4 Development Assistance and Governance
| (27791)
12572/06
COM(06) 421
+ ADDs 1 & 3
| Commission Communication: Governance in the European Consensus on Development — Towards a harmonised approach within the European Union
Commission Staff Working Documents
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| Legal base | — |
| Department | International Development
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| Basis of consideration | Minister's letter of 27 February 2009
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| Previous Committee Report | HC 16-v (2007-08), chapter 9 (5 December 2007) and HC 34-xxxvii (2005-06), chapter 39 (11 October 2006)
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| Discussed in Council | 16 October 2006 General Affairs and External Relations Council
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| Committee's assessment | Politically important
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| Committee's decision | Cleared (reported to the House on 11 October 2006); further information requested and provided
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Background
4.1 As the Commission noted in its introduction to this Communication,
poverty reduction and the Millennium Development Goals (MDGs)[11]
will not be achieved without decisive progress in the areas of
economic, social, environmental and political governance; with
the European Consensus on Development setting out the EU's approach
and contribution, "identifying good governance, democracy
and respect for human rights as integral to the process of sustainable
development and as major objectives of EU development policy".
4.2 Accordingly, the Communication proposed that
the Community and Member States agree principles and actions for
EU dialogue and cooperation with developing countries on governance,
with the objective of gradually developing "a coherent common
approach to promoting all aspects of democratic governance".
4.3 The document is summarised fully in our previous
Reports[12] In brief,
the first section describes what the Commission means by governance,
why governance is important for the achievement of the MDGs and
how the Commission believes EU development cooperation can be
used to improve governance in developing countries.
4.4 The second section proposed a "Governance
Initiative" for the 78 ACP countries which would be used
to allocate €3 billion of funds from the 10th EDF. €2.7
billion of this amount, called the "Governance Incentive
Tranche", or GIT, was to be linked to the EC's Country Strategy
Papers for EDF 10 (which sets the framework for EC development
assistance to the ACP countries). The remaining €300 million
would target regional support, with a particular focus on the
African Union (AU) and the APRM.[13]
4.5 The Conclusions consisted of four proposed principles
to guide EU work on governance — that improving governance
is a means to achieving the MDGs and that a broad approach to
governance is needed based on dialogue and country ownership —
and complementary actions based on regular dialogue between the
EU and the partner country about governance issues and financial
support for governance-related activities via the Governance Initiative.
A "Governance Profile" mechanism would help the Commission
assess the quality of governance in each ACP country and provide
the basis for dialogue with the government to identify benchmarks
and targets for improvements in governance, and thus help determine
the allocation of the €2.7 billion under the GIT.
4.6 In his Explanatory Memorandum of 5 October 2006,
the then Parliamentary Under-Secretary of State at the Department
for International Development (Mr Gareth Thomas) commented fully
on the Communication.[14]
He said that the UK was committed to supporting good governance
as stated in a recent White Paper "Making Governance Work
for the Poor". He welcomed the policy shift away from unilateral
EC analysis and programming and towards a common European understanding
of governance trends and reform priorities, which recognised that
it was neither realistic nor desirable to impose standardised
approaches. He supported the emphasis on poverty reduction as
the over-riding objective of EU development policy, with good
governance as a key complementary objective, and also welcomed
the use of the EDF 10 programming process to encourage improved
governance in ACP countries.
4.7 The Committee likewise agreed that governance,
broadly defined, was central to development; and that the approach
proposed in the Commission appeared to be soundly-based. We cleared
the Communication, but asked the Minister to write in Spring 2007,
when the Governance Profile exercise to which he referred had
been completed and presented to the Council, with his observations
thereon. For reasons that were not entirely clear, the Minister
did not write to us until 12 September 2007, and his letter was
not received by us until two months later, on 27 November 2007.
4.8 He reported that the Conclusions agreed in October
2006[15] fully reflected
his aspirations, including highlighting the importance of ensuring
the programming of the GIT took account of differing country circumstances
and a requirement for the Commission to undertake a joint review
with Member States of the process and to provide the Council with
a report in 2008.
