Explanatory Memorandum to COM(2013)445 - Implementation of the 11th European Development Fund - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2013)445 - Implementation of the 11th European Development Fund. |
|---|---|
| source | COM(2013)445  |
| date | 26-06-2013 |
Poverty remains a major problem in African, Caribbean and Pacific (ACP) States. Many of them are off-track towards the achievement of the Millennium Development Goals (MDGs) and they do not benefit from sustainable development. The EU is helping ACP countries address these problems. It is necessary for the EU to continue to support ACP countries' efforts towards reducing and eventually eradicating poverty, while attaining the objectives of sustainable development and achieving their gradual integration into the global economy.
The EU maintains privileged relations with the ACP group of developing countries under the Partnership Agreement between the ACP States of the one part, and the European Community and its Member States of the other part, signed in Cotonou on 23 June 2000 for a period of 20 years[1] (hereinafter referred to as the Cotonou Agreement). The European Development Fund (EDF) is the main instrument for providing EU assistance for development cooperation under the Cotonou Agreement with ACP countries and for cooperation with Overseas Countries and Territories (OCTs) under the Overseas Association Decision (OAD). The EDF is funded outside the EU budget by the EU Member States on the basis of specific contribution keys. Each EDF is concluded for a multi-annual period.
For the post-2013 multiannual financial framework, the European Commission proposed in its Communication ‘A budget for Europe 2020’[2] the overall volume (EUR 30 318.7 million in 2011 prices, i.e. EUR 34 275.6 million in current prices) for the 11th EDF for cooperation with ACP countries and OCTs. The Commission also adopted a Communication describing the main elements that could figure in the Internal Agreement for the 11th EDF, for the period from 1 January 2014 to 31 December 2020[3]. The assumption of the European Commission is that an agreement will be reached by the European Union and its Member States on laying down the financing mechanism (the 11th EDF), the exact period to be covered (2014-2020) and the amount of funds to be allocated to that mechanism, for implementing the ACP-EU Partnership, and that the Representatives of the Governments of the Member States will agree on an Internal Agreement for an 11th EDF. The European Council set the global amount of the 11th EDF in its Conclusions on February 8th 2013, i.e. EUR 30 506 million in current prices i.
New challenges, together with the priorities set out in the Europe 2020 Strategy, have prompted the Commission to make a proposal to adapt the 11th EDF Implementation Regulation in line with the Communication Increasing the Impact of EU Development Policy: An Agenda for Change[5] of 13 October 2011. The European Consensus on Development adopted on 22 December 2005 and the internationally agreed principles on aid effectiveness including the Busan Outcome Document (2011) also form part of the general policy framework for the programming and implementation of the 11th EDF.
Contents
The Commission held a public consultation on future funding for EU external action between 26 November 2010 and 31 January 2011. This process was based on an online questionnaire accompanied by a background paper What funding for EU external action after 2013?. In general, the replies did not suggest the need for a substantial change in the current implementing mechanisms, although a significant majority of respondents supported increased flexibility and simplification in implementation.
The Commission carried out an Impact Assessment (IA)[6] that considered 3 basic policy alternatives for each objective identified (more differentiation and concentration, strengthened coordination with EU Member States, more use of innovative financial instruments, further flexibility): a status quo option (no change compared to the 10th EDF), and an alternative option with two sub-options for amending the EDF framework. The status quo option was not accepted because it would not have solved the problems identified. The sub-options solved the identified problems to different extents, each having particular implications. The IA concluded that for each objective identified, the second sub-option which better adressed the new revised strategic orientations of the EU external action should be chosen as it:
– contributed through a sharpened geographical focus to targeting resources where they were most needed having the greatest possible impact and value added ;
– contributed through a sharpened sectoral focus to concentrating resources on a limited number of sectors, thus increasing the EU's critical mass;
– reinforced the efficiency and the political leverage of EU aid through increased division of labour among donors, joint programming and use of EU Trust Funds;
– increased the financial leverage of EU grant resources through use of innovative financial instruments;
– allowed the adaption of aid allocations rapidly to take into account evolving circumstances or specific situations (such as crisis, fragility or transition), or to implement a more incentives-based approach.
