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I Information

Court of Auditors

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SPECIAL REPORT No 9/2004

on Forestry Measures within Rural Development Policy, together with the Commission's replies

(pursuant to the second subparagraph of Article 248(4) of the EC Treaty)

(2005/C 67/01)

CONTENTS

ANNEX I — Community forestry related actions in the period 1964 to 1999

ANNEX II — Forest definition in the Member States

The Commission's replies

GLOSSARY OF TERMS

Afforestation of agricultural land: where new forests and woodland are created from agricultural land (this afforestation policy was originally dealt with under 1992 common agricultural policy (CAP) reform as part of a set of policies to take farmland out of food production).

CAP: common agricultural policy.

Crown cover density: proportion of area covered by the vertical projection of tree crown.

DG: Directorate-General.

EAGGF: European Agricultural Guidance and Guarantee Fund.

Forest action: afforestation and other forestry measures.

Forest area: the United Nations Food and Agriculture Organisation final report on global forest resources assessment (FRA), issued in 1995, defined a forest as: an area with 20 % crown cover density for industrialised countries and 10 % for developing countries.

Forestry measures: measures (i) to improve the multifunctional role of forests and woodland and to protect against, or assist in re-establishing forests after natural disasters (fire, flood, high winds etc.); (ii) to maintain and improve the ecological stability of forests where the protective and ecological role of these forests is of public interest, and (iii) to afforest non-agricultural land.

Forestry plans: national or subnational forest programmes (or equivalent instruments) are the basis for forestry support in the EU (1). They provide a framework for applying sustainable forest management. They are tools for planning, implementing and monitoring forestry and forest-related activities and provide an environment for the concerted and coordinated implementation of programmes and activities by all interested parties on the basis of mutually agreed objectives and strategies (2).

Forestry structures measures: measures which address the development of forests and forestry, the protection of forests against atmospheric pollution and fires and forestry research.

OP: operational Programme.

Star Committee: Commission Committee on Agricultural Structures and Rural Development.

Sustainable forestry: a widely used definition is: ‘development which meets the need of the present without compromising the ability of future generations to meet their own needs’. Sustainable forest management thus means finding the right balance between economic, environmental and social aspects for current and future generations.

Wooded land/woodland area: the UN/FAO final report on Global Forest Resources Assessment, issued in 1995, defined for developed countries as land which has some forestry characteristics but is not forest. It includes woody elements more than 50 cm and less than 7 m in height, covering more than about 20 % of the area.

SUMMARY

INTRODUCTION

Forests in the EU: key data

EU forestry support and the EU forestry strategy

EU financial support to forests

The audit of the Court

THE EU STRATEGY AND ITS IMPLEMENTATION

Legal framework

Sustainability and how to implement it

Member States define ‘forest’ differently

The shared management for implementing the forest strategy is not clear

NATIONAL FOREST PROGRAMMES (NFP) OR EQUIVALENT INSTRUMENTS

Commission information on forestry action at Member State level is still incomplete

LARGE UPTAKE OF FUNDS FROM PREVIOUS PROGRAMMING PERIOD

A COMPLEX SYSTEM

Creating difficulties for managing authorities and beneficiaries

IMPLEMENTATION OF FORESTRY MEASURES

Afforestation of agricultural land

Extension of woodland compatible with the environment

Administrative implementation (Unclear project selection criteria)

Uncertain verification of previous land use

Calculation of compensation for loss of income

Unverifiable criteria for designation as a farmer

Weak on-the-spot checks by the national authority

Other forestry measures

Eligibility of public land

Large uptake of funds for restoring damage caused by natural disasters

Compliance with tendering procedures

IMPACT OF AFFORESTATION OF AGRICULTURAL LAND MEASURE

Afforestation of agricultural land is very expensive due mainly to the compensation for loss of income over a 20-year period (Economy)

Degree of afforestation is not very significant (Effectiveness)

Result could be better achieved (Efficiency)

It has a very dispersed impact

IMPACT OF OTHER FORESTRY MEASURES

CONCLUSION AND RECOMMENDATIONS

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 14 October 2004.

For the Court of Auditors

Juan Manuel FABRA VALLÉS

President

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(1)  Article 29 of Council Regulation (EC) No 1257/1999 (OJ L 160, 26.6.1999, p. 80).

(2)  COM(1998) 649, 3.11.1998.

(3)  Council Resolution of 15 December 1998 (OJ C 56, 26.2.1999, p. 1). The Council Resolution states that the responsibility for forestry policy lies with the Member States and that Community actions are based on the principle of subsidiarity: ‘emphasises the principle of subsidiarity, given the fact that the Treaty establishing the European Community makes no provisions for a specific common forestry policy and that responsibility for forestry policy lies with the Member States, nevertheless taking into account that, pursuant to the principle of subsidiarity and the concept of shared responsibility, the Community can contribute positively to the implementation of sustainable forest management and the multifunctional role of forests.’

(4)  1993 pan-European Ministerial Conference in Helsinki.

(5)Source: Commission.

(6)  COM(1998) 649.

(7)  Council Resolution of 15 December 1998.

