COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 05.09.1995 
COM(95) 408 final - SYN 500 
Re-examined proposal for a 
COUNCIL REGULATION (EC) 
on operations to promote tropical forests 
(presented by the Commission pursuant to Article 189 c (d) 
of the EC Treaty) 

EXPLANATORY MEMORANDUM 
The scale of the threat to the tropical forests and the need for concerted international 
action within an approach linking the environment and development have been stressed by 
all Community institutions and were confirmed at the recent Rio Conference. 
Against this background, action by the Community, complementing that of the Member 
States, will help achieve the objectives pursued and mobilize the requisite resources. 
This Regulation sets out the objectives and procedures for such action, which is aimed at 
helping preserve tropical forests and manage them sustainably. 
A 
Commission opinion on the amendments adopted by the European Parliament during the 
second reading with regard to the Council's common position with a view to adopting a 
Regulation on operations to promote tropical forests (00/0500(SYN) 
On 15 June 1955 Parliament adopted 29 amendments. 
1. The Commission incorporated the following amendments in its revised position: 
No 2 (geographical area or climate zone) 
No 3 (development aid and trade instruments) 
No 6 (substantial resources for significant protection of tropical forests) 
No 7 (compromise A: amount of financial reference) 
No 9 (five-year reviews) 
No 10 (definition of tropical forests) 
No 11 (indigenous peoples) 
No 13 (qualitative and quantitative conservation) 
No 15 (sustainable management) 
No 17 (participation of forest peoples) 
2 The Commission incorporated the following amendments, with certain minor 
changes to the wording: 
No 8 (setting-up of a permanent framework to encourage such activities and 
ensure consistency) 
No 18 (promotion of sustainable exploitation of tropical forests, mainly outside 
primary forests) 
No 22 (increased consultations rather than uniform position) 
No 29 (harmonized methods rather than criteria designed to ...) 
No 30 (funding guidelines) 
No 31 (evaluation) 
Parts of the following amendments were incorporated: 
No 20 (minus the reference to the consent of local people, which is already 
broadly covered by Amendment 17 incorporated into Article 4(1) 
providing for the participation of the forest peoples concerned) 
No 25 (compromise B: minus the rate of 60%, left out because absolutely all the 
operations funded must have the support of local people and the assistance 
of the local authorities) 
No 37 (minus the aspects relating to the introduction and implementation at 
Community level of a system for evaluating and monitoring certificates -
see 3 below) 
lbi o 
The Commission is unable to include Amendment 28 (evaluation reports) which is 
broadly covered by the provisions of Articles 12 and 14 or those concerning: 
trade issues, such as import restrictions or the introduction of a 
Community certification system (Amendments 1, 4, 5, 23) 
actions within the scope of the Commission's powers of initiative or 
organization (Amendments 23, 24, 27) 
subjects too general and broad to be implemented easily (Amendments 12, 
14, 19) 
-tc 
Re-examined proposal for a 
COUNCIL RROriT ATION ŒO 
on operations to promote tropical forests 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, and in particular 
Articles 130s and 130w thereof, 
Having regard to the proposal from the Commission,1 
Acting in accordance with the procedure of Article 189c of the Treaty,2 
Having regard to the opinion of the Economic and Social Committee, 
Whereas the Commission communication to the Council of 16 October 1989 on "The 
conservation of tropical forests: the role of the Community"3 sets out broad guidelines 
for Community action in this sphere; 
Whereas the resolution of the Council of Ministers for Development Cooperation of the 
29 May 1990 on "Tropical forests: development aspects" established a basis for the use 
of development instruments in tropical forest conservation; 
Whereas the European Parliament has expressed, in many parliamentary resolutions, 
concern over the destruction of tropical forests and the consequences for forest peoples; 
Whereas the Dublin European Council of June 1990 called for a programme of action 
to be drawn up to counteract the threat to tropical forests; 
Whereas the Community and its Member States adopted the Rio Forest Principles, the 
Agenda 21 action programme and the Conventions on Biological Diversity and Climate 
Change; 
Whereas the Community's operations to promote tropical forests form part of its 
objectives on the conservation of forests, in whatever geographical area or climate zone 
they may be situated; 
1 OJ NoC 78, 19.3.1993, p.8; OJ No C 201, 13.7.1994, p. 15 
: Opinions of the European Parliament of 29 October 1993 (OJ No C 315, 
22.12.1993, p.644) and 15 June 1995 (OJ No . ., ... ). 