4.9 We looked forward to hearing more from the Minister
when the review had been completed, with his further observations
thereon.[16]
The Minister's letter of 27 February 2009
4.10 In his letter, the Parliamentary Secretary at
Department for International Development (Mr Ivan Lewis) explains
that in March 2008 the Communication commissioned an independent
review of the GIT supported by a Joint Commission/Member States
reference group, including the UK, which was received in November
2008 and whose findings and conclusions are set out in the Commission
Staff Working Paper "Supporting Democratic Governance through
the Governance Initiative: A Review and the Way Forward"
sent to the Council of Ministers in January 2009 (and is attached
to the Minister's letter).[17]
4.11 The Minister is "pleased to report"
a "comprehensive and insightful" review, whose "findings
and conclusions form an excellent basis for our dialogue and cooperation
with the Commission on how the Governance Incentive can be further
improved to support democratic governance". The review "clearly
emphasises the UK view that ultimately improvements in governance
are driven by partner countries' own commitment to reform",
this point was, the Minister says, "again reiterated by the
Commission and Member States at the EU Development Ministers'
Informal Meeting in Prague on 29-30 January 2009 which my colleague
Gareth Thomas attended."
4.12 The Minister summarises the main findings and
recommendations of the review thus:
"I. Governance Profiles (GPs) generally provide
a relevant and accurate analysis and, therefore, are a useful
diagnostic tool. However, they do not adequately assess the underlying
causes of weak governance, the links between informal institutions
and local incentives, nor provide sufficient focus on dimensions
of fragility and security. In addition, Member States, including
the UK, require more timely consultation in order to provide meaningful
input to ensure that GPs are based on shared analysis. The review
recommended that the EC and Member States should compile a comprehensive
manual on how to prepare and update GPs to give better guidance
to EC Delegations.
"II. The Review highlighted that in most cases,
the Governance Incentive process has resulted in better integration
of governance into cooperation strategies. For example, in the
case of Democratic Republic of Congo, the incentive tranche process
has contributed to more consistent programming between the Commission,
bilateral and other donors. But in other countries, such as Sierra
Leone, this integration is less visible.
"III. Governance Action Plans (GAPs) are usually
relevant to the problems identified in the GP and are viewed as
a constructive basis for reform. However, the Review found that
the quality of GAPs is variable, and do not always reflect key
documents, most importantly pre-existing government owned governance
reform plans, such as contained in Poverty Reduction Strategy
papers (PRSPs). The review also suggests, as the UK has done previously,
there should be better involvement of in-country civil society
and development partners.
"IV. The Review indicates GIT allocation process
is not sufficiently transparent. The incentive nature of the financial
allocation is also questioned given that the financial significance
of the governance incentive tranche is modest. The conclusion
on the incentive nature of the Initiative is still tentative as
the Annual Operational Review (AOR) in 2009 and Mid Term Review
(MTR) in 2010 of EDF 10th have not been completed. In the future,
this may mean that there is more expectation that Member States
consider the appropriateness of providing additional bilateral
resources through their own aid programmes or to the Commission,
in the light of the analysis.
"V. The Review states that GIT process has the
potential to inform the EU political dialogue on key governance
issues. It points to emerging evidence of the GIT leading to deeper
commitment by Africa, Caribbean and Pacific (ACP) countries to
governance reforms in different areas. For Africa in particular,
it has contributed to an enhanced Africa/EU dialogue on governance
issues in the framework of the Joint Strategy and Action Plan
for 2008-2010. The review suggests it would be opportune to develop
a further standard methodology for regular assessment of Government
commitments and the incorporation of results of this exercise
into political dialogue.
"VI. In summary, the Governance Incentive (the
process, the instruments and the tools) is innovative and well
adapted to the EU policy approach to supporting democratic governance.
But as the review indicates, further improvements are required
if its potential is to be maximised."
4.13 The Minister fully supports the findings, conclusions
and recommendations, and says that he will "work with the
Commission to ensure that the Governance Initiative process further
develops its contribution to a comprehensive approach to aid effectiveness,
donor coordination and harmonisation of Member States' policies,
strategies and programmes to support democratic governance."
