Select Committee on European Scrutiny Thirty-Seventh Report

36 Environmental aspects of development co-operation



Special Report of the European Court of Auditors: The environmental aspects of the Commission's development cooperation

Legal base
Deposited in Parliament21 July 2006
DepartmentInternational Development
Basis of considerationEM of 10 August 2006
Previous Committee ReportNone
To be discussed in CouncilTo be determined
Committee's assessmentPolitically important
Committee's decisionCleared, but further information requested


36.1 Since the 1972 United Nations Conference on the Human Environment in Stockholm the issue of the environment and how to ensure that development is sustainable has become a subject of international concern. The 1992 United Nations Conference on Environment and Development in Rio de Janeiro further raised the profile of the environment and sustainable development, and led to three Multilateral Environment Agreements (MEAs): the Convention on Climate Change, the Convention on Biological Diversity, and the Convention to Combat Desertification. Environmental sustainability was chosen as one of the eight Millennium Development Goals (MDG) established at the UN Millennium Summit in 2000. The 2002 World Summit on Sustainable Development (WSSD) in Johannesburg sought to address both poverty and environment issues.

36.2 There are basically two types of intervention through which the donor community has sought to address the environmental aspects of development co-operation:

—  financing programmes and projects whose principal objective is to improve environmental conditions;

—  integrating environmental concerns into all other types of development programmes and projects — commonly referred to as "mainstreaming" the environment. In recent years the donor community, including the European Commission, has given increasing attention to this approach.

36.3 The Court of Auditors also acknowledges the wider European Union legal and policy framework, noting in particular Article 6 of the Treaty establishing the European Community, as amended by the 1997 Treaty of Amsterdam, which stipulates that: "Environmental protection requirements must be integrated into the definition and implementation of Community policies and activities..., in particular with a view to promoting sustainable development." Thus, the June 1998 Cardiff European Council stressed the importance of integrating environmental protection and sustainable development into the major policy areas, including development aid, managed by the Commission and invited it to put forward appropriate strategies. Then the 2000 European Community development policy included environment as a cross-cutting issue. Most recently the development policy consensus agreed between the European Commission, the Member States and the European Parliament in December 2005 not only maintained the environment as a cross-cutting issue but also made environment and natural resources one of nine priority sectors for funding.

36.4 Under the 2007-13 Financial Perspectives, the Community's external actions will all be grouped under 8 instruments:

—  four "geographic" ones — the Instrument for PreAccession (IPA), the European Neighbourhood and Partnership Instrument (ENPI), the Development Cooperation Instrument (DCI) and the one for industrialized countries: and

—  four "horizontal" ones — Human rights and democracy (EIDHR), Stability Instrument (SI) and the current instruments relating to Humanitarian Aid and Macro-financial assistance.

36.5 In addition, within the Development Cooperation Instrument (DCI) will be five "thematic" programmes — including the environment — to support activities in all developing countries except those covered by the IPA instrument.

The Court of Auditors' Report

36.6 Against this background, the Special Report of the European Court of Auditors covers the European Commission's work on integrating environmental issues into its development co-operation. It includes the Commission's response to the findings. In addition to auditor interviews at the Commission's Headquarters, with EuropeAid, DG Development, DG External Relations (RELEX) and DG Environment, missions were undertaken in a number of countries including Botswana, Brazil, Congo, Indonesia, Mali and Tanzania. The Court of Auditors also met DFID officials to help them benchmark standards of environmental mainstreaming, and a number of NGOs, including the WWF European Policy Office. 108 environmental and non-environmental programmes and projects in 16 countries with a value of over €1.5 billion were audited.

36.7 The report assesses the Commission's performance against three questions:

  • Does the Commission have a comprehensive overall strategy to deal with the environmental aspects of its development co-operation and has it made adequate management arrangements for implementing its strategy and assessing the environmental performance of its development aid?
  • Has the Commission effectively mainstreamed the environment into all of its development co-operation?
  • Have the environment programmes and projects financed by the Commission been effective?

36.8 In his comprehensive and helpful 10 August 2006 Explanatory Memorandum, the Parliamentary Under-Secretary of State at the Department for International Development (Mr Gareth Thomas) notes that the report is critical of the Commission's progress so far and highlights the following main areas of concern:

  • No clear strategy to implement and monitor work on environmental mainstreaming;
  • Staffing and training inadequate to support environmental mainstreaming work;
  • the Environment Integration Manual, a key tool to help with integration, remains unfinished;
  • Poor environmental integration into Budget Support guidelines and decisions and Country Strategy Papers (CSPs);
  • Considerable variation with regard to the application of Environmental Impact Assessments (EIA), with examples of major infrastructure (e.g. roads) projects, amongst others, not being subject to EIAs; and
  • Project outputs and results have frequently fallen short of objectives.

36.9 The Court nonetheless recognises some of the efforts made by the Commission to date — for example, the use of Country Environment Profiles as one way to influence the development of the CSPs and the potential benefits of the Commission's environmental projects not only to country priorities but often also to global environment needs. The main criticisms relating to projects are linked to over-ambitious design and weaknesses in the procurement procedures.

