Select Committee on International Development Appendices to the Minutes of Evidence


APPENDIX 9

Memorandum submitted by Mrs Glenys Kinnock MEP

INTRODUCTION AND OVERVIEW

  1.  The European Commission is committed to a radical restructuring of the management and organisation of its work. A very high priority is being given to reforming the way external assistance is given. As Commissioner Poul Nielson acknowledged in March 2000, "Reform is important for the Commission as a whole. But reform is a question of do or die for the Commission's external aid."

  2.  The European Commission has received criticism from national governments, NGOs, international organisations, the European Court of Auditors and the media in the area of external relations and aid. The criticisms were often well founded and the proposed reforms respond directly to many of the problems identified. The time has come to give the appropriate support to the work of the European Commission, and to give it the resources and authority to prove the added value which European Community aid can bring to development co-operation.

  3.  In May 1999 the German Presidency asked for an overall statement on development from the Commission. The result is a recent document that contains some positive elements—on quality, complementarity, selectivity, and most importantly, poverty focus. However, there remains a lack of coherence and consistency in the document on goals, objectives and targets. The document does not yet make clear policy proposals or define adequately the Commission's vision of the contribution it wishes to make to international development in the new millennium. This Communication should, however, be seen as only the start of the process to produce an overall EU development policy statement. Consultations with civil society and the European Parliament will continue and should be improved. It is expected that a joint overall policy statement will be adopted by EU Development Ministers and the Commission at the next Development Council meeting in November 2000. This should be followed by an Action Plan to implement the conclusions. The European Parliament will expect to be directly involved in this process.

  4.  On 16 May the College of Commissioners approved a plan to create a new office, named `Europe Aid', to improve the delivery of EU external assistance. Under the new arrangements DG Development will continue to be responsible for strategy and country programming for the African, Caribbean and Pacific countries and humanitarian aid. The European Commission Humanitarian Office (ECHO) is unaffected by the reform plans. DG External Relations will be responsible for EC programmes in the Mediterranean, Asia, Latin America, the Balkans and the former Soviet Union. However, strategy and programming will in the future need to be approved by the whole Group of RELEX Commissioners: DG External Relations, DG Development, DG Trade, DG Enlargement and DG Economic and Monetary Affairs. The new Office will be responsible for project and programme identification, appraisal and implementation, and will have Commissioner Chris Patten, DG External Relations, as its Chairman and Commissioner Nielson, DG Development, as its Chief Executive. We still require clarity on the precise roles of Commissioners Nielson and Patten, in particular how their named responsibilities will match up to the services under their control. A new Quality Support Group (QSG) will be responsible for quality control across all EC development programmes. It will have a secretariat in DG Development and will report to the RELEX Group of Commissioners. The precise remit of the QSG is as yet unknown but should include a reference to ensuring policy coherence with the EC's development objectives. It is not yet clear what access and involvement the Parliament, NGOs, experts, and other representatives of civil society will have in the QSG. A new evaluation service, independent of any one DG and reporting to the RELEX Group will also be established.

  5.  Although the "Europe Aid" reform proposals are meant to embrace all aspects of EU external assistance, the Communication on the Reform of the Management of External Assistance claims that, "In external relations the key policy objective is to ensure a stable and enlarged Europe with a stronger voice in the world. " The paper does not once mention the word poverty—despite the central focus of the EC Development Policy Statement being the reduction of poverty—and there is no reference to the Amsterdam Treaty's primary objectives of combating poverty, and fostering support to the world's most disadvantaged countries. There is also no mention of the International Development Targets in the document. The efficient management of EC aid is not an end in itself. The achievement of the EC's development objectives should be a clear and stated aim of the reforms.

