Documents considered by the Committee on 13 November 2017 Contents

16Stability and Peace Instrument

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested

Document details

Proposal for a Regulation amending Regulation (EU) No. 230/2014 of 11 March 2014 establishing an instrument contributing to stability and peace

Legal base

Articles 209(1) and 212(2) TFEU; QMV

Department

Foreign and Commonwealth Office

Document Number

(37930), 11037/1/16 REV 1 + ADDs 1–2, COM(16) 447

Summary and Committee’s conclusions

16.1In 2014 the EU established the Instrument contributing to Stability and Peace (IcSP), a €2.3 billion (£2 billion)172 programme which funds the EU’s rapid response to political instability in the developing world, as well as its longer-term conflict prevention, peace-building and crisis preparedness initiatives globally.173

16.2As a part of its drive to prevent instability and conflict, the EU aims to increase the capacity of developing countries to ensure the safety of their own citizens with an effective and accountable military apparatus. This objective of “capacity building in support of security and development” (CBSD) is to ensure that other countries have “adequate capacities” to remain politically stable, and to enable them to contribute constructively to peace, stability and crisis prevention in their own region.174 However, the Regulation underpinning the IcSP is a development policy instrument, and its current provisions do not explicitly allow the Instrument to be used for military capacity-building activities.175

16.3The European Commission has argued that the current IcSP Regulation therefore prevents the EU from providing the necessary levels of financial support for projects to address security challenges in third countries. In July 2016, it proposed an amendment to the Regulation to allow €100 million (£82.65 million) of the Instrument’s funds to be spent on CBSD between 2017 and 2020.176 Rather than reducing the budget for the existing elements of the Instrument, the €100 million will be diverted from other (as yet unspecified) parts of the EU budget for external affairs.177

16.4The Commission proposal has caused controversy because its legal basis is Articles 209 and 212 TFEU on development policy, while its aims appear to be primarily of a military nature. To overcome objections from Sweden and Luxembourg (as well as Members of the European Parliament), the legal text asserts that any funding granted for military capacity building could only be used in the context of the sustainable development of the beneficiary country. The EU will not be able to use the Instrument to fund recurrent military expenditure or the purchase of arms or ammunition.

16.5The Minister for Europe (Sir Alan Duncan) submitted an Explanatory Memorandum on the proposal in August 2016,178 expressing the Government’s support for the proposal. With respect to the legal base, the Minister said that classifying CBSD initiatives as development policy was “manageable in the short term” as the ICSP was not the “permanent solution” to the EU’s approach in this area.

16.6We did not receive a substantive update from the Government on this file until May 2017, when the Minister informed us belatedly that at the COREPER level the Member States (through COREPER) had in fact agreed on an amended version of the Commission proposal in December 2016. This “negotiating mandate” served as the Council’s opening bid in talks with the European Parliament on the final legislative text, which took place in autumn 2017. The substance of the negotiating mandate (which is still classified and cannot therefore be reproduced here) is in substance mostly the same as the original Commission proposal.179

16.7In October 2017, trilogues between the Council and the European Parliament led to an agreement on the final legislative text of the amendment. It preserved the substance of the Commission proposal, but at the Parliament’s request a declaration has been annexed which clarifies that the redeployment of other budget lines to fund the CSDB’s €100 million envelope will not come from the Development Cooperation Instrument. Formal approval of the legislation is expected to follow by the end of the year.

16.8We consider that the adoption of a mandate by COREPER is analogous to a general approach at a formal meeting of the Council. As such, as part of the Government’s commitment to transparency of the legislative process beyond formal decisions taken at Council, it should have pro-actively kept the Committee informed of developments ahead of the COREPER meeting in December 2016.