3 OJ No C 264, 16.10.1994. 
Whereas the Community intends to expand its actions to promote the conservation of 
tropical forests in all appropriate ways, within the context, inter alia, of its 
environment policy and of its new development cooperation policy, laid down in 
Articles 130u to 130y of the Treaty, and using the relevant instruments of development 
assistance and trade; 
Whereas, by virtue of their special knowledge, the forest peoples play a key role in 
managing the environment, in particular with regard to the conservation of tropical 
forests; 
Whereas the ecological and socio-economic conditions of tropical forests vary 
according to regions and countries; 
Whereas a Community action, complementing Member States' actions, will facilitate a 
better realization of the objectives pursued; 
Whereas existing financial instruments available to the Community for supporting the 
conservation and sustainable development of forests could usefully be complemented; 
Whereas a substantial commitment of resources is required to have a significant impact 
on the protection of tropical forests; 
Whereas provision should be made for funding the actions referred to in this 
Regulation; 
Whereas an amount of ECU 250 million is proposed as a financial reference, 
illustrating the will of the legislative authority, for the implementation of the actions 
covered by this Regulation for an initial five-year period (1995 to 1999), in so far as 
this financial reference is consistent with the Financial Perspective ceilings in heading 
4; 
Whereas it is therefore necessary to set up a properly thought-out permanent 
framework in order to encourage these actions and to guarantee a cohesive policy; 
Whereas the Council and the European Parliament will consider, every five years, the 
mechanisms for funding of operations to promote tropical forests, taking account of the 
provisions of the ACP-EEC Convention in force and the framework regulation 
concerning cooperation with developing countries in Asia and Latin America; 
Whereas rules for implementation, and in particular the form of action, the recipients 
of the aid, and decision procedures should be laid down, 
HAS ADOPTED THIS REGULATION: 
Article 1 
The Community shall support actions to promote the conservation and the sustainable 
management of tropical forests and the associated biological diversity in accordance 
with the criteria and procedures provided for in this Regulation. 
Article 2 
For the purposes of this Regulation: 
1. "Tropical forests" shall be defined as those natural and semi-natural tropical or 
subtropical forest ecosystems, whether in an undisturbed (primary) or a disturbed 
(secondary) state, which are characterized by a predominance of trees, in both dry 
and humid areas. The areas concerned are those found within the tropics and 
subtropics delimited by the 30th northern and southern parallels. 
2. "Conservation" shall be considered to include all actions to preserve and 
rehabilitate tropical forests, and specifically those actions which are designed to 
protect or restore the biological diversity, including ecological functions, of the 
forest ecosystem in question and at the same time secure as far as possible its 
current and future utility value for mankind and in particular for forest peoples. 
3. "Sustainable forest management" is understood as the stewardship and use of 
forests and forest lands in a way, and at a rate, that maintains their biodiversity, 
productivity, regeneration capacity, vitality and their potential to fulfil, now and in 
the future, relevant ecological, economic and social functions, at local, national, 
and global levels, without causing any damage to other ecosystems. 
4. "Sustainable development" shall be considered as the improvement of the quality 
of life and welfare of the relevant populations within the limits of the capacity of 
the ecosystems by maintaining natural assets and their biological diversity lor the 
benefit of present and future generations. 
5. "Forest peoples" shall be defined as indigenous peoples who inhabit the forest or 
claim it as their home and any people who live in or near the forest and have 
traditionally been directly and to a large extent dependent on the forest. 
o Article 3 
Pursuant to this Regulation, the Community shall provide financial support or 
technical expertise for actions which support and encourage the efforts o( 
developing countries and their regional organizations to conserve and sustainably 
manage their tropical forests, in the context of the sustainable development of 
those countries and regions. 
The recipients of aid and partners in cooperation may include not only states, 
regions and overseas countries and territories, but decentralized authorities, regional 
organizations, public agencies, local or traditional communities, private industries 
and operators, including cooperatives and non-governmental organizations and 
representative associations of forest peoples, which include the conservation of 
tropical forests among their stated objectives or regular activities. 
