8 The Development Cooperation Instrument
and the European Instrument for Democracy and Human Rights
| (32175)
15028/10
—
| Draft Regulation amending Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation and Regulation (EC) No 1889/2006 on establishing a financing instrument for the promotion of democracy and human rights worldwide
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| Legal base | Article 209 TFEU; QMV; ordinary legislative procedure
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| Document originated | —
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| Deposited in Parliament | 15 November 2010
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| Department | International Development
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| Basis of consideration | EM of 9 December 2010
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| Previous Committee Report | None
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| To be discussed in Council | To be determined
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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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Background
8.1 The Development Cooperation Instrument (DCI)
and the European Instrument for Democracy and Human Rights (EIDHR)
are two of nine external action instruments (or regulations),
setting out how EC funds will be spent on development issues under
the current Financial Perspective (2007-2013).
8.2 Regulation (EC) No 1905/2006 of the European
Parliament and of the Council of 18 December 2006 establishing
a financing instrument for development cooperation (DCI) replaced
the range of geographic and thematic instruments that had been
created over time and as needs arose. Its aim is "to improve
development cooperation." Under this instrument, the EU finances
measures aimed at supporting geographic cooperation with the developing
countries included in the list of aid recipients of the Development
Assistance Committee of the Organisation for Economic Cooperation
and Development (OECD/DAC), which are listed in Annex 1 to the
Regulation.[38]
8.3 The European Instrument for Democracy and Human
Rights (EIDHR, which came into force on 1 January 2007) is (according
to the Commission website) "the concrete expression of the
EU's intention to integrate the promotion of democracy and human
rights into all of its external policies." Its key objectives
are:
· Enhancing respect
for human rights and fundamental freedoms in countries and regions
where they are most at risk;
· Strengthening
the role of civil society in promoting human rights and democratic
reform, in supporting the peaceful conciliation of group interests
and in consolidating political participation and representation;
· Supporting
actions in areas covered by EU Guidelines: dialogue on Human rights,
human rights defenders, the death penalty, torture, children and
armed conflicts and violence against women;
· Supporting
and strengthening the international and regional framework for
the protection of human rights, justice, the rule of law and the
promotion of democracy;
· building confidence
in and enhancing the reliability and transparency of democratic
electoral processes, in particular through monitoring electoral
processes.
The EIDHR instrument can grant aid where no established
development cooperation exists, and can intervene without the
agreement of the governments of third countries. It can support
groups or individuals within civil society defending democracy
as well as intergovernmental organisations that implement the
international mechanisms for the protection of human rights. Assistance
under EIDHR complements other tools which are used to implement
EU policies for democracy and human rights, including the Development
Co-operation Instrument, the European Neighbourhood Partnership
Instrument and the more crisis-related interventions of the Instrument
for Stability.[39]
8.4 In June 2009, the previous
Committee considered a proposal regarding the DCI and the EIDHR
and the payment of taxes, duties and charges in exceptional cases
and duly justified circumstances. The then Minister (Gareth Thomas)
explained that the DCI and EIDHR were the only ones among the
nine relevant financial instruments that absolutely ruled out
the payment of such costs, while the others contained the phrase
"in principle'', which provided the flexibility — in
exceptional cases and duly justified circumstances — to
allow the payment of taxes, duties and charges. He went on to
explain that:
— this was particularly important where
projects or programmes were implemented by NGOs which might be
obliged to subcontract specific activities to the private sector;
— one of the fundamental principles of
the EIDHR, which works mainly with NGOs, is its independence from
the consent of third country governments and other public authorities;
— in this context, insistence on the ineligibility
of payment of taxes and duties had proven to be problematic in
practice;
— the proposal, therefore, was to harmonise
the wording of Article 13(6) of the EIDHR and Article 25(2) of
the DCI with the corresponding provisions of the other external
action financial instruments as follows: 'Community financing
shall, in principle, not be used for paying taxes, duties
or charges in beneficiary countries'.
8.5 The then Minister supported
this alignment of the development regulations, as it would ensure
there was a common level of flexibility for the European Commission
in taking forward development programmes. He noted that all the
EC Development Instruments would continue to lay down that Community
support may not be used to finance the costs of taxes, duties
and other charges in principle; and that only under exceptional
conditions would any such payments be considered. He particularly
welcomed that this amendment would help facilitate the European
Community to maximise its work through NGOs and civil society
in general. He explained that there were no financial implications
for the Commission or HMG; while the proposed amendment would
allow for greater flexibility in the Commission's implementation
of EC development programmes, any such activities would continue
to be within the limits of existing EC budgets (2007-2013: €16.9
billion (£14.9 billion) DCI and €1.1 billion (£0.9
billion) EIDHR).
8.6 The previous Committee considered that the case
was well-made, that no questions arose and that that this minor
change did not warrant a substantive Report to the House.
The draft amendments to the DCI and the EIDHR
8.7 In his Explanatory Memorandum
of 9 December 2010, the Parliamentary Under-Secretary at the Department
for International Development (Stephen O'Brien) explains that
the EP deals with the DCI and EIDHR in two different committees
— the Committee on Development for the amendments concerning
the DCI; and the Committee on Foreign Affairs for the amendments
concerning the EIDHR — and that both committees have tabled
amendments to the original proposal. He says that, in each case,
the Commission's proposals regarding taxes, duties and charges
are accepted.