(8)  Council Resolution of 15 December 1998. The Council Resolution states that the responsibility for forestry policy lies with the Members States and that Community actions are based on the principle of subsidiarity: emphasises the principle of subsidiarity, given the fact that the Treaty establishing the European Community makes no provisions for a specific common forestry policy and that responsibility for forestry policy lies with the Member States, nevertheless taking into account that, pursuant to the principle of subsidiarity and the concept of shared responsibility, the Community can contribute positively to the implementation of sustainable forest management and the multifunctional role of forests.

(9)  1993 pan-European Ministerial Conference in Helsinki.

(10)Source: Commission.

(11)  Regulation (EC) No 1257/1999 which sets out the framework regulation for rural development support.

(12)  See glossary.

(13)  See glossary.

(14)  Objective 1 of the Structural Funds is aimed at promoting the development and structural adjustments of regions whose development is lagging behind.

(15)  Special Report No 14/2000 (OJ C 353, 8.12.2000, p. 1).

(16)  The audit scope did not cover other forestry financing by the EU budget like Forestry Research, Forest Natura 2000, Forest Focus.

(17)  The Commission (COM(1998) 649) indicates the relevance of forestry by the following:

(18)  The FAO final report on Global Forest Resources Assessment (FRA) issued in 1995 set a forest definition at 20 per cent crown cover density for industrialised countries and 10 % for developing countries.

(19)  Study on European Forestry Information and Communication System (EFICS) 1997.

(20)  Reference UN/FAO Report ‘Forest Resources’ year 2000, p. 34.

(21)  The Commission Communication was prepared on the basis of a specific request of the European Parliament (A4-0414/96, OJ C 55, 24.2.1997, p. 22).

(22)  Article 274 of the EC Treaty: ‘The Commission shall implement the budget, in accordance with the provisions of the regulations made pursuant to Article 279, on its own responsibility and within the limits of the appropriations, having regard to the principles of sound financial management. Member States shall cooperate with the Commission to ensure that the appropriations are used in accordance with the principles of sound financial management.’

(23)  According to Article 29 of Regulation (EC) No 1257/1999, support shall be based ‘on national or subnational forest programmes or equivalent instruments which should take into account the commitments made in the Ministerial Conferences on the protection of forests in Europe’.

(24)  Article 29 of Regulation (EC) No 1257/1999.

(25)Source: ‘National forest programmes in European countries: an initial overview based on a quick survey in countries participating in the COST E-19 Action’ page 11.

(26)  Fourth Ministerial Conference on the Protection of Forests in Europe (Vienna, April 2003).

(27)  Article 29(4) of Regulation (EC) No 1257/1999.

(28)  Regulation (EC) No 1257/1999 and Council Regulation (EC) No 1260/1999 (OJ L 161, 26.6.1999, p. 1).

(29)  69 operational programmes for Objective 1 regions plus the programme complements, 20 Objective 2 Single Programming Documents including EAGGF Guarantee measures, 68 RDPs EAGGF Guarantee and Leader +73 programmes.

(30)  Main DGs being, DG AGRI/DG REGIO/DG ENV.

(31)  Opinion of the Economic and Social Committee on ‘The situation and problems of forestry in the European Union and potential for developing forestry policies’ (OJ C 206, 7.7.1997, p. 128).

(32)  EAGGF Guarantee: the Commission Regulation (EC) No 817/2004 (OJ L 153, 30.4.2004, p. 30) on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) sets out in Article 69 that on-the-spot checks shall cover at least 5 % of beneficiaries each year and all the different types of rural development measures set out in the programming documents. On-the-spot checks shall be spread over the year on the basis of an analysis of the risks presented by each rural development measure. Checks shall cover all the commitments and obligations of a beneficiary which can be checked at the time of the visit. They shall be made in accordance with Title III of Regulation (EC) No 2419/2001.

EAGGF Guidance: Commission Regulation (EC) No 438/2001 (OJ L 63, 3.3.2001, p. 21) (on Structural Funds Management) sets out (Article 10) that ‘Member States shall organise checks on operations on an appropriate sampling basis, designed in particular to: (a) verify the effectiveness of the management and control systems in place; (b) verify selectively, on the basis of risk analysis, expenditure declarations made at the various levels concerned. The checks carried out before the winding-up of each assistance shall cover at least 5 % of the total eligible expenditure and be based on a representative sample of the operations approved, taking account of the requirements of paragraph 3. Member States shall seek to spread the implementation of the checks evenly over the period concerned. They shall ensure an appropriate separation of tasks as between such checks and implementation or payment procedures concerning operations’.

(33)  The European conference on rural development held in Salzburg in November 2003 expressed in its conclusions concern as to ‘the complexity of the current delivery system for EU rural development policy, with different funding sources and procedures according to whether an intervention is implemented within or outside Objective 1 regions’.

(34)  Council Regulation (EEC) No 3508/92 of 27 November 1992 establishing an Integrated Administration and Control System (IACS) for certain Community aid schemes (OJ L 355, 5.12.1992, p. 1).

(35)  Guideline document VI/10535/99 rev.7 issued by the Commission’s services for the implementation of the management, checks and penalties concerning rural development measures under Regulation (EC) No 1257/1999, point 3(5).

