Select Committee on European Communities Minutes of Evidence

Memorandum by the Department for International Development


  This memorandum has been prepared by the Department for International Development (DFID) with assistance from the Department of Environment, Transport and the Regions (DETR), in response to a request from the European Communities Committee, Sub-Committee C (Environment, Public Health and Consumer Protection), which is conducting an enquiry into environmental aspects of the EU/TACIS programme.

1. Nature and scale of environmental problems in the NIS

  1.1 The Newly Independent States of the former Soviet Union face immense environmental problems. These are largely the legacy of the Soviet period. The size of the NIS coupled with the wide variations in climate and levels of industrialisation contributes to the diversity of environmental problems. The Western NIS countries have large urban populations, heavy industry, high levels of ambient air pollution, water pollution and large volumes of municipal and industrial waste. The Central Asian Republics are less densely populated with economies driven by the extraction of natural resources and irrigated agriculture.

  1.2 Economic decline has brought about a reduction in air and water pollution but now measures are needed to ensure that economic recovery will be developed in an environmentally sustainable manner. Priorities are the reduction of health risks (in particular, by improving access to safe drinking water and tackling the most severe cases of industrial pollution and hazardous waste), and institutional improvements in order to integrate environmental considerations into policy in other sectors. It is also important to improve monitoring procedures, streamline regulations, strengthen enforcement mechanisms, and to improve environmental awareness amongst the public. A note on specific issues is at Annex A.

  1.3 In the Russian Federation, the Action Plans of the Government for 1994-95 and 1996-97 were the first attempt to formulate a new national policy in the field of environmental protection. Building on this experience, the State Committee for Environmental Protection is currently preparing a National Environmental Action Plan (NEAP) for 1998-20 (expected to be approved in summer 1998). In Ukraine, Main Directions of State Environmental Policy were prepared in 1995 and approved by the Cabinet in 1997. They are expected to be adopted by Parliament in 1998. The National Environmental Programme of Belarus for 1996-20 was approved in 1996. Kyrgyzstan and Moldova approved NEAPs in 1995. Kazakhstan, Uzbekistan, Armenia, Azerbaijan and Georgia are preparing NEAPs for approval in 1998.

  1.4 The willingness and ability of polluters to pay for investments to resolve environmental problems is very low and, in some cases, non-existent in the NIS. In many NIS, state and municipal budget allocations for the environment have fallen significantly. The capacity and effectiveness of environmental funds, capitalised by environmental charges and taxes, is weak. Foreign direct investment is low.

  1.5 The Environment for Europe process, launched at the Dobris Castle Conference in 1991, provides an effective political framework for environmental co-operation in the UN European region, including all the NIS countries. Policy reform, institution building and priority investments are promoted in line with the Environmental Action Programme for Central and Eastern Europe (1993), although progress has been greater in Central Europe than the NIS countries. The next Environment for Europe Ministerial conference will be held in Aarhus, Denmark, in June and is expected to call for a greater focus on the problems of the NIS countries, including more emphasis on the environment in the TACIS programme.

2. Priorities for action under the TACIS programme

  2.1 The EU began supporting reforms in the Soviet Union in 1990. This led to the creation of the TACIS programme of technical assistance to 12 of the successor independent States (i.e., excluding the three Baltic States), plus Mongolia, with the aim of supporting the transition to a market economy and reinforcing democracy. It is the largest single provider of technical assistance to the region with 2,268 mecu committed so far.

  2.2 The current TACIS Regulation, adopted in 1996, provides the legal base for the programme for the four-year period to 2000. The Regulation sets a "financial reference amount", or allocation, of 2,224 mecu for the programme, and actual budgets are then approved annually by the European Council and Parliament.

  2.3 The Regulation identifies six priority areas for assistance:

    —  human resources development;

    —  enterprise restructuring and development;

    —  infrastructure;

    —  energy, including nuclear safety;

    —  food production, processing and distribution;

    —  the environment, with particular reference to institutional strengthening, legislation and training.

  2.4 Environment was added in 1996 as a priority area, largely at the instigation of the UK and one or two other Member States. In addition, the Regulation stresses the importance of taking account of environmental considerations in the design and implementation of the programme as a whole. A full list of TACIS environment projects is at Annex B.

3. Relationship between TACIS and other forms of official assistance

  3.1 The demands of the NIS region are huge, and there is scope for all donors to be active. The technical assistance funded by TACIS and by bilateral donors, including Germany and the UK, combined with the investment funding of the World Bank and EBRD should be mutually reinforcing. But the May 1997 TACIS Interim Evaluation reported a lack of co-ordination between donors.

