16 Financing EU external action: 11th
European Development Fund
| (35144)
11672/13
COM(13) 445
| Draft Council Regulation on the Implementation of the 11th European Development Fund
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| Legal base
| — |
| Department
| International Development
|
| Basis of consideration
| Minister's letter of 20 January 2014
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| Previous Committee Report
| HC 83-xiv (2013-14), chapter 6 (11 September 2013
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| Discussion in Council
| To be determined
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| Committee's assessment
| Politically important
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| Committee's decision
| Cleared |
Background
16.1 The European Development Fund (EDF)
is the main instrument for delivering EU assistance for development
cooperation under the Cotonou Agreement with ACP States and for
financing EU cooperation with the Overseas Countries and Territories
(OCT). Each EDF is concluded for a multi-annual period. The EDF
is funded outside the EU budget by the Member States on the basis
of specific contribution keys. The UK's share is 14.68%.
16.2 The Multi-Annual Financial Framework
(MFF) agreed at the February 2013 European Council included an
overall figure of €30.5 billion for the EDF for the period
2014-20. This is part of a total package covering Heading 4 of
the EU budget, on External Action, involving a range of other
financial instruments (pre-accession finance, European Neighbourhood
Partnership, Stability Instrument, etc.).
16.3 The full background thus far is
set out in the earlier reports referred to in the headnote to
our previous Report under reference.[83]
In essence, the EDF element was de-coupled from the rest of the
Heading 4 process. Several parts of the EDF agreement —
the Internal Agreement; the Implementing Regulation; and the Financial
Regulation — specify the allocation and management of the
fund.
16.4 The Committee cleared the Commission
Communication and Council Decision dealing with the "top
line" elements of the EDF 11 Internal Agreement at its meeting
on 19 June, prior to the June EU/ACP Council of Ministers; having
now been agreed with the ACP, it will form a new annex to the
Cotonou Agreement. The Internal Agreement will only enter into
force once all Member States have ratified it, which is expected
to take 18 months or more. The Commission Communication accordingly
proposed the provisional application of a number of articles of
the EDF 11 Internal Agreement, so as to ensure all appropriate
decision making procedures and modalities for the implementation
and programming of EDF 11 are put in place whilst Member States
ratify the agreement — thereby minimising any delay to the
disbursement of funds once full ratification has been completed.
The articles to be provisionally applied include the adoption
of an Implementing Regulation and a Financial Regulation. No
commitment of any EDF 11 funds can be committed until ratification
is completed by all Member States. (The same approach was followed
for the transition from EDF 9 to EDF 10: to ensure some continuity
and on-going predictability of aid flows to beneficiary countries,
balances from EDF 8 and EDF 9 and de-committed funds from EDF
10 are expected to be made available during the period before
EDF 11 enters into force.)[84]
The draft Council Regulation
16.5 The draft Implementing Regulation
sets out the programming process and monitoring framework for
all EDF 11 funds that will be spent on country and regional programmes,
intra-ACP programmes such as the Africa Peace Facility, and the
Cotonou Investment Facility.
16.6 The EDF 11 Implementing Regulation
complies with the provisions of the Cotonou Agreement and aligns,
where appropriate, with the main provisions of other development
instruments, particularly the Development Cooperation Instrument
(DCI) and the common rules and procedures for the implementation
of the Union's instruments for external action, the Common Implementation
Regulation (CIR). This alignment would allow for the inclusion
of the EDF in the EU budget post 2020, were the Member States
so to decide.
16.7 It was helpfully summarised and
commented upon by the Parliamentary Under-Secretary of State at
the Department for International Development (Lynne Featherstone)
in her Explanatory Memorandum of 27 August 2013 (see paragraphs
6.6 and 6.7 of our previous Report).[85]
16.8 Looking ahead, the Minister said
that the Implementing Regulation would be negotiated by Member
States in the ACP Working Group from 6 September, with the aim
of agreement by unanimity by the end of the year.
Our assessment
16.9 It appeared that the fundamentals
were sound — more differentiation; increased focus on poverty
and fragile States; measures to increase effectiveness; a results-based
approach. However, as the Minister noted, there were some important
elements on which the details had yet to be finalised —
ensuring sufficient EDF Management Committee oversight of resource
allocation; the right sort of EU coordination at country level;
appropriate Member States' oversight of the new unallocated reserve;
and embedding the agreement on dedicated funding for monitoring
and evaluation.
16.10 We therefore asked the Minister
to write to us again when the negotiations had progressed further,
and in good time prior to any planned adoption by the Council.
16.11 In the meantime, we retained the
draft Regulation under scrutiny.
16.12 As with all of the process thus
far, we also drew this latest stage to the attention of the International
Development Committee.
