present is that we have the
task manager who signs. Subsequent to this it is within the SCR
the Financial Manager who has to sign that is available and practical
and correctly instructed and then the contractual signature as
far as the contract is concerned and then the implementation goes
on.
150. What kind of change in speed does that
mean?
(Mr Schueler) On average with 40 signatures it is
a question of estimation but we have a procedure of regular meetings
of these three parts of the game. Every Friday morning these people
meet within the SCR, those who have instructed the projects, those
who have checked the financial aspects and their contractual aspects,
and these are settled the same day. The question is how much time
does it take to prepare the projects. That is one of the weaknesses,
as I said. The identification and implicitly the preparation is
for the time being outside the walls of the SCR. We get it when
the time of contracting starts and we have convinced our colleagues
already now to come together so that we speed up. The normal time
now is from the moment onwards we are doing this every Friday.
When a project is prepared it takes a fortnight until the decision
and the concrete implementation has been signed.
151. I may have misunderstood you earlier but
you seemed to be saying that there were too few financiers and
too many experts in the system whereas the outside perception
has been that there has been a shortage of expertise in particular
development areas.
(Mr Schueler) We are short of financial experts with
a view to what has been done so far. Why are these people needed?
Because in many cases the projects which are presented are still
deficient as far as their presentation in financial terms is concerned
and that is the dreary work of subsidy management. It is the budget
line. It is where the comment within the budget has been well
respected. There is a check list of something like 10 things which
have to be checked by the financial official of the SCR and which
has to be prepared outside within the geographical area and it
is there where mistakes are made and it is within the geographical
area where for the time being there is a shortage of financial
expertise.
152. Not here but out in the delegations?
(Mr Schueler) No, in the field. Take the case of Palestine,
building an airport in Palestine. This means that there has to
be first of all a project decision. That has to be done for the
time being within the Foreign Relations Directorate-General, RELEX.
Subsequent to this the necessary financial amounts, and that is
where finance starts, have to be committed. That is also within
RELEX. Subsequent to this a contract has to be prepared. Within
these groups which I checked so the SCR got this in former times
by way of transmission and then sometimes these 40 signatures
did occur. This has been cut short. Our financial experts verify
the points which are mentioned as far as the financial commitment
is concerned. Our contractual experts verify whether the contractual
procedures were correct, whether the call for tender was correct,
whether the opening procedure, the report, the evaluation and
the attribution were correct. For this the documents are circulated
about 10 days before the meeting. They are checked and the decision
is taken within the meeting. There are cases, and it is there
where there is a lack of financial expertise, where these elements
are not accepted because there is still a contract, very often
where there is a direct attribution, a direct contract, and not
a call for tender. Then there is an enormous amount of time taken.
Mr Worthington
153. But you were talking about mainly big infrastructure
projects. That is the example you gave.
(Mr Schueler) Yes, this is the example I gave.
154. I was talking about, say, social affairs,
education and health and so on. The perception is that there are
not enough experts in the EU on those kinds of developmental issues
and that these are the projects that are held down by bureaucratic
nitpicking.
(Mr Schueler) This I take as a message. As far as
education is concerned there are a number of people. Education
is a very important area dealing with it. I have not yet been
confronted with the criticism that from the point of view of development
contents these projects were deficient. I would not exclude it.
At the point where the SCR comes in at the present time the identification
of projects is not our business. If there are problems at that
stage we did not pronounce ourselves so far on opportunities whether
such an aid is appropriate or another should be there. The identification
is not within our business and to the extent that there were critics,
the SCR cannot be the addressee. For the time being the SCR comes
in only when the implementation of financing. Even the commitment
is done outside, ie, the payment has to be done and before that
the contracting.
155. But there is heavy criticism of the European
Union from NGOs, say, in reproductive health or education, that
they get a commitment that the money is going to come but that
at their own financial risk they have to wait sometimes years
for the actual disbursement of the money. The reason for that
is about financial controls. Is that not true? Have you not met
that criticism?
(Mr Schueler) This criticism we did meet. The points
which have been mentioned, there were delays because there were
problems concerning the presentation of accounts, the costs really
incurred, whether there has been a co-financing, things like these.
These things in general terms we try with the system which I presented
to you to be as quickly as possible but there are also within
these procedures points where there are weaknesses and deficiencies.
The European Court of Auditors is for the time auditing the management
of our finance towards NGOs. We are very curiously looking forward
but they will have to say. The very fact of being continuously
supervised leads to the consequence that the officials are very
keen on having respected elementary rules of regularity, of accountability.
Very often it is a question of the accounts. It has to be seen
on a concrete basis. The question whether tendering procedures
have to be applied and, if so, whether they have been correct.
There have been long discussions whether a financial guarantee
is appropriate or not. There we have taken a much subtler position.