16.9In this respect, we take particular note of our predecessors’ Report of 26 May 2016 on transparency of decision-making in the Council. In it, they noted that “more transparency, particularly at the level of the preparatory bodies [including COREPER], might help to lift the lid on decision-making in the Council and reveal the extent to which legislation is simply nodded through by Ministers after negotiation by officials. There is scope for UK Ministers to provide Parliament with more information about, and explanation of, the actions they have taken on the UK’s behalf during this process”.180

16.10We are therefore disappointed that the Minister did not inform us of the substance of the Council’s mandate before it was agreed at the COREPER. We are also concerned that did not inform us of the adoption of the Council’s negotiating mandate on this legislative proposal until six months after the fact. This is an unacceptably long delay, and we ask the Minister to explain how this delay occurred. We also urge the Government to push for the publication of the Council’s negotiating mandate, which is still classified as LIMITÉ and therefore not available to the general public for scrutiny.

16.11With respect to the substance of the proposal, we would also like the Minister to clarify which existing EU budget lines are to be reduced to fund the €100 million endowment for CBSD activities under the amended Regulation, and what the impact of those reductions is likely to be. We retain the document under scrutiny as we have not yet received an update from the Minister about the outcome of the trilogue negotiations.

16.12Finally, in the context of Brexit, we do not consider that this proposal as a short-term funding programme has any direct implications for the UK’s withdrawal from the EU. However, we reiterate our concerns that the Government’s proposals for the future UK-EU relationship in the field of foreign policy181 lack detail on the institutional and legal framework that may be required to support a foreign policy partnership which is “unprecedented” in its “breadth (…) and degree of engagement”. In addition, we would like explicit confirmation from the Minister that the Prime Minister’s recent pledge on the Brexit financial settlement182 means the UK will continue to pay into the EU budget to cover its share of commitments under the entire 2014–2020 Multiannual Financial Framework, including its contributions to the IcSP.

16.13We therefore ask the Minister to clarify urgently:

Full details of the documents:

Proposal for a Regulation amending Regulation (EU) No. 230/2014 of 11 March 2014 establishing an instrument contributing to stability and peace: (37930), 11037/1/16 REV 1 + ADDs 1–2, COM(16) 447.

Background

Capacity building for security and development

16.14Article 21 of the Treaty on European Union (TEU) requires the EU “to preserve peace, prevent conflicts and strengthen international security” and to seek to “foster the sustainable economic, social and environmental development of developing countries, with the primary aim of eradicating poverty”.183 As a part of this, the EU is seeking to increase the capacity of developing countries to ensure the safety of their own citizens with an effective and accountable military apparatus.

16.15In 2015, the European Commission and the European External Action Service (EEAS) published a policy paper on “capacity building in support of security and development” (CBSD), which spelled out the rationale for the EU’s support to developing countries in this area:

“For any country to ensure its security and development, it must have or acquire adequate capacities in all critical sectors, including security and defence. This will not only stabilise that country but also enable it to contribute constructively to peace, stability and crisis prevention in its region.”184

16.16The EU’s CBSD activities can take many forms, but typically include technical cooperation, including joint research and innovation, training (knowledge transfer and skills development) and the provision of essential equipment and material.185

The Instrument contributing to Stability and Peace

16.17In pursuit of the objectives of Article 21 TEU, the EU in 2014 established the Instrument contributing to Stability and Peace (IcSP) by means of Regulation 230/2014.186 The Instrument is a €2.3 billion (£2 billion)187 programme which supports the EU’s external policies by “increasing the efficiency and coherence of the Union’s actions in the areas of crisis response, conflict prevention, peace-building and crisis preparedness, and in addressing global and trans-regional threats”.188

16.18The IcSP is based on Articles 209 and 212 of the Treaty on the Functioning of the European Union (TFEU), which deal with EU development cooperation policy and financial assistance to third countries respectively. As a result of its current focus on development cooperation, the IcSP Regulation does not contain specific provisions on funding for military capacity-building activities.189 Existing EU capacity-building initiatives, such as training and support for partner countries’ military forces, take place outside of the EU’s development policy framework. They are funded either by voluntary contributions from Member States, or through the so-called “Athena mechanism” on the distribution of costs for EU military or defence operations.190

16.19As a result, there is currently no single instrument funded from the EU budget to provide comprehensive assistance for military capacity building as part of a broader economic development strategy. The European Commission argues that this has created gaps in the EU’s “systematic and longer-term support” for CBSD in third countries, which in turn “negatively affected the overall effectiveness of EU support and continues to hamper the EU’s ability to deal comprehensively with the deteriorating security environment”.191 To address this situation, the European Commission said in 2015 it would work to establish “a facility linking peace, security and development in the framework of one or more existing instruments [and] a dedicated instrument to this effect”.192