The Minister's letter of 20 January 2014
16.13 The Minister says:
"Significant progress has been
made towards the UK's ambitions on each of the four areas highlighted
in my EM of 27 August 2013 covering: results and embedding the
agreement on dedicated funding for monitoring and evaluation;
sufficient Member State management oversight of EDF resource allocation;
Member State oversight of unallocated reserves; and appropriate
level of EU coordination at country-level."
16.14 The Minister continues as follows:
"I am pleased to inform you
that significant improvements have been made to the Implementing
Regulation to reflect a strengthened focus on results and evaluation,
embedding the agreement on dedicated funding for these reforms
set out in the 11th EDF Internal Agreement. The UK
successfully argued for the Commission to produce an annual rather
than biennial report on progress, which will draw from EuropeAid's
new results framework. This will include an analysis of key outputs
and outcomes and, whenever possible, the EU's contribution to
broader development impacts. This is further strengthened by provisions
which support country-led results frameworks based on, where appropriate,
internationally agreed targets and comparable and aggregatable
indicators such as those of the MDGs. Additionally, any evaluation
of EuropeAid's aid programmes, including recommendations and follow-up
actions, may now be brought to the EDF Management Committee for
discussion. In these cases, the Commission will report back to
the EDF Committee one year after the implementation of agreed
actions.
"Guidelines on programming
of funds have also been revised to ensure that priority sectors
are set out with objectives and expected results as well as key
performance indicators for each sector of intervention. Furthermore,
each specific programme will include a description of operations,
including details of expected results using tailored indicators
and targets and, where relevant, a cost-benefit analysis. These
documents will also set out how they will contribute to delivery
of the EU's Agenda for Change, the risks to the project and proposals
for their mitigation, as well as arrangements for monitoring,
audit and evaluation.
"These amendments all contribute
to an overall step-change in approach to ensure specific and effective
monitoring, reporting and evaluation of the 11th EDF. The UK was
instrumental in driving these changes and setting an ambitious
target for the Commission to sign up to.
"The UK has also ensured a
stronger level of EU coordination at country level whilst maintaining
a level of flexibility to work with other partners or independently
where required. The regulation promotes working towards EU joint
programming, but it does not oblige Member States to participate.
"Appropriate EDF Committee
oversight of resource allocation is still being negotiated. As
I noted in my EM of 27 August 2013, we are pleased that the principles
of the Commission's Agenda for Change Communication are reflected
in this regulation. In particular, the principle of differentiation
(funding graduated according to the needs of partner countries,
the willingness of the government to reform, and potential value
added by EU assistance) has been reflected in the Commission's
methodology for allocating funds to country programmes which Member
States have had the opportunity to discuss and input into. The
UK is further satisfied that the EDF Committee has final approval
of every individual financing and programming decision via standard
qualified majority voting procedure. We are additionally pushing
for the EDF Committee to give a final opinion on the overarching
resource allocation methodology.
"Only one other outstanding
issue remains. A proposal has been put forward by Germany to create
a mechanism which will provide financial incentives for good performance
on a range of governance and human rights objectives. This mechanism
will draw funds from the unallocated reserves. In principle we
support this, but the design of such a mechanism will be crucial
if it is to have the desired impact on partner country governments.
We are currently establishing how best this performance mechanism
could be designed and implemented with other Member States. Member
States will include a reference to this mechanism in the Implementing
Regulation, but will devise its specific mechanics in technical
meetings in Brussels during the coming months.
"I am further satisfied that
Member States will approve all programmes coming from the unallocated
reserves with the same scrutiny accorded to all financial decisions
under standard EDF Committee operating procedure.
"The final draft of the Implementing
Regulation is therefore nearing informal agreement at working
group level. I expect that acceptable language on the broad scope
of a performance mechanism should be agreed by the end of January.
Once this last point is resolved, the regulation should progress
for adoption in Council possibly as early as February 2014."
16.15 Overall, the Minister professes
herself pleased with the outcomes of the negotiations, which:
"enable the 11th Implementing
Regulation to facilitate more differentiation in programming,
with an increased focus on poverty and fragile states, together
with stronger measures to increase effectiveness through a results-based
approach and improved monitoring and evaluation. The EDF Committee
retains critical oversight over all financing and programming
decisions, and where appropriate the instrument has been aligned
with the other EU budget external actions to enable coherent procedures
and improve overall EU aid effectiveness."
Conclusion
16.16 We are grateful to the Minister
for this comprehensive and timely update. It is plain that good
work has been done since last September. We have no reason to
doubt that the only remaining issue (c.f. paragraph 16.15 above)
will be satisfactorily resolved.
16.17 We are now therefore content
to clear the draft EDF 11 Implementing Regulation from scrutiny.
16.18 We are again drawing this chapter
of our Report to the attention of the International Development
Committee.
83 See HC 83-xiv (2013-14), chapter 6 (11 September
2013). Back
84
See headnote of (34961) 10212/13: HC 83-vi (2013-14), chapter
9 (19 June 2013). Back
85
See HC 83-xiv (2013-14), chapter 6 (11 September 2013). Back
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