  3.2 World Bank Consultative Groups offer a formal forum for donors to exchange views on country programmes (except Russia), and there are also informal in-country donor co-ordination meetings, some on specific issues. The Environment for Europe process is an important framework for co-ordinating environmental assistance.

  3.3 The scale of TACIS resources should give it more leverage over beneficiary government policies compared with the effects of more modest bilateral programmes such as the UK Know How Fund. We try to influence the shape of the TACIS programme by sharing examples of best practice and experience of our own projects.

4. Success of Partnership and Co-operation Agreements in providing a satisfactory framework for environmental programmes and projects

  4.1 Partnership and Co-operation Agreements (PCAs) between the EU and the successor states to the Soviet Union are intended to replace and enhance the 1989 EC/USSR Trade and Economic Co-operation Agreement. PCAs have now been signed with almost all the successor states and those with Russia and Ukraine have entered into force. Inter alia, the PCAs provide for co-operation in a wide range of areas, including environment.

  4.2 Article 69 of the PCA between the EU and Russia, for instance, commits the Parties to develop co-operation on the environment and human health. The inaugural Co-operation Committee was held in Brussels on 22 April 1998 and accepted the establishment of a sub-committee which will cover the environment (along with energy and nuclear issues). The main goal is to combat the deterioration of the environment in all problem areas, for which technical assistance is available through TACIS.

  4.3 We expect that a similar approach will be followed as other PCAs come into force; preparation is now under way for the inaugural Co-operation Council between the EU and Ukraine in June, where nuclear safety and the protection of the environment will certainly be on the agenda.

5. New Emphasis on environment in the 1996 TACIS Regulation

  5.1 Before 1996, support for the environment was channelled through the interstate programme, rather than individual country programmes. The Cross-Border Co-operation programmes and the TACIS Action Plans for Russia in 1997 and Ukraine in 1998 included discrete environmental projects in the country programme for the first time. Environment projects now account for around 10 per cent of the funding allocated to Russia and Ukraine, and environmental factors are taken into consideration in all TACIS projects.

  5.2 In reporting its activities by sector, TACIS combines statistics on environment with nuclear safety. The combined environment/nuclear safety sector received the largest share of TACIS resources in 1996 (141.5 mecu), but most of it is for nuclear safety, including the rebuilding of the Chernobyl sarcophagus.

  5.3 The TACIS Interim Evaluation reflected the low priority given to the environment up to that time. It found that the impact of TACIS in promoting environmental awareness among its project partners had been low. Our impression is that TACIS's performance on the environment has improved recently although it is too early to assess the results.

6. TACIS as a "people-to-people" programme

  6.1 In the 1996 TACIS Annual Report Commissioner Van den Broek suggested that the key characteristic of TACIS was that it was a "people to people" programme. In the sense that the programme consists mainly of the transfer of know-how from European experts to NIS counterparts, the description is accurate. The Interim Evaluation found that "one main strength of TACIS lies in [this] approach. Tens of thousands of NIS managers, experts, administrators (and some politicians) have met their EU counterparts . . . This joint work gives a wider view, leading to a better and in depth understanding of the problems."

  6.2 The TACIS Country Action Programmes are constrained by the need to secure partner government approval, for both sectoral focus and project proposals. They are also frustrated by complex internal EC procedures, institutional barriers and long chains of command. But there are some small programmes, such as the Lien and Partnership and Co-ordination Programmes, which are open to all NIS countries and which are not subject to the same procedural requirements as the Country Action Programmes. Projects under these programmes are proposed by non-governmental and private organisations in the EU and NIS, and as such, constitute a "people-to-people" approach.

7. European Commission organisation and the resources needed for efficient management of the programme

  7.1 EC aid has a complex management structure. Five different Directorates General (DGs) are involved (see Annex C). Each has different priorities, programmes, and procedures.

  7.2 The Commission has decided to form a Common Services Unit for management of all external assistance, and is aiming for it to be operational by September 1998. (Phillipe Soubestre will head the new structure.) This should bring improvements (e.g., harmonisation of procedures), but much will depend on the final division of responsibilities, lines of responsibility, and communication with the DGs/Delegations. We are concerned that the project cycle will be split in two (with policy and project identification and design the responsibility of the DGs; and contracting, monitoring and evaluation left for the new structure).