The proposal to amend the IcSP Regulation

16.20In July 2016, the European Commission made good on this promise and proposed an amendment to the IcSP Regulation.193 The effect of the proposal would be to allow €100 million (£82.65 million) of the Instrument’s funds to be spent on CBSD from 2017 until the end of the current Multiannual Financial Framework in 2020.194 Rather than reducing the budget for the existing elements of the Instrument, the €100 million will be diverted from other (as yet unspecified) parts of the EU budget for external affairs.

16.21The Commission proposal has caused controversy because its legal basis is Article 209 TFEU on development policy, while its aims appear to be primarily of a military nature. To overcome objections from Sweden and Luxembourg (as well as Members of the European Parliament), the legal text asserts that any support for military actors funded from the ICSP budget would be limited to “exceptional circumstances”, for example where there is a risk that instability or security threats could lead to the collapse of government authority in a third country. Funding from the Instrument could also not be used to fund recurrent military expenditure, or the purchase of arms and ammunition.

16.22The Minister for Europe (Sir Alan Duncan) submitted an Explanatory Memorandum on the proposal on 2 August 2016.195 He expressed the Government’s support for the proposal, saying CBSD initiatives “[have] the potential to increase the effectiveness of EU crisis interventions in priority areas such as Somalia”. He also argued that military capacity building could bring the EU’s common defence and security policy missions to a close sooner, by allowing the host country to take over their functions more quickly.

16.23In his Memorandum, the Minister also noted that the proposal has the same legal base as the IcSP Regulation (articles 209 and 212 TFEU), making it a development policy instrument. This has the effect of making decisions to fund military capacity building initiatives subject to qualified majority voting, rather than the unanimity requirement which would normally apply to CBSD as a foreign policy measure.196 The Minister explained that he was content with this in the short term, but that the Government would seek to ensure that any long-term dedicated CBSD instrument would make decisions by unanimity.

16.24The previous European Scrutiny Committee considered the proposal and the Minister’s Explanatory Memorandum in September 2016.197 Our predecessors asked the Minister to clarify from which budget lines funding would be redeployed to fund the new CBSD element, and what the impact of those budgetary modifications was likely to be. They also concluded that, as a short-term instrument, the amended IcSP had no immediate Brexit implications.

16.25On 7 November 2016, the Minister wrote to the Committee to explain that “as the details [were] not finalised”, he was “not yet in a place to answer [its] questions” but committed to doing so “as soon as possible”.198

Developments since November 2016

16.26In December 2016, the Committee of Permanent Representatives of the Member States in Brussels (COREPER) agreed on an amended version of the Commission proposal.199 Such a “mandate for negotiations” serves as the Presidency’s guidelines in talks with the European Parliament on the final legislative text.200

16.27Although the mandate was agreed by COREPER at the end of 2016, the Minister did not appraise us of this fact until May 2017. In a letter dated 18 May, the Minister confirmed that the Government had supported the adoption of the negotiating mandate, noting that it was important “to operationalise CBSD to support the objective of contributing to sustainable development and, in particular, the achievement of peaceful and inclusive societies”.201

16.28The European Parliament adopted its position on the proposal on 11 July.202 MEPs on the Foreign Affairs Committee accepted the Commission proposal almost in full, but called for an amendment that would prevent funding from the Development Cooperation Instrument from being redeployed to finance the €100 million budget for CBSD-related initiatives under the IcSP. They also said that any future EU policy instrument created to address the security-development nexus, i.e. as part of the next Multiannual Financial Framework from 2020 to 2025, should be based on the conclusions of a “fully-fledged interdisciplinary evaluation” of previous EU-funded CSBD activity.

16.29In October 2017, trilogues between the Council and the European Parliament led to an agreement on the final legislative text of the amendment. It preserved the substance of the Commission proposal, but at the Parliament’s request a declaration has been annexed which clarifies that the redeployment of other budget lines to fund the CSDB’s €100 million envelope will not come from the Development Cooperation Instrument. Formal approval of the legislation is expected to follow by the end of the year.