Special consideration shall be given to actions in support of the conservation of 
forests, as regards both quality and quantity, which are considered to be of 
importance for local effects such as the protection of watersheds and biotopes, the 
prevention of soil erosion and the restoration of degraded areas, and for global 
effects, such as climate change and loss of biological diversity. 
Article 4 
The priority given to specific actions will be determined according to the needs of 
each country as reflected in regional and national development and environment 
policies relating to forests and according to Community cooperation priorities. 
Particular consideration, however, shall be given to actions that promote the 
following: 
(a) conservation of primary tropical forests and their biodiversity and 
regeneration of tropical forests which have been damaged, supported by 
analysis of the underlying causes of deforestation and taking into account 
differences between countries and regions and measures to address them; 
(b) sustainable management of forests designated for the production of timber 
and other products, but excluding commercial logging operations in primary 
tropical forests, except those which are community-based, on a small scale, 
sustainable, environmentally sound and implementing sustainable forest 
management; 
(c) the definition and development of certification systems, combined with 
independent assessment systems, for timber produced from tropical forests 
according to sustainable forest management principles as part of 
internationally harmonized certification systems envisaged for all kinds of 
timber and forest products; 
(d) provision of prior information to forest peoples, followed by their 
participation in and support for the identification, planning and 
implementation of actions; 
(e) capacity-building to address the needs for training schemes for local 
populations, forest managers and researchers, for legislation, for increased 
political and social support and institutional strengthening and for 
organizations and associations active in forest conservation 
(0 a strategic and adaptive research policy aimed at supplying the knowledge 
required for the conservation and sustainable management of forests and also 
for the implementation of research monitoring activities in the framework of 
projects and programmes; 
(g) development of buffer zones to assist the conservation or regeneration of 
tropical forests, as part of a broader land utilization plan; 
(h) development and implementation of forest management plans aimed at 
conserving tropical forests and promoting sustainable exploitation of timber 
and other forest products, mainly outside primary forests. 
2. The Community shall require actions carried out pursuant to this Regulation to be 
preceded by reports on their ecological, social, economic and cultural impact, with 
specific qualitative or quantitative objectives. Where applicable, these actions shall 
be evaluated with the participation of local people. 
The above shall also apply to evaluations of the actions carried out, for which 
purposes specific indicators shall be given in the reference conditions for the action 
which is to be supported. The indicators shall be both quantitative and qualitative. 
3. The Community shall, in respect of the various Community policy areas which 
have a potential direct impact on the conservation of tropical forests, develop and 
apply the instruments required to prevent the policy pursued or planned from 
having a negative impact and, where possible, to contribute to the conservation of 
tropical forests. 
4. Actions carried out pursuant to this Regulation shall be coordinated with, and may 
provide support for, national and international programmes and actions concerned 
with conservation and sustainable management of tropical forests, such as the 
Tropical Forest Action Plan and the International Tropical Timber Organisation, 
provided these programmes and actions are in accordance with the principles and 
objectives laid down in this Regulation. 
5. Wherever possible, operations shall be carried out within the framework of 
regional organizations and international programmes of cooperation in the context 
of increased consultations with a view to contributing to the formulation, at 
international level, of a global policy on the conservation of forests. 
Article 5 
Cofinancing with Member States, or with multilateral, regional or other organizations 
shall be sought through greater coordination. As far as possible, the Community nature 
of the aid shall be maintained. 
Article 6 
Community funding shall be in the form of non-reimbursable grants. 
Article 7 
1. Community funding of the actions- referred to in Article 3 shall cover an initial 
five-year period (1995 to 1999). The financial reference, illustrating the will of 
the legislative authority, for Community funding for the implementation of these 
actions during this period shall be ECU 250 million. 
2. The budget authority shall determine the appropriations available for each 
financial year, account being taken of the principles of sound financial 
management referred to in Article 2 of the Financial Regulation applicable to the 
general budget of the European Communities. 
Article 8 
1. Financial and technical assistance may cover all foreign currency costs and local 
costs for carrying out projects and programmes, including, whenever necessary, 
integrated programmes and sectoral projects. 
