11672-13
COM (2012) 445 final
EXPLANATORY MEMORANDUM ON A COMMISSION STAFF WORKING DOCUMENT ON:
Proposal for a Council Regulation on the Implementation of the 11th European Development Fund
Submitted by the Department for International Development
Date: August 2013
Subject Matter
1. The Multi-Annual Financial Framework (MFF) agreement at the February 2013 European Council agreed an overall figure of €30.5 billion (£26.6 billion) for the European Development Fund (EDF) for the period 2014 - 2020. The EDF is the main instrument for providing EU development assistance to 78 Africa, Caribbean and Pacific (ACP) countries under the Cotonou Agreement and for cooperation with Overseas Countries and Territories (OCTs) under the Overseas Association Decision (OAD).
2. There are several parts to the EDF agreement which specify the allocation and management of the fund: the Internal Agreement; the Implementing Regulation; and the Financial Regulation. The EDF11 Internal Agreement received the necessary scrutiny clearance in June and was signed by Member States at the Foreign Affairs Council on 24 June 2013. This agreed the overall amount, high level funding envelopes and Member State contributions. This communication outlines the Commission’s proposal for the 11th EDF Implementation Regulation. The Commission will present its proposal for the Financial Regulation in the autumn.
3. The Implementing Regulation sets out the programming process and monitoring framework for all EDF11 funds that will be spent on country and regional programmes, intra-ACP programmes such as the Africa Peace Facility, and the Cotonou Investment Facility.
4. The EDF11 Implementing Regulation complies with the provisions of the Cotonou Agreement and aligns, where appropriate, with the main provisions of other development instruments, particularly the Instrument for Development Cooperation (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, if Member States wanted this.
5. The recitals in the Regulation’s preamble set out the broader policy framework, including the Agenda for Change communication of 2012 and internationally agreed principles on aid effectiveness.
6. Title I covers general principles and objectives, which remain primarily the eradication of poverty. Additionally from EDF10, objectives now include sustainable economic, social and environmental development and consolidating democracy, the rule of law, good governance, human rights and international law. General principles continue to reflect the unique partnership model of Cotonou by ensuring effective cooperation with partners, democratic ownership and domestic accountability for development policies. A welcome addition is the principle of using a results-based approach to development.
7. Title II covers the programming and allocation of funds, where the allocation of resources must be in line with both Cotonou Agreement criteria and the Agenda for Change. This includes the adjustment of allocations based on a review process outlined in Cotonou. Under the principle of partnership, all programming is to be done in jointly with partner countries and aligned with their own development strategies. Joint programming and coordination between the EU and Member States present in partner countries should be strived for wherever possible and particular note is made of programming in fragile states. In an attempt to simplify and streamline the programming process from EDF10, and in line with similar changes to the DCI regulation, separate strategy papers may no longer be required. Another notable development from EDF10 is that countries will no longer receive a provisional ‘B envelope’ for unforeseen needs, instead the Commission have confirmed in ACP Working Group that a central unallocated reserve will be created to improve flexibility and ensure funding for countries in need. Approval of programmes is through the EDF Committee as it was under EDF10.
8. Title III encompasses Implementation. As in EDF10, it is proposed that financing decisions taken by the Commission are in the form of annual action programmes, which are based on multiannual programming documents aligned to partner countries’ strategies and budgets. In the event of duly justified cases provided for in the Cotonou Agreement, such as unforeseen needs in countries which, due to exceptional circumstances, cannot access normal programmable resources, or when an ACP State faces a crisis situation as the result of a war or other conflict, the Commission may exceptionally adopt special measures not provided for in the multiannual programming documents. This regulation outlines the rules that need to be followed for the adoption of these decisions, as well as the possible exceptions thereto.
9. Title IV sets out decision-making procedures and responsibilities of the EDF and Investment Facility Committees, much like EDF10. Ad hoc procedures for the management of the Africa Peace Facility are also set out. As previously, this is demand driven by requests from the AU with a unique decision-making procedure of action programmes agreed by the Peace and Security Committee and Coreper before adoption by the Commission.
