2. Establishment of an EU Water Fund
| (24491)
8864/03
COM(03) 211
| Commission Communication on the establishment of an EU Water Fund.
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| Legal base | — |
| Document originated | 23 April 2003
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| Deposited in Parliament | 8 May 2003
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| Department | International Development
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| Basis of consideration | EM of 20 May 2003
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| Previous Committee Report | None
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| To be discussed in Council | No date fixed
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested
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The Commission Communication
2.1 The Commission proposes the establishment of an EU Water Fund
as a contribution to achieving the Millennium Development Goal
(MDG) of halving by 2015 the number of people without access to
safe water and sanitation. In Africa close to 40% of the population
are without access to safe water, and worldwide more people die
from unsafe water than from war.
2.2 In May 2002, the Council adopted a Resolution endorsing the
Communication on water management in developing countries,
which stressed the need to integrate sustainable water management
in national and regional development strategies and to support
partner countries in developing sustainable solutions.
2.3 At the World Summit on Sustainable Development (WSSD) in Johannesburg
in September 2002, the EU launched the EU Water Initiative
and an EU-African strategic partnership on water affairs and
sanitation was signed by the President of the European Commission,
the Danish Prime Minister on behalf of the EU Presidency, and
African Heads of State. Both the financial analysis of the EU
Water Initiative and the Camdessus Report of the World Panel on
Financing Water Infrastructure concluded that, if the MDG and
WSSD targets were to be met, it would be necessary to mobilise
substantial funds from a variety of sources.
2.4 There are already a number of plans and proposals for clean
water and sanitation but, as the Camdessus report pointed out,
the majority of these cannot be put into effect because of the
inflexibility of the existing instruments. The Fund should provide
flexibility. The Commission sees the main role of the Fund as
that of a catalyst for promoting initiatives, providing information,
and building research and management capacity in ACP countries.[3]
The Fund should not compete with existing initiatives, and should
not finance private sector developments which provide a reasonable
return on investment. It should provide, primarily, concessional
funding for projects, programmes and capacity-building activities
with a view to leveraging private sector finance into the sector.
2.5 The Commission proposes that the Fund be sourced from the
€1 billion reserve of the 9th European Development
Fund (EDF). This is a conditional sum as it can only be released
by the Council after the mid-term review of the performance of
the EDF in 2004, but the Commission hopes that the funds can be
released early in 2004. It recognises that the legal provisions
which apply to the EDF would have to be respected, and possibly
modified, to allow the reserve to be mobilised for this purpose.
2.6 To maintain the focus on the problems of Africa, the Commission
proposes that a close link should be established between the management
of the EU Water Fund and a number of African bodies and experts.
It suggests that an appropriate way to manage the Fund might
be to set up an executive agency.
The Government's view
2.7 The Secretary of State for International Development (Baroness
Amos) says that the Government has so far welcomed the proposal
for a fund as a demonstration of the EU's commitment to its Johannesburg
pledges.
2.8 The Minister adds:
"We can agree that substantial resources (possibly up to
€1 billion) could be made available for water development
from various sources, notably the €11 billion backlog from
old EDFs.[4] We believe
that the scope of the fund could be broadened to include non-ACP
regions, which would mean using additional sources of funding
as the EDF can only be spent in ACP countries. The UK (along
with Germany, Sweden, Denmark, Netherlands and Finland) are concerned
about the suggestion to create a new executive agency and to commit
the conditional €1 billion in advance of the performance
review. While we can give strong political backing to the aims
of the proposal, we believe it is appropriate that the Council
working groups should consider the proposal in more detail before
reaching agreement."
2.9 The Minister also comments that the Commission rushed to produce
this Communication, without adequate consultation. It was presented
to Ministers at the General Affairs and External Relations Council
on 19 May, but no decision was taken, other than agreement that
the Commission should continue to investigate the options and
to discuss the detail of the proposal in the Council working groups.
Conclusion
2.10 We support the stand taken by the Council. The Communication
outlines in broad terms what might be done and it was probably
sensible of the Commission not to put a lot of work into it before
it had secured a generally positive reaction in principle from
the Council. €1 billion is a lot of money to earmark for
one initiative.
2.11 We note the reservations expressed by some Member States,
including the UK, about the creation of a new executive agency.
Before the Council agrees to release the funds, we shall expect
the Minister to deal in more detail with the advisability of earmarking
such a large sum for one initiative. We shall also expect to
be reassured by the Government that the appropriate staffing and
other resources have been carefully planned and provided for,
so that the Water Fund can be managed by the Commission cost-efficiently
but also effectively.
2.12 We do not clear this document, but ask the Minister to
ensure that we have a timely opportunity to scrutinise the proposal
further before it is put formally to the Council. To avoid any
last-minute rush, if the Working Groups reach agreement on important
aspects of the proposal, before producing a polished text, it
would be helpful if the Minister were to provide an update.
3 Those African, Caribbean and Pacific countries which
are signatories to the ACP-EU Partnership Agreement, also known
as the Cotonou Agreement. Back
4
We understand that this figure is approximate and is made up of
€ 8 billion of funds committed but not spent and €3
billion of other funds allocated but not committed. The conditional
€1 billion available under EDF9 remains, with the rest of
the backlog, in Member State treasuries until called down by the
Commission when needed for disbursement. The backlog could be
used for other development spending elsewhere, if not called down. Back
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