He agrees that "the tools available, particularly the Governance
Profile, offer an opportunity to move beyond "information
sharing" and engage in joint analysis and response in areas
of governance, within donor-wide coordinating mechanisms where
these exist."
4.14 He goes on to say that, as noted by the Commission,
"there are already some constructive working relationships
across the EU at expert level." The UK "regularly shares
its expert knowledge and experience with the EC on political and
governance analyses at both central and country level", and
will continue to:
— work
jointly with the EC to fine-tune existing tools such as the GP,
prepare guidelines on methodology and process of preparing GPs
at the country levels for EC Delegations and discuss ways of integrating
governance within the 10th EDF methodology for the MTR;
— discuss with the EC the option of expanding
joint work to regions other than the ACP countries; and
— work closely with the Commission on the
impact assessment of the Governance Initiative and the lessons
learnt from the implementation of the existing European Neighbourhood
Partnership Governance Facility.[18]
Conclusion
4.15 The importance of the link between development
and governance is illustrated by the Commission's experience under
the Cotonou Agreement (of which the EDF is the financing vehicle),
which we consider in the context of Guinea elsewhere in this Report.
As we note there, it is difficult to see that an intensive exercise
in linking development and governance — particularly in
the enhanced political dialogue process embodied in Article 96
of the Agreement — has yet to bear significant fruit;[19]
all that it would appear to have done thus far is to demonstrate,
as the Minister puts it, "that ultimately improvements in
governance are driven by partner countries' own commitment to
reform".
4.16 We also note there our disappointment that
the Minister for Europe seems uninterested in whether or not the
2010 review of the Agreement will address the effectiveness of
this much-trumpeted and resource-intensive component of the 2005
revision, and have accordingly asked her to write to us either
now, or when it is available, about the proposed process and timetable
for the 2010 revision, and to explain why she has not pressed
for a proper assessment of the effectiveness of the Article 96
process, and how it might be modified, if it is not part of that
process and timetable.
4.17 We hope that her DFID counterpart will take
a more proactive stance with regard to the related Mid-Term Review
of the 10th EDF, and the Governance Incentive. As he
indicates, this exercise is still very much a work-in-progress.
Nonetheless, as he also indicates, the Review points up the potential
of the GIT process to inform EU political dialogue on key governance
issues, including the assessment of government commitments and
the incorporation of the results of this exercise into political
dialogue — dialogue which is, as we note above, central
to the Cotonou Agreement. We look to him to ensure that these
issues are covered, and subsequent further developments reported
on, when he or any colleague or successor submits an Explanatory
Memorandum on the 10th EDF Mid-Term Review.
4.18 In the meantime we are reporting this latest
information to the House, given the widespread interest in development
and governance issues.
11 UN millennium development goals to be achieved by
2015 - the eradication of extreme poverty and hunger, achievement
of universal primary education, promotion of gender equality and
female empowerment, reduction of child mortality, improvement
of maternal health, combat of HIV/Aids, malaria and other diseases,
environmental sustainability and a global partnership for development.
Back
12
See headnote. Back
13
Under the auspices of the African Union, prominent Africans are
nominated by member countries and appointed by their respective
Heads of State to the APRM (African Peer Review Mechanism) review
panel, to promote policies, standards and practices in favour
of political stability, economic growth, sustainable development,
human rights and regional integration. Back
14
See headnote: HC 34-xxxvii (2005-06), chapter 39 (11 October 2006). Back
15
Set out on pages 10-14 of the full General Affairs and External
Relations Council Conclusions of 16-17 October 2006; see http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/gena/91351.pdf Back
16
See headnote: HC 16-v (2007-08), chapter 9 (5 December 2007). Back
17
And is also available at http://register.consilium.europa.eu/pdf/en/09/st05/st05504.en09.pdf
Back
18
See http://ec.europa.eu/world/enp/faq_en.htm for details of the
European Neighbourhood Policy, including the European Neighbourhood
Partnership Governance Facility, which will provide additional
EC support, on top of the EC funding amounts already allocated,
for those countries who have made most progress in implementing
the agreed reform agenda set out in their ENP Action Plan.. Back
19
See chapters 7 and 8 of this Report. Back
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