The main policy objectives of EU external action are set in the Lisbon Treaty (Art. 21 TEU). In addition, the main objective of EU development cooperation (Art. 208 TFEU) is the reduction and, in the long term, the eradication of poverty. In this context the EU will comply with the commitments and take account of the objectives they have approved in the context of the United Nations and other international organisations.
Regarding cooperation with ACP countries and regions, this legal framework is complemented by the Cotonou Agreement.
This proposal is presented by the Commission on the basis of an Internal Agreement for the 11th EDF[7] which foresees that a Council Regulation on the implementation of the 11th EDF under the Cotonou Agreement should be adopted by unanimity, on a proposal by the Commission and after consulting the European Investment Bank (EIB).
The 11th EDF Implementation Regulation was prepared with the following objectives:
– in line with the key principles of simplification and increased effectiveness, to align the text as much as possible with the main provisions of the Commission proposal for a Regulation of the European Parliament and of the Council establishing a financing instrument for development cooperation (DCI)[8] (in particular on programming) and of the Commission proposal for a Regulation of the European Parliament and of the Council establishing common rules and procedures for the implementation of the Union's instruments for external action (CIR)[9] (in particular on implementation) which entails simplified and harmonised implementing rules and procedures for all external action instruments (except the EDF and Greenland). This effort for alignment also takes into account the results of the negotiations in Council on these texts (Coreper level) as well as in Parliament Committees when this proposal was drafted, regarding compromises being acceptable for the Commission. Moreover, the Commission reserves the right to adapt this proposal after its adoption, during the negotiations with the Council, in order to continue to ensure coherence with the texts of the DCI and the CIR being negotiated in parallel. This alignment will help pave the way towards possible inclusion of the EDF into the EU budget in the Multiannual Financial Framework post 2020, in line with the Commission proposals made in the above mentioned Communication ‘A budget for Europe 2020' and with the European Council Conclusions of February 8th 2013.
– to ensure the compliance of the text with the provisions of the Cotonou Agreement, in particular its annex IV on implementation and management procedures, while simplifying the text compared to the 10th EDF Implementing Regulation[10].
Title I: Objectives and general principles – Articles 1 and 2
Article 1 (Objectives and eligibility criteria) is aligned as far as possible with Article 2 of the Commission proposal for the DCI Regulation on objectives and eligibility criteria, while including also a reference to the broader objectives, principles and values described in the Cotonou Agreement, as well as to the development objectives and cooperation strategies set out in the policies developed by the Union, including the Agenda for Change. This Article also requires fulfilling the criteria for Official Development Assistance (ODA) established by the OECD/DAC to the greatest extent possible. It also explains complementarity between the Humanitarian and EDF instruments.
Article 2 (General principles) is aligned with Article 3(5) to 3(10) of the Commission proposal for the DCI Regulation. It sets out the main principles governing the implementation of the Regulation, which are strengthened coherence of EU external action, improved coordination with the Member States and other bilateral or multilateral donors, and a partner country-led and region-led development process with mutual accountability, through an inclusive and participatory approach to development, using effective and innovative cooperation modalities in line with OECD/DAC best practices, thus improving the impact of aid and reducing overlap and duplication.
Title II: Programming and allocation of funds – Articles 3 to 7
Article 3 (General framework for allocating funds) lays down the framework for allocation of funds under the EDF. It is aligned as far as possible with Article 3(2) of the Commission proposal for the DCI Regulation on the principles of a differentiated approach towards the partner countries. Article 3 provides for the application of the principles of the Communication Increasing the Impact of EU Development Policy: An Agenda for Change to the EDF, while also ensuring that the requirements of the Cotonou Agreement regarding resource allocation (criteria described in article 3 of annex IV of the Cotonou Agreement) are respected. Therefore the allocation criteria are described in two paragraphs: paragraph 1 recalls the Cotonou requirements on needs and performance and paragraph 2 provides more specifically the differentiation principles of the Agenda for Change in the determination of the indicative national allocations (needs, capacities, commitments, performance and impact).