  7.3 Reorganisation is an internal Commission activity and there is no formal role for Member States. But Member States have a legitimate interest in the effectiveness of the new arrangements. DFID is keeping in close touch with the Commission. We are willing to offer any assistance which would be useful.

  7.4 The programme is accountable to Member States which are represented in management committees (see Annex D) and approve projects and programmes to be financed under the main budget lines. DFID represents the UK. The Court of Auditors examines and reports on all Community expenditure. The European Parliament does not have a formal role in implementation of aid programmes; but it has a major role in the budget process and the final budget requires the signature of its President. Member States also participate in an evaluation working group which has met approximately quarterly this year to oversee the Commission's work on evaluation of all its aid programmes.

  7.5 The Commission is not uniformly effective. DGVIII is the best of those involved with aid. There are problems generally in staffing (there is a lack of professional expertise in key areas and insufficient support staff), systems and organisational structure. The Commission's own internal project cycle management guidance stresses the importance of cross cutting issues (e.g., environmental and social issues) in the project cycle. But continuing efforts are required to ensure this is always fully reflected in the design and implementation of projects and programmes.

  7.6 In order to improve effectiveness, DFID is providing secondees (detached national experts) to the Commission in key areas (see Annex E). There is also regular contact between DFID and Commission staff. We take an active role in management committees, discussing wider systems and procedures as well as projects. During our Presidency we have worked on following up two important resolutions (1993 Poverty Resolution and 1995 Gender Resolution), reviewing progress and what more needs to be done to improve effectiveness. Conclusions on these Resolutions were agreed at the Development Council on 18 May 1998.

8. Criticisms by the European Court of Auditors and European Parliament; recommendations of the Interim Evaluation Report

  8.1 The Court of Auditors found that complex procedures and staff shortages in the Commission and the field have led to some serious delays to both environmental projects and the nuclear safety programme. The TACIS programme is basically constrained by the administrative procedures imposed upon it by the 1977 Financial Regulation covering all EC programmes.

  8.2 In its 1996 Annual Report, the Court of Auditors found that TACIS commitments were loaded heavily towards the end of the year, owing to the late agreement of the new TACIS Regulation and Indicative Programmes for the period 1996-99. The Commission had made commitments totalling about 1500 mecu, but had failed to enter into contracts. In response, TACIS has cancelled 70 programmes and 559 contracts, totalling 31.3 mecu, which had never been implemented. Progress was made to improve contracting performance in 1997, with 700 mecu worth of contracts agreed, 60 per cent more than in 1996, reducing the backlog of uncontracted commitments to 530 mecu.

  8.3 The Commission has accepted many of the criticisms made by the Court of Auditors, but argues that general political and sectoral uncertainties are a major constraint to efficient programme management. TACIS has begun to focus activity on fewer key areas and to reduce the number of contracts let.

  8.4 The Commission has rejected the TACIS Interim Evaluation recommendations that the demand-driven approach weakens the programme and should be replaced by a dialogue through the Partnership and Co-operation Agreements. The Commission's argument is that the purpose of the Agreements is to govern political relationships between the EU and partner countries; TACIS is just one of the instruments which may be used to facilitate the Agreements.

  8.5 Project cycle management training has been introduced, communication strategies are being improved, and financial procedures have been simplified, but the TACIS and general financial regulations impose stringent procedures on the Commission which it cannot escape. In addition, DG1A has been unable to increase its staff numbers.

9. Obtaining best value from consultants

  9.1 TACIS's general approach to the use of consultants is in line with that of other donor agencies. The NIS is a difficult part of the world in which to work as counterpart institutions typically have poor project preparation skills and limited resources. In consequence it is often difficult to obtain project ownership and inputs by beneficiaries.

  9.2 Two factors affect the value obtained from services provided by consultants on TACIS funded environment projects:

    (a)  there is often a considerable delay (typically 1-2 years) between project identification and the start of project implementation. By then, needs may have changed and beneficiaries have sometimes lost sight of the original agreements and commitments they made during project design. This compels consultants to devote a high proportion of their time and energy to discussing and agreeing the inputs expected from project beneficiaries. This reduces the amount of resources that can be allocated by consultants to the provision of technical inputs.

    (b)  administrative inflexibility and contractual delays in DG1A mean that consultants spend a lot of time on contract management. Any changes in project design which involve a transfer of funds between budget lines require a contract addendum, which takes about 2-6 months to process. This makes it difficult for consultants to respond to the changing needs and demands of the beneficiaries, and leads to dissatisfaction among all parties.