(36)  In particular, having just one single call for applications instead of recurrent ones encourages a first in approval of projects.

(37)  See also Guideline document VI/10535/99 rev.7, point 3(7).

(38)  Regulation (EEC) No 3508/92.

(39)  Special Report No 14/2000 ‘Greening the Cap’ paragraph 47 ‘In respect of agri-environmental measures, Member States must provide detailed evidence to support proposed program aid rates; these specific rates are then approved by the Commission. By contrast, in respect of afforestation measures, such information is not demanded of national authorities; the Commission approves aid rate maxima, within which Member States are free to set aid rates, without need for Commission approval.’

(40)  Article 31 of Regulation (EC) No 1257/1999 states that an annual premium per hectare may be paid ‘to cover loss of income resulting from afforestation for a maximum period of 20 years for farmers or associations thereof who worked the land before its afforestation or for any other private law person’.

(41)  Report to Parliament and the Council on the application of Regulation (EEC) No 2080/92 (COM(1997) 630 of 28.11.1997).

(42)  Commission Regulation (EC) No 445/2002, Article 61 (OJ L 74, 15.3.2002, p. 1).

(43)  Article 29 of Regulation (EC) No 1257/1999, as amended by Council Regulation (EC) No 1783/2003 (OJ L 270, 21.10.2003, p. 70).

(44)  Regulation (EC) No 1783/2003.

(45)  The rural development plans set out the amount per hectare to be paid as loss of income compensation for the following 20 years. The compensation for loss of income varies depending on the previous use of the afforested land, being higher in the case of the more remunerative uses and if the beneficiary qualifies as a farmer.

(46)  The Conference concluded on the opportunity of ‘refocusing of afforestation measures to strengthen multi-functionality and sustainability (e.g. risk management, improve environmental benefits and reduce fire risks)’.

(47)  Opinion of the Economic and Social Committee on ‘The situation and problems of forestry in the European Union and potential for developing forestry policies’.

(48)  Article 31 of Regulation (EC) No 1257/1999.

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ANNEX I

COMMUNITY FORESTRY RELATED ACTIONS IN THE PERIOD 1964 TO 1999

1964 to 1988:

Until 1988, the European Community took certain measures to develop the forestry sector, which were always directly linked to the common agricultural policy, in particular the policy on improving agricultural structures. The measures concerned harmonisation of legislation, the development of forests and forestry, the protection of forests against atmospheric pollution and fires and forestry research.

1988 to 1992:

The Community adopted a more coherent approach to its forestry projects. In September 1988 the Commission presented to the Council a Community forestry action programme. This was adopted by the Council in 1989 and focused on five main areas:

1992 to 1999:

In 1992 Community measures in the forestry sector entered a more ambitious phase. Decisions in two main areas fundamentally modified the 1988 action programme:

Since 1992, other Community measures in the forestry sector have included the European Forestry Information and Communication System (EFICS) (3) and forestry research co-financed under the EU's research and development programmes in the field of agricultural and environmental research.

During the 1990s, the European forestry debate focused mainly on defining and implementing the principles of sustainable forestry. The concept of sustainable forest management was defined in 1993 by the pan-European ministerial conference in Helsinki on the protection of forests. Sustainable forest management consists of a balanced combination of ecological, economic, social and cultural activities. The debate on the EU forestry strategy was initiated by, amongst others, the report from the European Parliament (4), the Communication from the Commission on a forestry strategy for the European Union (5) and the Council Resolution on a forestry strategy for the European Union (6). The debate reaffirmed, in particular, the principles that forests have a multifunctional role that the rules of the market economy should apply to them and that, in accordance with subsidiarity, the strategy should be implemented at the lowest possible level. Although the subsidiarity principle is to be applied and the forestry strategy seeks to improve coordination within the Community, concrete proposals on improving cooperation are lacking.

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(1)  Regulation (EEC) No 2157/92 and Regulation (EEC) No 2158/92 of 23 July 1992.

(2)  Regulation (EEC) No 2080/92 of 30 July 1992.

(3)  Regulation (EC) No 400/94.

(4)  A4-0414/96; PE 213.578/fin (the Thomas Report).

(5)  COM(1998) 649 final.

(6)  Council Resolution of 15 December 1998.

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ANNEX II

FOREST DEFINITION IN THE MEMBER STATES

Definition of forest: main criteria and threshold used by country according to the European Forestry Information and Communication System (EFICS)

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THE COMMISSION’S REPLIES

SUMMARY

INTRODUCTION

THE EU STRATEGY AND ITS IMPLEMENTATION

NATIONAL FOREST PROGRAMMES (NFP) OR EQUIVALENT INSTRUMENTS

LARGE UPTAKE OF FUNDS FROM PREVIOUS PROGRAMMING PERIOD

A COMPLEX SYSTEM

IMPLEMENTATION OF FORESTRY MEASURES

IMPACT OF AFFORESTATION OF AGRICULTURAL LAND MEASURE

IMPACT OF OTHER FORESTRY MEASURES

CONCLUSION AND RECOMMENDATIONS

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