16.30Although the Minister has not provided us with an assessment of the implications of Brexit for UK cooperation with the EU or its Member States on capacity-building in fragile states, the Government has published a “future partnership paper” on EU-UK foreign policy cooperation post-Brexit. In this document, it calls for an “unprecedented” partnership in terms of its “breadth (…) and degree of engagement”.203 While it does not reference CBSD directly, the paper does consider the possibility of continued UK participation in “mandate development and detailed operational planning” of Common Security and Defence Policy (CSDP) activities. The paper does not explore what institutional mechanisms might be necessary to facilitate such a close level of cooperation, considering the UK will no longer be represented on the EU bodies that oversee the EU’s Common Foreign and Security Policy.

Our assessment

16.31Although no formal steps towards adoption of the proposal have been taken since the previous Committee discussed the document in September 2016, we consider that the adoption of a negotiating mandate by COREPER on behalf of the Member States in December 2016 and the start of the trilogue process in July both constituted significant steps in the legislative process, of which the Committee should ideally have been appraised in advance.

16.32The substance of the legal text agreed between the Parliament and the Council is largely in line with the original Commission proposal. It makes clear that any funding granted for military capacity building could only be used for purposes of development or security for development. As in the Commission proposal, the EU would not be able to use the Instrument to fund recurrent military expenditure or the purchase of arms or ammunition.

16.33We wish to place on the record our concerns with respect to the Government’s handling of the scrutiny process for this legislative procedure. We are disappointed that the Minister did not inform us of the substance of the Council’s negotiating mandate before it was agreed at COREPER. This is normal practice, as part of the Government’s commitment to informing the Committee of important developments in the EU’s legislative process beyond formal decisions taken at Council.204 It is even more troubling that it took the Government six months to notify us of the adoption of the mandate after the fact. This is an unacceptably long delay, for which we have received no explanation. We have asked the Minister to explain why the delay occurred, and for a commitment that it will not happen again. We expect that future updates will be provided in a timelier fashion.

16.34While we have no further questions about the substance of the proposal, we ask the Minister to explain which existing EU budget lines are to be reduced to fund the €100 million endowment for CBSD activities under the amended Regulation, and what the impact of those reductions is likely to be. Finally, in line with the previous Committee’s report on transparency in the Council’s decision-making,205 we also urge the Government to push for the publication of the Council’s negotiating mandate. At present, it is still classified as LIMITÉ and therefore not available to the general public for scrutiny. Given that the document is an essential part of the legislative process, it should be made public without delay.

Implications of Brexit

16.35As the UK has now formally notified its intention to leave the EU, we have also assessed the proposal in the context of Brexit. We reiterate our predecessors’ conclusion that the amendment to the IcSP Regulation would create only a short-term financial instrument, and, as such, has no direct Brexit implications.206 However, the proposal could set the tone for a future long-term EU framework on CBSD operations, in which the UK may want to participate post-Brexit.

16.36In March 2017, the Prime Minister promised “detailed proposals” on the “scope of the partnership between [the UK and the EU] on both economic and security matters” which would be “deep, broad and dynamic”.207 While the Government has since published a “future partnership paper” outlining an ambitious vision for post-Brexit cooperation with the EU on foreign policy, we cannot conclude that its contents—with respect to the practical implementation of the new partnership, and the necessary institutional and legal framework—could be considered “detailed”. Similarly, the exact implications of the Prime Minister’s pledge that the UK will honour its financial commitments undertaken as an EU Member State are unclear. It seems likely to us that this would involve continued UK payments into the EU budget until all commitments under annual budgets agreed during the UK’s membership have been cleared, including any projects funded by the IcSP.

16.37We hope that further information is forthcoming about the Government’s position on continued budgetary contributions, and the mechanisms proposed to replace the UK’s current Treaty-based representation on the Foreign Affairs Council and its preparatory bodies.

Previous Committee Reports

(37930), 11037/16: Tenth Report HC 71–viii (2016–17), chapter 3 (7 September 2016).


172 €1 = £0.87365 as of 1 June 2017.