10. Title V outlines Final Provisions, including a bridging facility to ensure the availability of funds for priority projects in case of late entry into force of the EDF11. This also includes a key article on monitoring, reporting and evaluation, where it is proposed that the Commission regularly evaluates the results of the implemented policies and programmes, as well as the effectiveness of the programming itself. Under this proposal, the Commission will report every two years on the progress and implementation of the regulation, as well as the degree of realisation of commitments and disbursements, and the results and impacts of the aid provided. Finally, annual tracking of climate action and biodiversity expenditure based on the OECD methodology (‘Rio markers’) is foreseen to ensure that actions protecting the environment are adequately addressed and monitored.
Ministerial Responsibility
11. The Secretary of State for International Development is responsible for UK policy on EU development matters.
Interest of the Devolved Administrations
12. The UK’s Foreign Affairs, Defence, and International Development policies are reserved matters under the UK’s devolution settlements and no devolved administration issues arise in these fields.
Legal and Procedural Matters
13. Legal basis: The proposal is based on the Internal Agreement between the Representatives of the Governments of the Member States, meeting within the Council, on the financing of EU aid under the multiannual financial framework for the period 2014 to 2020, in accordance with the Cotonou Agreement, and on the allocation of financial assistance for the Overseas Countries and Territories to which Part Four of the TFEU applies (the 11th EDF internal agreement”), and in particular Article 10(1) thereof. The document is prepared in line with policy objectives of EU external action as set out in the Lisbon Treaty (Art. 21 TEU) and the objective of EU development cooperation (Article 208 TFEU).
14. Voting procedure: Unanimity, based on a proposal by the Commission and after consulting the EIB
15. Impact on UK law: None.
16. Application to Gibraltar: No specific application to Gibraltar in respect of this document, although EU law on development issues does apply to Gibraltar.
17. Application to the European Economic Area: None.
18. Subsidiarity: No issue of subsidiarity arises from this Communication.
19. Fundamental Rights Analysis: No fundamental rights issue arises.
Policy Implications
20. The two overarching policy implications of the proposed EDF11 Implementing Regulation are firstly, the alignment of text with the main provisions of DCI and CIR. This should make it as easy as possible for partner countries to receive funds from multiple sources, for example where ACP countries also benefit from the DCI global thematic instruments. The objective of aligning with other external action instruments is to improve overall EU aid effectiveness, as well as allowing for the possibility of incorporating the EDF into the EU budget post 2020 if desired. The UK supports the drive for coherent procedures between the EDF and instruments on the EC Budget where appropriate and without compromising the unique partnership model provided by Cotonou.
21. Secondly, the reflection of principles enshrined in the Commission’s Agenda for Change Communication. This seeks to increase the impact of the EU’s development policy by targeting countries that are in the greatest need of support and where funding can have the most impact. The UK supports this 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), as well as the recommendation of a maximum of three priority focal sectors per national programme, and a stronger focus on the results that EU funding should achieve.
UK position
22. The UK supports the broad policy framework and the general principles and objectives of the EDF (included in the preamble and Title I), as updated from EDF10. We particularly welcome the addition of the principle of using a results-based approach to development.
23. We also largely support the provisions on programming and allocation of funds (Title II). We welcome a transparent and objective process to decide national allocations, with resources targeted where they are needed most and where they could have the greatest impact. In line with the Agenda for Change and the Cotonou Agreement, this will prioritise interventions accordingly to level of development, performance and long term development strategy, taking into account vulnerability and fragility. The UK is clear that EDF11 should increase its poverty focus, whilst still ensuring protection for vulnerable states and we support an increased focus on fragile states. We will seek to ensure that the EDF Management Committee has sufficient oversight over the resource allocation process via the standard approval procedure.