  6.  Both initiatives have the potential to radically improve the management, implementation, and quality of EU development co-operation, but only if they are part of a conceptual framework which has poverty reduction at its core. Assuming that this is achieved the pressure will then be on Member States and the European Parliament to support the plans and provide the Commission with the resources it needs. The warning given by Commission Patten is a severe one. If the Commission does not get support from the Council of Ministers then up to two-thirds of the EU's aid budget will be impossible to administer and, "the Commission will be obliged to scale existing programmes back to what can be managed properly. It's not a question of fraud or incompetence. We have excellent staff but the fact is there aren't enough of them to do the job effectively. " Commissioner Chris Patten, 17 May 2000. This is an understandable threat from the Commission. However, the stakes are high when this may be exactly what certain Member States want to hear.

  7.  There remains a worrying lack of clarity about what will happen to the Commission's work programme and disbursements during the whole reform process. It could take up to two years to get things in order and until that time it is not yet clear who's doing what and where responsibilities will lie.

Concerns about the marginalisation of development

  8.  There needs to be a synergy between development co-operation, trade and political action. The Commission wants to develop a "culture of collective management" but the Development Committee of the European Parliament and NGOs are concerned that the EU's external assistance will be increasingly dominated by political and strategic priorities in Eastern and Central Europe, the former Soviet Union and the Mediterranean countries. Breaking down the traditional barriers is theoretically a good idea but could, in practice, lead to further domination of the issues and their priorities by the RELEX framework. We accept that international co-operation has changed everyday needs and that the EC needs to be a credible global player and donor. However, we do not want to see development marginalised in that process. We want our partner developing countries to be consulted, and included, and the Development Directorate-General needs to have the capacity to represent the interests of those countries and their governments and people.

  9.  The ACP-EU Partnership Agreement signed on 23 June in Cotonou, Benin provides for the start of negotiations by 1 September 2002 on WTO-compatible regional economic partnership agreements, or other WTO-compatible arrangements. These arrangements should take account of the level of development and the socio-economic impact of trade measures on the African, Caribbean and Pacific countries. With all DG Development trade specialists transferred to DG Trade, and the emphasis in DG Trade on trade liberalisation rather than development, a crucial question arises as to how the Commission will organise itself to prepare and carry out negotiations with the ACP with a view to meeting these specific development objectives. In particular, what will be the responsibilities and relationship of DG Trade and DG Development in this process?

  10.  The criticisms of the EC's aid programme are well documented. The OECD's Development Assistance Committee (DAC) peer review of 1998 found that as a result of the organisational structure of the Commission, EC development policy tends to be fragmented and incoherent. The Commission was criticised for being insufficiently focussed on implementation and results. The DAC review did however acknowledge that over the past four years the Commission has started to address these issues, although it will be some time before we will be able to properly assess the impact of the changes being implemented.

  11.  Clearly the credibility and legitimacy of the European Union's external assistance is at stake here. However, just as a sense of urgency can help clarify the choices that have to be made, for example, the setting up of an internal "Office" rather than an external "Agency", it can also lead to reforms which pay less attention than they should to certain critical issues. We should not risk marginalising development concerns in Europe's overall political priorities, neither should we neglect the need to consult local players in the organisation of new procedures. It is also important that the process ensures that the evaluation of the whole project cycle is not only possible but is also encouraged.

Impact of the proposed reorganisation

  12.  The suggested reforms are logical and comprehensive, and there is a serious intention to create an interface between the staff involved in programming and implementation. Eighty per cent of the EU's external assistance programmes will in the future be managed by the new "Europe Aid" Office—ending the current system whereby projects are identified by Commission Directorates but actually implemented by the Joint Service for External Relations (SCR). The SCR became operational in 1998, and whilst limited improvements have been evident, including considerable simplification and harmonisation of the main procedures for aid delivery, it is clear that the current division of tasks between the SCR and the Directorate General's is not working and it is reassuring that the Commission is now looking again at how to improve disbursement rates.

  13.  The proposal to devolve powers to EC Delegations in the field is very welcome indeed, and many of us in the European Parliament have argued for this for some time. As Commissioner Nielson noted, "Why call them Delegations if we never delegate anything to them. " It has been Member States which have been resistant to the idea, because they want to micro-manage the process. There is a failure to understand that the consequence of being unwilling to give the Commission more authority is that the changes they always say they want to see simply can't take place.