Article 4 (General framework for programming) lays down the general framework for EDF programming under this Regulation. The Article recalls the principles of partnership and alignment of the Cotonou Agreement, i.e. that programming should be done whenever possible jointly with the partner country or region concerned and increasingly aligned with their poverty reduction strategies. The Article also takes elements from Article 10(2) of the Commission proposal for the DCI Regulation: in order to ensure synergies and complementarity of the Union’s measures and those of the Member States, the latter will be fully involved in the programming process, including through joint programming. The participation of all Member States including those not locally represented is foreseen because of the specific nature of EDF funding. Consultation processes will also involve other donors and development actors as well as civil society and regional and local authorities.
Article 4(3) describes circumstances foreseen in the Cotonou Agreement where the Commission can establish specific provisions for programming and implementing development aid unilaterally.
Article 4 i recalls the EU's objective of concentrating assistance announced in the Communication Increasing the Impact of EU Development Policy: An Agenda for Change, with a limitation to 3 sectors of intervention for bilateral programming, in line with Article 5 i of the Commission proposal for the DCI Regulation.
Article 5 (Programming documents) is aligned as far as possible with Article 11 of the Commission proposal for the DCI Regulation. It outlines the requirement and principles for preparing strategy papers for the countries and regions and, based on these, multiannual indicative programmes. The article also lists the cases when a strategy paper would not need to be prepared in order to simplify and streamline the programming process as well as to favour joint programming with Member States and alignment to the national programmes of developing countries. Thus the Article also introduces the possibility of having a Joint Framework Document that would lay down a comprehensive Union strategy, of which development policy would be part of. In line with the principle of partnership of the Cotonou Agreement, the agreement of the partner country government to use alternative programming documents is required; otherwise a strategy paper will have to be drafted.
Articles 5(5) and 5(6) provide for EDF-specific types of programming as foreseen in the Cotonou Agreement, i.e. for intra-ACP cooperation and special support programmes.
Article 6 (Programming for countries and regions in crisis, post-crisis or fragility situations) is aligned with Article 12 of the Commission proposal for the DCI Regulation. It emphasises the special needs and circumstances of countries in crisis, post-crisis or fragility situation, which ought to be considered at the time of drafting of programming documents.
Article 7 (Approval and modification of programming documents) is aligned as far as possible with Article 14 of the Commission proposal for the DCI Regulation on the approval of strategy papers and on the adoption of multiannual indicative programmes. The Article states that programming documents (i.e. strategy papers, multiannual indicative programmes and special support programmes) are approved by the Commission in accordance with Article 14 of this Regulation. It also reflects the provisions in the Cotonou Agreement regarding transmission of documents to the Joint Parliamentary Assembly and endorsement of programming documents by the ACP State or region after adoption by the Commission. It provides for the review of programming, and the revision where appropriate (in case of substantial evolution of the strategy or of the programmed priorities) of the corresponding documents. The Article provides flexibility and simplification by establishing cases of non-substantial modifications, of which the EDF Committee is informed. The Article also foresees a special urgency procedure for modifying the programming documents on duly justified grounds of urgency, equivalent to the comitology procedure in article 8 of Regulation 182/2011[11], as provided for by Article 14(10) of this Regulation.
Title III: Implementation – Articles 8 to 13
Article 8 (General framework for implementation) sets the general framework for implementation of EU assistance in relation with the Financial Regulation of the 11th EDF.
Article 9 (Adoption of action programmes, individual measures and special measures) is aligned as far as possible with Article 2 of the Commission proposal for the CIR Regulation. It provides the principle that financing decisions taken by the Commission are to be in the form of action programmes, based on the multiannual programming documents. However, in line with the multiannual programming documents, individual measures can be also adopted outside the action programme framework. In the event of specific cases (exceptional circumstances or unforeseen needs) provided for in the Cotonou Agreement, the Commission may also adopt special measures not provided for in the multiannual programming documents. The Article establishes the procedures for the adoption of the mentioned financing decisions. It also provides for specific environmental screening, including Climate Change and Biodiversity impact.
Article 10 (Additional Member State contributions) describes the conditions for the management of voluntary contributions which can be provided by Member States to the Commission or the EIB in accordance with the 11th EDF Internal Agreement.