24. However, we want greater clarity on commitments to EU joint programming and the change in use of ‘B’ envelopes for unforeseen needs. The UK supports greater EU coordination at country level but this must be voluntary, pragmatic and flexible, reduce transaction costs and be adapted to the realities on the ground. We will ensure that the Commission’s proposal does not go any further than this, for example by attempting to impose one single approach to joint programming.
25. Whilst the UK can support the evolution from ‘B envelopes’ to a central unallocated reserve, we want to ensure Member State oversight over the disbursement, as well as the right to agree clear criteria for eligibility for these funds.
26. Otherwise, the UK is largely content with the sections on implementation and decision-making procedures (Titles III and IV) which strike a reasonable balance between ensuring effective Member State control of spending and the need for flexibility. As in EDF10, the EDF’s flexibility to allow funds to be deployed for shocks and crises is maintained through the use of special programmes and measures as well as the unallocated reserves mentioned above. However, any derogation from the standard approval process for special programmes and measures should be aligned with the corresponding rules already agreed for the DCI and CIR.
27. This flexibility must also ensure that EDF funds are responsive to programme performance. The UK strongly supports the reallocation of funds to the areas where they will be most effective and the principles for the review process for national, regional and intra-ACP programmes set out in the the Cotonou Agreement. We also support the provisions outlined in Title V on monitoring, reporting and evaluation linked to results.We secured an agreement in the Internal Agreement to ring-fence 0.25% of total EDF11 support costs for reforms on results, monitoring and evaluation and will be careful to ensure that this increased commitment is enshrined in the Implementing Regulation. Monitoringreferences should be strengthenedwith regards tomore regular reporting of aggregated results at the output and outcome levels, based on key performance indicators for each sector of intervention. We will seek an annual report on EDF implementation, as we are doing in the CIR negotiations, linked to the Commission’s comprehensive results framework.
Impact Implications: (Impact to UK businesses or Civil Society)
28. This poses no impact to UK businesses or Civil Society.
Financial Implications:
29. There are no financial implications linked to this document.
Consultation: (please indicate any cross-HMG consultation)
30. No cross-HMG consultation
Timetable / Council
31. The Implementing Regulation will be negotiated by Member States in ACP Working Group from 6 September, with the aim of agreement by unanimity by the end of the year.
LYNNE FEATHERSTONE
PARLIAMENTARY UNDER-SECRETARY OF STATE
DEPARTMENT FOR INTERNATIONAL DEVELOPMENT
ANNEX ONE
SCRUTINY HISTORY
Doc / Title / Date10212-13
COM (2013) 306 final / Communication from the Commission to the Council on the provisional application of the Internal Agreement between the Representatives of the Governments of the Member States, meeting within the Council, on the financing of European Union aid under the multiannual financial framework for the period 2014 to 2020, in accordance with the ACP-EU Partnership Agreement, and on the allocation of the financial assistance for the Overseas Countries and Territories to which Part Four of the Treaty on the Functioning of the EU applies. / Submitted to the Committees on 13 June 2013
Cleared from House of Lords on 18 June 2013
Cleared from House of Commons on 19 June 2013
14661/06
COM(2006) 650 Final / Proposal for a Council Regulation on the Implementation of the 10th European Development Fund / Submitted to the Committees on 29 October 2012
Cleared in House of Lords on
6 November 2012
Cleared in House of Commons on 21 November 2012
7625-06
COM ( 2006) 132 Final / Proposal for a Council Decision on the position to be adopted by the Community within the ACP-EC Council of Ministers concerning the multiannual financial framework for the period 2008-2013 and the modifications to be inserted in the Agreement revising the Partnership Agreement between the members of the African, Caribbean and Pacific Group of States of the one part, and the European Community and its Member States, of the other part, signed in Cotonou on 23 June 2000 and revised in Luxembourg on 25 June 2005 / Submitted to the Committees on 7 April 2006.
Cleared from House of Commons on 19 April 2006
Cleared from House of Lords on 27 April 2006.