2. Maintenance and operating expenses for economic cooperation operations, training 
and research programmes and development projects and programmes may, in 
particular, be covered. However, except for training and research programmes, 
such expenses may be covered as a general rule only at the launching stage and in 
gradually decreasing amounts. 
3. Systematic efforts shall be made to seek contributions, particularly in financial 
form, from partners (countries, local communities, undertakings, individual 
recipients) as far as their means permit and according to the nature of each 
operation. 
4. The payment of taxes, duties and charges shall be excluded from Community 
financing. 
Study costs and the short- and long-term use of experts to assist the recipients and 
the Commission in devising general policies, identifying and preparing operations 
and monitoring and evaluating them shall normally be covered by Community 
funds, either as part of the financing for individual operations or separately. 
Article 9 
1. Participation in invitations to tender and purchasing and other contracts shall be 
open on equal terms to all natural or legal persons of the Member States. 
2. With regard to financial and technical assistance, the participation referred to in 
paragraph 1 shall usually be extended to the recipient state, and may also be 
extended, case-by-case, to other developing countries. 
3. In exceptional cases which are duly justified, other countries of origin may be 
allowed for specific components. 
Article 10 
Projects and programmes for which Community funding exceeds ECU 2 million in the 
case of an ACP State and ECU 1 million in the case of an Asian or Latin American 
country, as well as any substantial modifications which exceed 20% of the amount 
initially agreed, shall be adopted according to the procedure laid down in Article 11(2). 
Article 11 
1. The Commission shall administer tropical forest cooperation activities. 
2. The Commission shall be assisted, as appropriate, by the Committee set up 
pursuant to Article 15 of Council Regulation (EEC) No 443/92 of 25 February 
1992 on financial and technical assistance to, and economic cooperation with, the 
developing countries in Asia and Latin America4 or by the Committee set up 
pursuant to Article 21 of the Internal Agreement on the financing and 
administration of Community aid under the Fourth ACP-EEC Convention.'' 
3. The representative of the Commission shall submit to the Committee a draft of the 
measures to be taken. The Committee shall deliver its opinion on the draft, within 
a time limit which the chairman may lay down according to the urgency of the 
matter. The opinion shall be delivered by the majority laid down in Article 148(2) 
of the Treaty in the case of decisions which the Council is required to adopt on a 
4 OJ No L 52, 27.7.1992, p.l. 
5 OJ No L 229, 17.8.1991, p.288. 
proposal from the Commission. The votes of the representatives of the Member 
States within the Committee shall be weighted in the manner set out in that Article. 
The chairman shall not vote. 
The Commission shall adopt the measures envisaged if they are in accordance with 
the opinion of the Committee. 
If the measures envisaged are not in accordance with the opinion of the 
Committee, or if no opinion is delivered, the Commission shall, without delay, 
submit to the Council a proposal relating to the measures to be taken. The Council 
shall act by a qualified majority. 
If, on the expiry of a period of one month, the Council has not acted, the proposed 
measures shall be adopted by the Commission. 
Article 12 
The Commission shall submit to the European Parliament and the Council an annual 
report with an assessment of the implementation of this Regulation. The report shall set 
out the results of implementation of the budget as regards commitments and payments 
and presenting the projects and programmes financed during the year. The report shall 
contain, as far as possible, information on the funds committed at national level during 
the same financial year. It shall also contain specific, detailed information 
(undertakings, nationality, etc.) on the contracts awarded for the implementation of the 
projects and programmes. 
Regular evaluation reports shall be submitted to the Committee mentioned in Article 
Article 13 
This Regulation shall be implemented under an approach coherent with the general 
principles laid down in Council Regulation (EEC) No 443/92 and in the current ACP-
EEC Convention and under common criteria at all stages of the project cycle from 
identification to evaluation, according to harmonized methods. 
Funding guidelines shall be published for organizations which intend to submit project 
proposals under this Regulation; the guidelines will specify the criteria for the 
selection and evaluation of projects. 
Article 14 
This Regulation shall enter into force on the day following its publication in the 
Official Journal of the European Communities. 
It shall apply until 31 December 1999. 