Article 11 (Taxes, duties and charges) describes possible arrangements with respect to taxes, duties and charges, in line with Article 5 of the Commission proposal for the CIR Regulation, while respecting the provisions of Article 31 of Annex IV of the Cotonou Agreement.
Article 12 (Protection of the financial interests of the Union) is aligned with Article 7 of the Commission proposal for the CIR Regulation. It lays down measures to protect the Union's financial interests, and in particular to enable it (notably the Commission, the Court of Auditors and OLAF) to carry out all the necessary controls and checks on the measures implemented.
Article 13 (Rules on nationality and origin for public procurement, grants and other award procedures) is not aligned with Articles 8 and 9 of the Commission proposal for the CIR Regulation, as it refers to the provisions on rules on nationality and origin which are defined in Article 20 of annex IV of the Cotonou Agreement.
Title IV: Decision-making procedures – Articles 14 to 16
Article 14 (Responsibilities of the EDF Committee) describes the tasks and the involvement of the EDF Committee in the implementation of this Regulation. It aligns EDF procedures with Article 15 of the Commission proposal for the CIR, which refers to the Regulation on comitology procedures. The procedures are equivalent mutatis mutandis to Article 3 (common provisions), 5 (examination procedure) and 8 (urgency procedure) of Regulation 182/2011 on comitology.
Article 15 (The African Peace Facility) establishes ad hoc procedures for the management of the African Peace Facility.
Article 16 (The Investment Facility Committee) describes the structure and the functioning of the Investment Facility Committee, set up under the auspices of the EIB according to the Internal Agreement, in the implementation of this Regulation. It also describes the modus operandi and conditions for EIB operations.
Title V - Final provisions – Articles 17 to 22
Article 17 (Participation by a third country or region) is based on the 10th EDF implementing Regulation, taking into account Article 15 of the Commission proposal for the DCI Regulation. It provides for the possibility to extend the eligibility of funding under the EDF envelope dedicated to ACP countries to non-ACP developing countries and regional integration bodies with ACP participation. It also promotes the reinforcement of regional cooperation programmes between ACP countries, OCTs and Union's outermost regions.
Article 18 (Monitoring, reporting and evaluation of EDF assistance) is aligned with Articles 12 and 13 of the Commission proposal for the CIR Regulation. It commits the Commission and the EIB to regularly evaluate the results of the implemented policies and programmes and projects, and for the Commission, to look at the effectiveness of programming itself, and to prepare a biennial Commission report on the progress and implementation of this Regulation. It also provides for a Performance review to assess the degree of realisation of commitments and disbursements and the results and impact of the aid provided, and for a mid-term and end-term evaluations of the ACP Investment Facility, as foreseen in Annex II to the Cotonou Agreement.
Article 19 (Climate action and biodiversity expenditure) is aligned with Article 14 of the Commission proposal for the CIR Regulation. It provides for a specific tracking system based on the OECD methodology (‘Rio markers’).
Article 20 (European External Action Service) is a horizontal article to be found in all Commission proposals for the Regulations on external action, such as Article 21 of the Commission proposal for the DCI Regulation. It highlights that this Regulation is to be applied in accordance with the Council Decision establishing the organisation and functioning of the European External Action Service[12], in particular Article 9 thereof.
Article 21 (Transitional measures) provides for a bridging facility to ensure the availability of funds in case of late entry into force of the 11th EDF, in particular in view of possible delays in the ratification process of the 11th EDF Internal Agreement. Until the entry into force of the 11th EDF, action programmes, individual measures, special measures and specific action programmes for support expenditure should thus be financed within the limits of the balances of the previous EDFs and from funds decommitted from projects under these EDFs. Funds committed[13] under the bridging facility should be accounted for under the 11th EDF. By adopting the current regulation by unanimity, the Council takes the decision on the use of the balances of previous EDFs, described in Article 1(5) of the 10th EDF Internal Agreement and in Article 5 of Annex Ib to the Cotonou Agreement. This Article also provides for the continuation of the 10th EDF Financial Regulation pending the entry into force of the 11th EDF Financial Regulation.
Article 22 (Entry into force) provides that this Regulation shall apply from 1 January 2014 until the final date of application of the 11th EDF Internal Agreement.