  9.3 These factors can have a dramatic impact, as they affect the amount of time that consultants can spend on the delivery of technical assistance. As a result, management costs typically comprise a high proportion of the total costs of TACIS-funded environment projects (particularly those operating at the Inter-State level).

  9.4 A note on TACIS selection procedures is at Annex F.

10. Strength and influence of environmental NGOs in the NIS

  10.1 The green movement emerged in the Soviet Union in the mid-eighties and were the first NGOs to be tolerated by the authorities. Most other so-called NGOs were under the control of the Communist Party.

  10.2 It is not easy to assess the influence of the NGOs. They are weak in the sense that they have not been able to mobilise public opinion to force governments to take the environment more seriously. They are up against enormous odds—the basic social needs of large groups of people are not being met and people have more on their minds than the environment. However, the groups have strengths. Heavily based on the institutes and universities, they are intellectually strong and add much to the debate on the environment. Occasionally this intellectual rigour has won the argument—in particular in the referendum against building a nuclear power plant in Kostroma, Russia—but also for Russia in the success in the courts of groups such as Eco-Juris and the Centre for Human Rights and Environmental Defence. The large number of good environmental magazines and bulletins in Russia is due to the work of the NGOs.

  10.3 There are environmental NGOs in Russia with which western governments and organisations can usefully work. This is a great improvement on the situation a few years ago.

  10.4 In Ukraine, the green movement became much stronger after the Chernobyl nuclear disaster: many people joined the movement, which allowed them to participate in a kind of "opposition" which was safer than human rights or independence movements. In 1989-90, when other political movements and parties began to appear, the green movement lost more than half of its activists to these new groups.

  10.5 Green NGOs are still the most numerous in Ukraine. The most promising area for policy co-operation is found between NGOs and local authorities. NGOs tend to be seen as important during election campaigns, and can occasionally influence decisions by organising rallies and campaigns.

  10.6 Regional Environment Centres are being established with TACIS and other donor support in Moldova, Ukraine, Russia, Georgia and Kazakhstan to encourage the growth of environmental NGOs.

  10.7 Further details of environmental NGOs in Russia and Ukraine are in Annex G.

11. Lessons learned from PHARE experience

  11.1 The PHARE programme suffered in the past from a number of problems still experienced by TACIS, namely long delays between project identification and implementation, administrative inflexibility and delays in amending contracts. In addition, there was little active consultation between PHARE project officers and the intended beneficiaries, with the effect that some projects did not accurately reflect the needs of these institutions.

  11.2 The efficiency and effectiveness of the PHARE programme has improved considerably over the past 18 months. In part this is due to pressure from beneficiaries for greater involvement during project design. It also reflects an increasing awareness by beneficiaries to identify their requirements more clearly, and to play a more active role in project development.

  11.3 Contracting of consultants by PHARE is now quicker and more efficient. PHARE has established a framework contract, in which consultants help in the design, management and contracting of PHARE environment projects. This eases the pressure on PHARE staff resources. Tender lists are also more specific, so that proposals are received from consultants with more relevant experience. In consequence there is less delay between project design and the start of project implementation. Projects more accurately reflect the needs of the beneficiaries, and there is less need to amend the terms of reference (which can result in contractual delays).

  11.4 The performance of the overall PHARE programme is currently being evaluated, at the request of the European Parliament. A draft report on the conclusions is expected later this year.

  11.5 There is no evidence that TACIS has actively incorporated any lessons learned from PHARE experience into its own programme.

12. Role of the European Environment Agency

  12.1 The main role of the European Environmental Agency (EEA) is to produce objective, reliable and comparable information for those concerned with developing European environmental policy, and for the wider European public. The EEA's programme of co-operation with the PHARE countries has proved necessary in order for the Agency to produce a pan-European state of the environment report, Europe's Environment: The Second Assessment (known as the Dobris+3 Report), as requested by the Sofia Ministerial Declaration.

  12.2 The EEA is, through the TACIS programme, working to secure funding for environmental information concerning countries in Eastern Europe beyond the PHARE countries. Co-operation is under development in two stages: short term needs for immediate reporting requirements and a longer term perspective beyond 1998. The broad objective of the immediate requirements to be implemented in 1998 is to provide the additional resources and technical assistance necessary for the NIS and EEA to collaborate in activities linked with the preparation of the Dobris+3 report.

  12.3 The Government considers it is desirable to build on this work, extending co-operation to TACIS countries in order to improve the state of reporting on Europe as a whole.

Eastern Europe and Central Asia Department

Department for International Development

May 1998

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