  14.  As implementation is decentralised from Brussels it is vital to ensure that each Delegation is adequately staffed with specialist expertise, including gender specialists, officials with experience of the latest in participatory techniques and development thinking on human development and social sector support, and staff with the necessary skills to manage relations with donors, NGOs and civil society organisations, national governments and bodies and the International Financial Institutions. Delegations need staff with the necessary skills to facilitate the effective implementation of Country Strategies. This will include the recruitment of national experts able to identify priorities. The current situation in the Delegations is completely untenable and the to-ing and fro-ing between them and Brussels with project proposals, and requests for financing, simply cannot continue. The Commission will also need to strengthen its training and secondment programme. New systems of accountability and control must be put in place and the European Parliament and Member States will have an important role to play in monitoring.

  15.  It does not make sense for the European Commission to be emphasising a project driven approach to co-operation at a time when all other donors are moving towards providing budgetary support to sectors identified in broad national country strategies. For example, DFID's funding of the Ugandan Government's strategy to develop the country's basic education sector. This approach puts the national government firmly in the driving seat. It would also reduce the demands on Commission staff and on national government officials who would only have to work within one coherent framework.

  16.  The reforms will also cut back on control and audit processes which are time consuming and unnecessary. It is hoped too that Member States will discuss reforming comitology because this is a level of bureaucracy which is completely unsustainable. Member State management committees should concentrate on strategic issues and should assume more accountability for the EC's aid programmes. I would also emphasise the need for improved and regular dialogue with the Member States.

  17.  With regard to comitology, the European Development Fund's (EDF) complex and bureaucratic administrative procedures, both in Brussels and at Delegation level, have always been a stumbling block to effective implementation of funds. Indeed, the European Court of Auditors has called for the whole set of EDF regulations and internal rules to be examined to assess their appropriateness. Under pressure from the European Parliament, a Council Decision was taken in June 1999 to simplify implementing committee procedures, unfortunately, this does not apply to the EDF committee because of its special inter-governmental nature. It is also not clear whether the Council's Decision on increased transparency can be applied to the EDF committee. Simplified procedures and transparency should be applied to the EDF committee.

  18.  In my view, the possibility of a "rolling implementation" approach should be considered. This would increase the likelihood that proper monitoring of the impact of the reforms can take place. Rushing headlong into changes which are good and proper but don't work in practice would be unwise.

  19.  The real test will be implementation. This will involve careful management of the move from the current crisis management approach to a new and improved system. It will be a difficult and very complicated process, and the difficulties should not be underestimated. We need to be clear on how such far-reaching reforms will be put into practice. The intention is to mainstream poverty, introduce multi-annual programming, use complementarity as a management tool and speed up implementation without losing the quality of programmes. This is a tall order which will require an investment of interest from all the institutions of the EU.

  20.  The new ideas also face difficulties from the political and bureaucratic resistance which, by definition, the change will meet.

Acute staff shortages continue to hamper the effective delivery of aid

  21.  Acknowledging the severity of the problem, Commissioner Chris Pattern announced on 16 May, "We cannot go on as before. We cannot commit money we cannot spend. It is dishonest and incompetent. What is the point of raining down commitments like confetti if you can't deliver on the ground?"

  22.  Until the 1990s, EU development co-operation was concentrated on African, Caribbean and Pacific countries. Today the EU influences the lives of millions of people around the world through its trade agreements, its policies on aid and agriculture, its growing influence in international institutions like the World Trade Organisation, the International Monetary Fund and the World Bank, its common foreign and security policy and through Foreign Direct Investment. In total EU Member States and the European Community provide 55 per cent of all international Official Development Assistance and more than two thirds of grant aid. The EU is one of the world's biggest donors of food aid and is the major trading partner of most African countries. Its network of delegations and offices throughout the world ensures an EU presence in 128 countries. The European Commission is now responsible for more than 10 per cent of world-wide spending on development assistance—up from 5 per cent in 1985.