173 See Regulation 230/2014, article 1.

174 European Commission, “Capacity building in support of security and development“ (28 April 2015).

175 When in 2004 the European Commission proposed the Instrument for Stability (the predecessor for the IcSP over the 2007–2013 period) it did propose to extend the legal basis to the financing of long-term support for capacity building in the field of military peace support operations. However, the final text did not contain references to military or peace-support operations due to opposition from the co-legislators.

177 The Commission’s proposal forms part of the Commission’s package of measures to enhance the European Union’s effectiveness in supporting stability, security and development in third countries, laid out in a separate Joint Communication on Security Sector Reform. A summary of that policy paper, and our predecessors’ conclusions, are set out elsewhere in the Committee Report of [date].

178 Explanatory Memorandum submitted by the Foreign and Commonwealth Office (2 August 2016).

179 Although the Minister supplied us with a copy of the text of the negotiating mandate, it is still not publicly available from the Council’s Register of Documents. The text adopted by COREPER is still classified as “LIMITE” and as such we are able to cite from its contents or discuss its substance in detail.

180 See for more information “Transparency of decision-making in the Council of the European Union“ (26 May 2016).

182 On 22 September 2017, the Prime Minister said that none of the other EU Member States “will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave. The UK will honour commitments we have made during the period of our membership”.

184 European Commission, “Capacity building in support of security and development“ (28 April 2015).

185 Idem.

186 See the website of the European Commission for more information: http://ec.europa.eu/dgs/fpi/what-we-do/instrument_contributing_to_stability_and_peace_en.htm.

187 €1 = £0.87365 as of 1 June 2017.

188 See Regulation 230/2014, article 1.

189 When in 2004 the European Commission proposed the Instrument for Stability (the predecessor for the IcSP over the 2007–2013 period) it did propose to extend the legal basis to the financing of long-term support for capacity building in the field of military peace support operations. However, the final text did not contain references to military or peace-support operations due to opposition from the co-legislators.

190 The Athena Mechanism was established by Council Decision (CFSP) 2015/528 on the “mechanism to administer the financing of the common costs of European Union operations having military or defence implications”.

192 Joint Communication JOIN(2015) 17, “Capacity building in support of security and development“, p. 11.

193 The Commission’s proposal forms part of the Commission’s package of measures to enhance the European Union’s effectiveness in supporting stability, security and development in third countries, laid out in a separate Joint Communication on Security Sector Reform.

195 Explanatory Memorandum submitted by the Foreign and Commonwealth Office (2 August 2016).

196 Funding decisions under the IcSP Regulation are normally taken by the European Commission with the consent of a qualified majority of Member States in the Stability and Peace Instrument Committee. See article 5 of Regulation 182/2011, which lays down the applicable procedure.

197 See our predecessors’ Report of 7 September 2016.

199 See the Summary Record of the meeting of COREPER held on 7, 9 and 13 December 2016.

200 Although the Minister supplied us with a copy of the text of the negotiating mandate, it is still not publicly available from the Council’s Register of Documents. The text adopted by COREPER is still classified as LIMITE and as such we are able to cite from its contents or discuss its substance in detail.

204 For a recent example where the Government has informed the Committee ahead the adoption of a trilogue negotiating mandate at COREPER, see e.g. our Report of 8 February 2017 on the new Regulation on the security of gas supplies in the EU.

205 In their Report, our predecessors specifically noted that “where the Presidency decides (…) to secure a mandate for trilogues from COREPER, the document is not public”. They then concluded: “More transparency, particularly at the level of the preparatory bodies [including COREPER], might help to lift the lid on decision-making in the Council and reveal the extent to which legislation is simply nodded through by Ministers after negotiation by officials. There is scope for UK Ministers to provide Parliament with more information about, and explanation of, the actions they have taken on the UK’s behalf during this process”.

206 Although the issue of the UK’s budgetary commitments under the current MFF after it ceases to be an EU Member State is likely to be a controversial element of the Article 50 negotiations, we do not consider that the funding of the Instrument contributing to Stability and Peace raises any specific questions in this regard which are separate from the general matter of the UK’s financial obligations to the EU post-Brexit, if any.




20 November 2017