Chairman
156. Are you changing that? One of our absentee
members has asked about the guarantee question. Is it still the
case that you require the NGOs to have a bank guarantee?
(Mr Schueler) A bank guarantee is a financial guarantee
and to my memory, but if you can give me the precise question
I can reply in writing, I think it is from two million or from
six million euros onwards. There is a limit.
Chairman: It is the last paragraph after
the questions. Perhaps you can come back to that when you have
read it.
Mr Colman
157. My question in a sense comes back to NGOs
because I am assuming that the TAOs are actually NGOs just by
another description and the proposal to disband the TAOs. It seems
very counter-intuitive, one might argue, that somebody from a
financial background, and I come from a business background, that
all over the world areas are being outsourced so that you can
have a situation where in a particular area that has been outsourced
you can have competitive tendering, you can ensure that that particular
is being outsourced, and if you do not want it in the future it
is much easier to close it down than if the staff were employed
by you. It is much more efficient. You can measure them much more
easily in terms of what they are delivering. Is the reason why
you are seeking to disband the TAOs simply because this is an
easy way not to have to go back to get extra money from the Member
States and increase the budget line as it were, or is it because
the TAOs, which I assume are NGOs,—they seem to be a very
shadowy group of people—are performing badly? If it is because
they are performing badly surely the thing is frankly to re-tender
the contract and get them to perform better? Which is it? Is it
because it is an easy way to avoid having an increase in the budget
or is it because the TAOs have performed very badly and, if so,
why not re-tender?
(Mr Schueler) I am grateful for this question. Basically
there are two elements in this. On the one side the distinction
between TAOs and NGOs, and on the table which has been circulated
you will see that NGOs, members of civil society which are numerous
in the world and the most famous are known to everybody, the World
Wildlife Fund or different human rights organisations and so on,
are not concerned by the dismantling of the technical assistance
offices. The distinction has to be drawn between non-governmental
organisations, members of civil society, and technical assistance
offices. That is the first element. The second element is that
technical assistance offices, most of them, if you look at the
list—I do not have all the details present now—are
consulting offices. The technical assistance offices have been
hired for special management tasks. An area which was of particular
concern was the Mediterranean area. The critique towards the technical
assistance offices to be very clear came mainly from the European
Parliament. It was the very fact that in the Mediterranean area
there was a network of technical assistance offices which were
heavily criticised for their financial management by the European
Court of Auditors. It became one of the problem cases of the Santer
Commission. The critique was mainly that the rules of competition
were not respected, that there was an inadequacy of what has been
provided and what has been contracted. It was a long and difficult
conflict of interest, lack of controls. I remember the things
now from hindsight. It is a couple of years ago. That was one
case. There were other cases in the area of humanitarian aid,
the technical assistance offices concerned maybe had the beautiful
name PERILUPS. The situation has been that the acceptance of the
new Commission was made dependent on a change of the co-operation
with external expertise.
158. Why not sack them all and re-tender?
(Mr Schueler) And dismantling this approach. The key
of the approach, I think I have to draw your attention to it because
it is a key point, was that these technical offices did assume,
to the understanding of the parliamentarians concerned, and the
parliamentarian leading this was a French one, Bourlange. His
basic request is that within this framework of technical offices
there have to be officials who assume the disciplinary financial
responsibility of what is managed within that area of outside
expertise. He has created, and he has suggested, which is still
in discussion, a model of external aid agencies which would be
composed of a few officials and external expertise around. He
called them external entities of financial assistance, in the
jargon called "Bourlangettes". I am just reporting this.
This is something that you might wish to discuss with the Commissioner.
The Commission was in a situation of very serious political pressure
when it had to be accepted and stored by the European Parliament
about this particular question inter alia.
159. So you are doing it because of the corruption,
because the European Parliament pushed it, not for any financial
reasons? You accept that this may be more expensive and less helpful
to delivering the programme?
(Mr Schueler) There is a financial difference but
which would not have justified such a radical approach.
Chairman
160. I am going to have to stop our conversation
now because we have run out of time. I know I am going to be in
trouble on my right, but we have to keep to the timetable. We
have already kept you longer than you anticipated. We will have
to look after some of the questions which we can raise with Mr
Nielson this afternoon because I imagine he is as concerned as
you are with the SCR programme.
(Mr Schueler) Yes. He has a special responsibility
for the SCR.
161. It remains to me to thank you very much
on the part of the Committee. We are very interested in this detailed
work that you carry out. In your work lies the real future of
the efficiency of the new approach and we want you to be successful
and we hope you are. Thank you very much.
(Mr Schueler) You have got my arguments. I am grateful
for your attention. I am grateful for your questions. Some of
the messages brought a new emphasis to some of the problems and
to the extent that you wish additional information my colleagues
or myself will always be available.
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