"However, he says, the EP has also tabled
amendments to take into account the Commission Communication "Consequences
of the entry into force of the Treaty of Lisbon for ongoing inter-institutional
decision-making procedures" and some other legislative texts
such as the Treaty on the Functioning of the European Union. He
analyses these as follows:
"The main EP amendments concerning the DCI
(Regulation No 1905/2006) relate to i) the Commission's powers
to adopt delegated acts in respect of Geographic Strategy Papers,
Multi-Annual Indicative Programmes and Strategy Papers for thematic
programmes; ii) the explanation of delegated acts in Article 35
(amended), Article 35a (new) and Article 35b (new) of the DCI
Regulation and their application to Article 17 'ACP Sugar Protocol
Countries' and Article 21 'Adoption of strategy papers and multi-annual
indicative programmes'; iii) the inclusion of national parliaments
in the Article 33 'Evaluation' to provide proposals on external
evaluations; iv) and the submission of the Annual Report (Article
34) to national parliaments.
"The main amendments concerning the EIDHR
(Regulation 1889/2006) relate to the Commission's powers to i)
adopt delegated acts in respect of Strategy Papers and Annual
Action Programmes; and ii) the explanation of delegated acts in
the new Articles 17a, 17b and 17c and their application to Article
5 'Strategy Papers'."
8.8 The Minister notes that,
overall, the EP adopted 16 amendments for the DCI Regulation and
13 amendments for the EIDHR Regulation in its plenary session
on 21 October 2010; and has instructed its President to forward
its position to the Council and seek a compromise.
The Government's view
8.9 The Minister HMG welcomes
the Commission's proposal to align the regulations relating to
the EU's external instruments and supports the EP's amendments
to align the proposed legal text with the Treaty of Lisbon.
8.10 However, in line with the position set out in
his separate Explanatory Memorandum on the DCI and the package
of transitional financial assistance — the Banana Accompanying
Measures (BAMs) — to facilitate the adjustment required
of ACP banana producers by the ending of the EU preferential access
regime, the Minister rejects the EP's interpretation that Geographic
Strategy Papers, Multi-Annual Indicative Programmes and Strategy
Papers for thematic programmes constitute "delegated acts".[40]
He goes on to say:
"The definition of 'delegated acts' is intended
to cover only the Commission's legislative proposals. Strategy
and Multi-Annual Papers simply implement the relevant Instruments,
rather than amending them: we therefore do not consider them to
be legislative proposals.
"Under the Lisbon Treaty, Article 291 sets
out the powers conferred on the EP in terms of scrutinising documents
which implement existing Financial Instruments. Article 290 sets
out the powers conferred on the EP in terms of scrutinising delegated
acts which amend existing Instruments.
"The EP's attempt to interpret Strategy
and Multi-Annual Papers as delegated acts which fall under Article
290 would give it increased powers of scrutiny and risk considerably
delaying the programming of EU aid, reversing recent progress
in speeding up aid disbursement. We do not accept the EP's interpretation
of 'delegated acts' in this context, which in our view would constitute
'competency creep' by the Parliament."
8.11 Noting that Council agreement
is required before any amendments can be made, the Minister says
that the UK's position is unanimously supported by other Member
States and the Commission and that the Council will reject the
EP's tabled amendments and resist any attempts to increase its
powers of scrutiny on this issue.
8.12 He also notes that the EP is pursuing a similar
strategy in relation to a number of EU Financial Instruments and
that "HMG is taking a strong and coordinated line on this
issue."
8.13 Finally, on the timetable, the Minister says
that: the EP's first reading debate took place on 20 October 2010;
the plenary voted on 21 October 2010 and adopted 16 amendments
for the DCI Regulation and 13 amendments for the EIDHR Regulation;
the text has now been sent back to the Council for consideration;
at Coreper[41] on 8 December,
Member States will discuss the Council's agreed position ahead
of the EP's second reading; and will reject the EP's attempts
to increase its powers of scrutiny on this issue.
Conclusion
8.14 We now understand that,
subsequent to the Coreper meeting to which the Minister refers,
the agreed position that the Minister outlines was adopted by
the Council, without discussion, on 10 December; and that, the
matter still being under scrutiny, the Minister abstained from
voting.
8.15 We endorse the Government's position, and
look forward to hearing about the outcome. Once the European Parliament
responds, the Council will need to adopt a further agreed position;
in which case we shall expect a further Explanatory Memorandum
from the Minister, outlining the nature of the European Parliament
response and the Government's views thereon.
8.16 In the meantime we shall retain the document
under scrutiny.
38 For full information on the DCI, see http://europa.eu/legislation_summaries/development/general_development_framework/l14173_en.htm. Back
39
See http://ec.europa.eu/europeaid/how/finance/eidhr_en.htm for
full information on the EIHDR. Back
40
See (32201) 15033/10 at chapter 9 of this Report. Back
41
The Permanent Representatives Committee or "Coreper"
(from the French, Comité des représentants
permanents) is responsible for preparing the work of
the Council of the European Union. It consists of the Member States'
ambassadors to the European Union ("Permanent Representatives")
and is chaired by the Member State which holds the Council Presidency.
Coreper occupies a pivotal position in the Community decision-making
system, in which it is both a forum for dialogue (among the Permanent
Representatives and between them and their respective national
capitals) and a means of political control (guidance and supervision
of the work of the expert groups). See http://europa.eu/scadplus/glossary/coreper_en.htm
for further information. Back
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