36.10 The report makes 15 recommendations grouped around three main themes:

  • establishing a comprehensive strategy for the environment and following up on its implementation;
  • improving the effectiveness of environmental mainstreaming; and
  • improving the effectiveness of environment projects.

36.11 Some of the principal recommendations and the Commission's responses (in italics) are as follows:

  • The development of a comprehensive strategy for environmental aspects of development co-operation, based on the 2005 Development policy and review in-house capacity to implement it.

The Commission will review and update the 2001 Environment Integration Strategy, and make it more comprehensive….In setting priorities for the use of limited resources, emphasis should be put on building the capacity of non specialist staff to handle basic environmental integration procedures (screening) and making specialist support available on request.

  • Completion of the Environment Integration Manual and systems to support its implementation.

The Manual is expected to be approved in 2006. Compliance will be verified as part of the Quality Support Group checks at the stages of project identification and formulation

  • Specific procedures for ensuring the environmental screening of all projects should be established.

Screening procedures will be set out in the Environment Integration Manual. The Commission will look into the possibility to entrust EC Delegations with a greater role in this area …

  • Better mainstreaming of environmental considerations into direct budgetary support, in particular by ensuring that strategic environmental assessments (SEAs) are carried out.

Through its update of the relevant manuals expected to be finalised in 2006, the Commission will make a particular effort to better mainstream the environment into its direct budgetary support operation.

  • Take further steps to identify and remove bottlenecks in the procurement procedures.

The Commission agrees that there is scope for simplification of procedures in order to increase speed and effectiveness of aid delivery whilst ensuring transparency and fairness. The Commission has proposed amendments to the Financial Regulation in this respect.

The Government's View

36.12 The Minister is "pleased to see such a comprehensive review of the Commission's approach to environmental integration". He notes that the UK works with the Commission and other Member States on many of the issues raised in the report and that the timing of the report means that some of the measures taken by the Commission over the past 6 months which have been strongly welcomed by the UK — for example, the proposal for a funding line on Environment and Natural Resources, including Energy, which will be part of the "thematic" section of the Development Cooperation Instrument — were not fully taken into account in the Court's analysis. He continues as follows:

"We agree that the Commission needs to have a clear strategy to help guide their work on environmental integration, as well as financial disbursements. This will in part be linked to the strategies to be developed as part of the new Financial Perspectives (2007-2013) and the planned Environmental Thematic programme within the Development Cooperation Instrument. We also agree that the Commission needs to consider how best to ensure that it has the capacity to implement its strategy and to ensure adequate screening of programmes. We welcome the Commission's suggestions on possible ways forward, in particular the recognition given to finding ways to maximise the use of limited human resources. We would also welcome the publication of the Environment Integration Manual before the end of 2006, as indicated by the Commission, as we believe that this will be a useful source of information and guidance for EC staff at all levels.

"The integration of environment into Country Strategy Papers (CSPs), Budget Support and Sector Support (in particular roads) is a particularly important area. We support the Commission's response which highlights the link between the integration of environment into national planning processes (including Poverty Reduction Strategies, PRS) and the subsequent reflection in national budgets. The Commission works with other donors, including the UN agencies, to share best practice and support countries in their efforts to integrate environment into PRSs. We welcome the use of Country Environment Profiles by the EC, but it is important that these don't become stand-alone documents and that the EC takes measures to ensure that priority issues are properly integrated into CSPs.

"We welcome the references to the use of Strategic Environmental Assessment (SEA) and the recommendations by the Court for the Commission to improve its guidance and use. The Commission's response rightly refers to the OECD DAC process on SEA which is now complete and which agencies are now working on joint approaches to implementation. The EC should be encouraged to continue to play an active part in donor discussions on how to develop joined-up approaches to SEA and other impact assessment methods."

36.13 Looking ahead, the Minister says that he expects the report to be discussed in the European Parliament in September/October but is not aware at present of any further scheduled discussions.


36.14 As the Court says, "without a clear strategy to help make the new development policy's approach to the environment operational, the potential benefits are likely to be undermined. There is a need for the Commission to clarify how high the environment ranks amongst the many different priorities it has to address in the field of development cooperation... [and] to ensure that this policy is actually translated into environment programmes and projects, that it has sufficient in-house environmental expertise and that clear environmental integration procedures are both defined and complied with."[88] We are accordingly surprised that there appears to be so little planned follow-up and no sense of urgency about keeping the Commission up to the mark (for example, ensuring that the long-overdue Environment Integration Manual is actually published by the end of this year). Instead, beyond an expectation of further discussion in the European Parliament, the Minister indicates that the Council will be taking no particular interest in the report.

36.15 We now clear the Report, but in so doing ask the Minister to write to us in a year's time with a full report on what action has been taken to follow up the Court's detailed and timely recommendations.

88   Court of Auditors' Report, paras 82 and 86. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2006
Prepared 26 October 2006