  23.  However, as the demands made on the Commission have grown, EU Governments have failed to provide the extra staff to cope. The Commission is being asked to deliver too many things too quickly and on too many fronts. According to one Commission official, "The assumption in the Council was that somehow the Commission will always manage." Whereas EU Member States, or the World Bank, have between 4 to 9 officials for every 10 million euro of aid managed, the Commission has 2.3 officials. In the last ten years the EU's aid programmes have trebled but staff levels have less than doubled. Projections of staffing needs in the Commission now suggest a shortfall of 1,300 posts. The estimated annual cost of sub-contracting the work to about 80 private firms, which each employ around 80 people, is 170 million euro—equivalent to about 80 per cent of what the Commission spends on all its Delegations world-wide in one year.

  24.  The Commission as a whole has fewer staff than Clwyd County Borough or Leeds City Council.

  25.  The Budgetary Authority must give the Commission the resources it needs to manage funds to the same, or indeed higher, standard as comparable organisations in terms of economic and political weight. One Commission official said, "I think the sums set aside for the Human Rights Budget Lines are absolute peanuts compared to the needs. "

  26.  The Commission's staffing problems are not only quantitative. The vast majority of the Commission's staff are highly competent and highly motivated, but all too frequently they are frustrated by outdated procedures and burdensome red tape. The Commission has recognised the need to take action to address this problem. Commissioner Chris Patten is taking steps to improve these working methods in the area of external relations and development co-operation, and the Commissioner for Reform, Vice-President of the Commission, Neil Kinnock, is pushing a broad reform of management and personnel throughout the Commission, which will modernise working methods, increase staff training, improve management and ensure a better match between tasks and resources. These reforms will also introduce more effective mechanisms to deal with those—albeit a small minority—who fall below the standards we expect.

STAFFING OF THE EUROPEAN COMMUNITY EXTERNAL CO-OPERATION PROGRAMMES
Directorate General OfficialsExternalStaff (d) Total StaffAreas of responsibility
Headquarters1,796 3752,171
DG RELEX (a)
(Chris Patten)
662 107769Relations with NIS, Mediterranean, Middle East, Latin America, Most Asian developing Countries,

Obnova Programme (Reconstruction in Former Yugoslavia), Programming and project preparation within the TACIS, MEDA, and ALA programmes

Human Rights & Democratisation policy, planning & budget lines, CFSP, Management of external delegations, information for delegations
DG Development
(Poul Nielson)
346 48394Overall development policy & all development related issues in all parts of the world, ACP, South Africa, Lome & post-Lome Conventions, NGO co-financing budget line, Non-emergency food aid budget line, Health, HIV/AIDS, Gender policy, planning & budget lines, Relations with international organisations, Integration of sectoral policies
DG Enlargement (b)185 43228Relations with all pre-accession countries, Policy, planning, negotiations on enlargement, Pre-accession assistance including the Phare Programme
ECHO
(Poul Nielson)
111 19130All humanitarian aid—all stages of project cycle
SCR
(Chris Patten)
492 158650Technical, financial, and legal aspects of implementation of all Community external assistance programmes (except humanitarian), Audits and evaluation
Delegation Staff
(overall) (c)
654 380 (e)1051
Overall Total2,450755 3,222

  (a)  In addition to responsibilities with respect to ODA and OA, DG External Relations staff are also responsible for the Common Foreign and Security Policy (CFSP), management of external delegations, information for delegations, policy planning and co-ordination of policy on human rights and democratisation.

  (b)  In addition to responsibilities with respect to OA, DG Enlargement staff provide further assistance in support of the accession of CEECs to the European Union.

  (c)  It is currently not possible to break down Delegation Staff by individual DG

  (d)  Grade I: A grade equivalent. In addition there are 1475 staff at a lower level (grades II-V).

  (e)  Detached National Experts; auxiliaries; interimaires.

  Source: European Commission, DG Development, Personnel Department, 1999.