In 1997 the Commission will present to the Council and Parliament an overall 
evaluation of the actions funded by the Community in the field of tropical forests 
accompanied by a proposal extending or revising this Regulation. 
This Regulation shall be binding in its entirety and directly applicable in all Member 
States. 
Done at Brussels ... 
10 
FINANCIAL STATEMENT 
1 TITLE OF OPERATION 
Operations to promote tropical forests 
2 BUDGET HEADING INVOLVED 
B7-5041 
3 \A\Al\l; BASIS 
EC Treaty, Articles 130r and 130s (concerning the environment), and 
130u and 130w (concerning development). 
Council Regulation (EC) No .../95 of ... on operations to promote tropical 
forests (Commission proposal of 26 February 1993, OJ No C 78, 
19.3.1993, p.8 - and of 10 June 1994, OJ No C201, 23.7.1994, p.15. 
Common position adopted by the Council on 23 January 1995). 
Regulation scheduled for adoption by the Council in October 1995. 
4 DESCRIPTION OF OPERATION 
4.1 General objective 
Tropical forests play a crucial environmental role both globally (in terms 
of biodiversity, climatic change etc.) and locally (in terms of the 
prevention of soil erosion etc.). These functions are, however, 
increasingly under threat from over-exploitation of these forests owing 
to a multitude of factors (including demographic growth, need for 
farmland, logging and the extraction of other resources). 
At the Rio Conference of June 1992, all participants committed 
themselves to the conservation and sustainable management of forests. 
Through operations funded under this budget heading, the Community 
encourages the developing countries, and in particular local 
communities, in their sustainable development efforts. 
A4 
4.2 Period covered 
The Commission's revised proposal covers an initial period of five years 
(1995-99), in so far as this financial reference is consistent with the 
Financial Perspective ceilings in heading 4. 
5 CLASSIFICATION OF EXPENDITURE OR REVENUE 
5.1 Non-compulsory expenditure 
5.2 Differentiated appropriations 
6 TYPE OF EXPENDITURE OR REVENUE 
Grant 
Systematic efforts will be made to seek contributions, particularly in financial 
form, from the beneficiaries. Cofinancing will also be sought from the Member 
States or multilateral, regional or other organizations; for example, the largest 
tropical forest programme, which concerns the Brazilian forests, is a 
multilateral programme coordinated by the World Bank and financed by the 
Community and various other donors, among them Germany, the UK, France, 
Japan and the USA. 
In exceptional cases, the grant may cover the entire cost of an operation. 
Interest subsidy 
None. 
Should the operation prove an economic success, is there provision for all or 
part of the Community contribution to be reimbursed? 
No. 
7 FINANCIAL IMPACT 
7.1 Method of calculating total cost of operation (definition of unit 
costs) 
^12-
The volume of funding has been calculated on the basis of the needs 
identified and the principles of sound financial management, within the 
limits set by the budgetary authority; the cost of each project is 
calculated on a case-by-case basis following identification and appraisal. 
Personnel costs are calculated on the basis of unit prices; equipment, 
operating and travel costs are calculated according to real costs and paid 
on presentation of documentary proof. 
7.2 Itemised breakdown of cost 
Breakdown 
Projects 
Instruments 
TOTAL 1995 
38 
12 
50 1996 
40 
10 
50 1997 
42 
8 
50 1998 
42 
8 
50 1999 
42 
8 
50 TOTAL 
204 
46 
250 
7.3 Indicative schedule of appropriations 
Commitment 
appropriations 1995 
50 1996 
50 1997 
50 1998 
50 (FCU millions) 
1999 
50 TOTAL 
250 
Payment 
appropriations 
1995 
1996 
1997 
1998 
1999 and following 
financial year ^ 
TOTAL 30 
30 30 
30 50 
50 50 
50 90 
90 250 
8 FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN 
There will be regular audits by the Court of Auditors and Financial Control. 
Technical audits will be conducted by Commission officials assisted 
independent experts. by 
The verification of grants or the receipt of the services, preparatory, feasibility 
and evaluation studies ordered is performed by Commission officials before 
payment, taking account of the contractual obligations and the principles of 
value for money and sound financial or general management. Fraud 
prevention measures (auditing, reporting etc.) are written into agreements or 
contracts concluded between the Commission and recipients of payment. 