POVERTY FOCUS OF EC AID

  27.  The EC's aid programme is often accused of having insufficient focus on Least Developed Countries (LDC's). As the tables below illustrate, EC aid to LDC's has declined relative to aid to the EU's near neighbours. The share of official development assistance going to LDC's fell from 75 per cent in 1986 to 51 per cent in 1997. In 1986, of the ten major recipients of EC aid, seven countries were classified by the UNDP as low income on GNP per capita, seven were classified with a low human development index, and six are in sub-Saharan Africa. By 1996, of the 10 major recipients of EC aid, four were classified by the UNDP in 1997 as low income, and only one is in sub-Saharan Africa.

TOP TEN RECIPIENTS OF EC DEVELOPMENT AID

 (Bilateral ODA net disbursements in $US millions, 1986-87)

  1.  Ethiopia 157

  2.  India 139

  3.  Sudan 126

4.  Senegal 120

5.  Egypt 76

6.  Turkey 76

7.  Tanzania 62

8.  Ivory Coast 61

9.  Papua New Guinea 57

10.  Mozambique 52

TOP TEN RECIPIENTS OF EC DEVELOPMENT AID

 (Bilateral ODA net disbursements in $US millions, 1996-97)

  1.  Morocco 218

2.  Egypt 157

3.  Bosnia/ Herzegovina 152

4.  Ex-Yugoslavia 134

5.  Tunisia 133

6.  Palestinian Areas 130

7.  Jordan 105

8.  India 103

9.  Bangladesh 101

10.  Mauritania 98

  28.  The skewed nature of Western governments' humanitarian aid was highlighted in research done recently by Oxfam on forgotten emergencies ("An end to forgotten emergencies" May 2000). According to Oxfam, in response to the 1999 appeal for Sierra Leone, funds received equalled US$16 per capita of the targeted beneficiaries. For the Democratic Republic of Congo the figure was US$ 8.40. For Angola in 1999 it was $47.98. By contrast, the figure for the Former Yugoslavia was US$ 207.29 per capita. In 1996, the Former Yugoslavia received 38 per cent of aid from the European Commission Humanitarian Office (ECHO), while 31 per cent went to African, Caribbean and Pacific (ACP) states. In 1999 more than half of ECHO's budget went to Kosovo and the former Yugoslavia. This was four times the amount of aid going to 70 ACP countries.

  29.  The EU's development policy must be seen in the context of an increasingly prioritisation of relations with Eastern and Central Europe, the former Soviet Union and the Mediterranean countries. It is Members States who set these priorities and the skewing of interest is reflected most tangibly in the resources which are allocated to the so-called "middle income countries" rather than to low income countries. The European Parliament has consistently argued for a better poverty focus.

  30.  In spite of these facts it must also be noted that,

    —  Between 1986-90 and 1996-98 annual average commitments to Asia more than doubled and those to Latin America tripled. The largest recipient in 1996-98 was India, followed by Bangladesh and China. In Latin America, 160 million euro was committed in Peru, and Nicaragua and Bolivia both received commitments of 150 million euro.

    —  Between 1986-98 the ACP countries received 30 billion euro, accounting for 43.5 per cent of all EC aid that can be allocated geographically. In 1998 EC aid to the ACP totalled nearly 2.9 billion euro. More than three-quarters of these funds were provided through the EDF. Unlike some Member States the EC cannot be accused of Africa fatigue.

    —  During this period, 78 per cent of EC aid went to sub-Saharan Africa. The main beneficiaries in 1996-98 were Ethiopia, Malawi, Zambia, Mali and Mozambique.

    —  Currently EC aid to sub-Saharan Africa accounts for aid disbursements of $2 billion, considerably larger than to any other region. As world aid volumes to the region have declined significantly, EC aid since the 1990s has increased.

THE QUALITY OF EU AID

  31.  Although the structure and management of administering EC aid is not always effective or efficient, there is clear evidence that when the Commission is given the resources and authority it needs there are examples of good quality programmes being implemented.