-H3 
9 ELEMENTS OF COST-EFFECTIVENESS ANALYSIS 
91 Specific and quantified objectives ; 
target population 
Specific objectives: relationship to the general objective 
The conservation and sustainable management of tropical forests 
involve measures to enhance operational capacities, training, 
research etc. Conducted in close liaison with the relevant national 
and local authorities, these operations take the form of practical 
projects and the development of instruments designed to promote 
conservation and sustainable management (e.g. certification of 
tropical timber). 
The priorities are: 
- sustainable methods of forest management; 
- design and application of timber certification systems; 
- actively involving the local population; 
- capacity building (training, legislation, institutions etc.); 
- application of research results; 
- the introduction of buffer zones and management plans. 
Target population 
The operations directly target communities living in and around 
forests. The direct beneficiaries include not only central and 
regional government but local authorities, regional organizations, 
government agencies, local or traditional communities and 
NGOs. 
9.2 (.rounds for the operation 
Need for Community financial aid 
Supplementing measures by the Member States, Community 
financial aid will help counter the threat to the tropical forests by 
supporting aid operations in support of efforts by the developing 
countries. 
Choice of ways and means 
(a) This Regulation is a vital component of the strategy on 
tropical forests (which also includes the development of trade 
incentives, investment promotion and technology transfers). 
Ai\ 
(b) The operations are consistent with the ALA developing 
countries' development programmes and the provisions of the 
Lomé Convention. 
(c) Apart from specific measures concerning tropical forests, the 
aid operations in question are intended to act as a catalyst, in 
particular through the development of pilot and demonstration 
projects. 
Main factors of uncertainty which could affect the specific results 
of the operation 
The chief factor is the late recognition of the need to conserve 
tropical forests and the developing countries' lack of operational 
resources. 
<).3 Monitoring and evaluation of the operation iV 
Performance indicators selected 
The principal indicators used concern: 
- the surface area of the tropical forests concerned 
- the establishment of conservation areas 
- the drafting and implementation of management plans and 
operational capacities 
- grassroots participation 
- consistency with local, national and international measures. 
Details and frequency of planned evaluations 
Operations are monitored by the Commission in close liaison with 
the external delegations by means of: 
- regular reports; 
- field visits; 
- mid-term evaluations in the case of some pilot projects; 
- ex-post evaluation reports on representative projects. 
Assessment of the results obtained 
The proposed Regulation provides for the Commission to submit 
an annual report on its implementation. The Commission has 
also undertaken to provide the Council, by the end of this year, 
with a report on the operations financed under heading B7-5041 
in the period 1992-95 and, by the end of 1997, with an evaluation 
of all operating concerning tropical forests. 
AC 
10 ADMINISTRATIVE EXPENDITURE 
The administrative resources needed will be allocated by the Commission in its 
annual decision on the allocation of resources, taking particular account of the 
increases in staffing and funding approved by the budgetary authority. 
10.1 Impact on staffing 
The requisite officials will be drawn from the current staff of 
Directorates-General I and VIII. 
Types of job 
Officials or 
temporary 
staff A 
B 
C 
Other resources 
Total Staff assigned to the 
operation's administration 
Permanent 
2 
2 Temporary 
1 
1 Of whom 
From 
existing 
resources 
of DG or 
service 
concerned 
3 
3 From 
recourse to 
additional 
resources Duration 
5 years 
10.2 Overall financial impact of increase in staffing 
Not applicable 
10.3 Increase in other operating costs as a result 
of the operation 
The costs for the initial five-year period total ECU 215 200 and 
will be covered from current resources. This sum consists of 
ECU 180 000 in mission expenses under Article A/130 
(ECU 12 000 a year per A official/temporary agent) and 
ECU 32 500 in meeting expenses under Article A/250 (2 
meetings of 4 experts per year at a cost of ECU 880 per expert 
per meeting). 
AG 

ISSN 0254-1475 
COM(95) 408 final 
DOCUMENTS 
EN 14 11 
Catalogue number : CB-CO-95-447-EN-C 
ISBN 92-77-92870-0 
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