  32.  In spite of limited resources, compared to the actual need, the EC has been praised for its work on human rights and democracy, and has found innovative ways of supporting local communities through grass roots organisations, churches and European NGOs. According to one official working on the Community's partnership with Nicaragua, "In the initial years of co-operation the EC had a very good reputation indeed in Nicaragua, when people saw I worked for the EC they would approach me with open arms. All because we had not left them to suffer in silence in the politically difficult years."

  33.  In South Africa, a special budget line and programme was set up largely as a result of pressure from the European Parliament. Between 1986-1994 funds for the European Special Programme grew substantially, from 6.5 million euro to 129 million euro. The growth of the programme reflected the importance attributed to developments in South Africa by the European Parliament. The primary objective was to provide practical and tangible assistance for South Africa's peaceful transition to a free and democratic country. It is clear that the programme had a significant impact on accelerating the process of change, ensuring it was relatively peaceful, legitimising the opposition and providing protection and financial assistance to civil society. An evaluation conducted in 1996 found that:

    "There is a consensus amongst all the people involved in or affected by the European Special Programme (ESP) that particularly during the first phase, it had a significant positive impact on political developments in the country and that it accelerated the demise of apartheid. The weight of relatively united Europe behind an aid programme aimed at supporting the elements of change in South African society was also very important because what was at stake was the success of the transition. "

  Source: Evaluation of the European Special Programme on South Africa, Main Report, SPM Consultants, October 1996.

  34.  The EC continues to demonstrate its commitment to South Africa by supporting economic development, water and sanitation programmes, the SADC HIV-AIDS programme—which is regarded as one of the EU's most efficient—and support for social housing. All contracts are signed with local NGOs and there is consequently a real sense of ownership. One project that has been particularly successful is the Human Rights Foundation, established in 1995 and operational since 1996. The Foundation has been so successful that it is now being used as a model in Nigeria.

  35.  Commenting on the EC's support for human rights in Nigeria, South Africa and Liberia, one Senior Commission official spoke of how, "the Commission was very well respected—when we spoke in international fora we were listened to. We had an entry ticket and you could easily see the value added. Of course, we had no commercial interest, and no vested interests and people respected that. If you can de-link your commercial interests from your political interests I think that gives you a real weight. People understood that in a politically sensitive area you sometimes have to make your own rules—it's a balancing act when people's lives may be in danger. In Nigeria, we had to create special budget lines which increased our support for civil society, freedom of the press and the environment, and this worked in spite of the military dictatorship. We found imaginative ways of helping people. In a country like Nigeria the EU has a very high and good profile because of our special knowledge of the situation—a knowledge which no Member State could claim. I think if you speak to anyone from that era, everyone will have a good word to say about the European Union. "

  36 .  On Friday 23 June, The European Community and Member States signed a new 20-year Partnership Agreement with the African, Caribbean and Pacific States in Cotonou, Benin. The Cotonou Agreement will replace the Lome Convention, in place since 1975, and aims at creating a more favourable context for sustainable development and poverty reduction, to be achieved through political dialogue, development aid and closer economic and trade co-operation. It is based on a respect for human rights, democratic principles and the rule of law, and on good governance, and aims to encourage greater participation by civil society, the private sector and trade unions. The agreement must now be approved by the European Parliament and ratified by Member States. The Council of ACP Ministers, meeting in Benin from 19 to 23 June 2000, heralded the new partnership agreement as an innovative approach to combating poverty, promote sustainable development and work towards the gradual integration of ACP countries into the multilateral trading system and the world economy.

  37.  From a personal perspective, I have recently visited Zambia, Angola and the Solomon Islands where there is further evidence that EU policies and programmes have had a positive impact on the ground. In the Solomon Isles support for fisheries and rural training, as well as work with displaced people have been invaluable. In Angola, unlike many bilateral programmes, the EU is heavily involved in both the delivery of aid through the World Food Programme, is now funding long term land mine clearance projects, and is dealing with issues related to the return of displaced people to their villages.

Mrs Glenys Kinnock MEP

June 2000


 
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