[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 25.10.2007

COM(2007) 643 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

Towards an EU response to situations of fragility - engaging in difficult environments for sustainable development, stability and peace - {SEC(2007) 1417}

TABLE OF CONTENTS

1. List of Acronyms 3

2. Introduction 4

3. Background 4

4. Towards an EU response to situations of fragility 5

4.1. Identifying fragility: triggers and features 5

4.2. Engagement in situations of fragility: challenges 5

4.3. Preventing fragility: dialogue and analysis to identify and tackle triggers of fragility 6

4.4. Addressing fragility: strategies and priorities 7

4.5. Post-crisis: Linking Relief, Rehabilitation and Development (LRRD) 8

4.6. Security and fragility 8

4.7. Democratic governance and human rights in situations of fragility 8

5. Improving instruments 10

5.1. Financial instruments and procedures 10

5.1.1. European Development Fund (EDF) 10

5.1.2. Development Cooperation Instrument (DCI) and European Neighbourhood and Partnership Instrument (ENPI) 10

5.1.3. Instrument for Stability 11

5.1.4. Humanitarian aid 11

5.1.5. European Instrument for Democracy and Human Rights (EIDHR) and Thematic Programme "Non State Actors and Local Authorities in Development" 11

5.2. Budget support 11

6. The way forward: priorities and deliverables 12

LIST OF ACRONYMS

ACP: Africa, Caribbean and the Pacific

AfDB: African Development Bank

CFCSP: Common Framework for Country Strategy Papers

CFSP: Common Foreign and Security Policy

CSP: Country Strategy Paper

DCI: Development Cooperation Instrument

DDR: Disarmament, Demobilisation, Reintegration

ENP: European Neighbourhood Policy

ENPI: European Neighbourhood and Partnership Instrument

EDF: European Development Fund

ESDP: European Security and Defence Policy

IMF: International Monetary Fund

LRRD: Linking Relief, Rehabilitation and Development

NIP: National Indicative Programme

OECD/DAC: Organisation for Economic Co-operation and Development / Development Assistance Committee

SSR: Security Sector Reform

UN: United Nations

WB: World Bank

INTRODUCTION

Fragile situations constitute a particular challenge as an obstacle to sustainable development, equitable growth and peace, creating regional instability, security risks at global level, uncontrolled migration flows, etc. The EU must be able to put the large variety of instruments, both at Member States and Community level, at work within an agreed and coordinated response strategy covering such situations. This Communication aims to provide the basis for such an EU response strategy to be developed together with the Council and EU Member States.

The existing EU policy framework and instruments, the ongoing international debate and EU comparative advantages and experience form the basis of this Communication. A technical Annex draws conclusions from engagement in situations of fragility. In addition, the Commission Services and the Council Secretariat have developed a Joint paper to launch a debate on "Security and Development" where issues of relevance to this Communication are more specifically addressed.

This Communication integrates the outcome of an open debate with key civil society organisations and an informal meeting of EU Ministers of Development in September 2007. It is being forwarded to the other EU institutions with a view to launching a discussion aimed at consolidating a comprehensive EU strategy for addressing fragility and therefore contributing to creating conditions for sustainable development, stability, peace and democratic governance.

BACKGROUND

The international community is increasingly concerned about the consequences of fragility, which exacerbate the challenge of reaching the Millennium Development Goals, harm people’s wellbeing and freedoms and may involve global security risks. The UN, donors and regional and continental organisations prioritise integrated approaches for engaging in fragile situations. The Paris Declaration on Aid Effectiveness recalls that principles of harmonisation, alignment and management-for-results must be adapted to environments of weak governance and capacity. The OECD/DAC endorsed a "Policy Commitment and a set of Principles for Good International Engagement in Fragile States and Situations", emphasising "Whole-of-government approaches", which require close cooperation between economic, development, diplomatic and security actors.

The Community and EU Member States together constitute the world’s largest development assistance and humanitarian aid donor. The EU has become an important political and security actor. It has special responsibilities in addressing challenges posed by fragile situations, but also comparative advantages such as the worldwide network of Commission Delegations.

A policy framework already exists for addressing the different dimensions of fragility. The European Consensus on Development provides guidance on a comprehensive response to fragility. It is part of a broader external action framework which needs to be comprehensively activated, for the Union to address fragility in a timely and coherent fashion. This includes, the European Security Strategy, the EU Programme for Prevention of Violent Conflict, the European Neighbourhood Policy, the Linking Relief, Rehabilitation and Development strategic framework, the Consensus on Humanitarian Aid and the EU approach to governance and development. The enlargement process contains instruments that can be useful in this context. EU commitments on Policy Coherence for Development and the EU Code of Conduct on Complementarity and Division of Labour are part of this framework.

TOWARDS AN EU RESPONSE TO SITUATIONS OF FRAGILITY

Identifying fragility: triggers and features

Fragility refers to weak or failing structures and to situations where the social contract is broken due to the State’s incapacity or unwillingness to deal with its basic functions, meet its obligations and responsibilities regarding service delivery, management of resources, rule of law, equitable access to power, security and safety of the populace and protection and promotion of citizens' rights and freedoms.

Public institutions, political processes and social mechanisms that lack effectiveness, inclusiveness or legitimacy drive fragility: conditions are not met for achieving a minimum of institutional and financial development, launching long-term strategies and gradually raising governance standards. In this context, fragility is rooted in high levels of poverty or in inequitable distribution of wealth.

In most extreme cases, states can collapse or withdraw from parts of the territory, which can lead to permanent insecurity, chronic violent conflict and humanitarian crises. A range of trans-national security and instability threats may also result from these situations, which may undermine EU strategic objectives and interests.

Fragility features in many low and middle income countries with structurally weak economies, which are unstable and vulnerable to crises, external shocks, epidemics, drug trafficking, natural disasters and environmental degradation, as well as endangered cultural assets and diversity. It can also be a side effect of either globalisation in marginalised areas of the world economy, or over dependence on the import of conventional energy sources, which can hamper stabilisation and development. Climate change is expected to exacerbate fragile situations by introducing new and multiple impacts in low capacity contexts. Further work on these links will contribute to develop innovative responses or to adapt existing approaches.

From a human security perspective, poor and vulnerable populations are the most affected in situations of fragility, which may push human capital to leave, through voluntary or forced migration that may aggravate fragility.

Engagement in situations of fragility: challenges

Dealing effectively with fragility requires taking deliberately calculated risks that have to be weighed against risks inherent to non-action. Supporting partner countries' efforts to prevent fragility, to address its root causes and to tackle its consequences is integrated in EU partnerships. Even when the application of cooperation agreements is partially suspended, the EU remains engaged through a mix of Community instruments and EU action, for reasons of solidarity, security and aid effectiveness.

Avoiding engagement in situations where there are no significant political barriers, may lead to situations of "aid orphans" and leave an entire country, a region or a sector without access to financial resources. On the other hand, the international focus on a given crisis may involve massive and uncoordinated financial flows leading to overlaps and lack of effectiveness.

The ongoing efforts towards complementarity through the EU Code of Conduct will help addressing the "aid orphans" issue. In order for EU Member States to effectively channel additional funds to "orphan fragile states", concrete options should be discussed.

As part of humanitarian aid, the Community addresses this issue through its Forgotten Crisis Assessment methodology, which facilitates provision of support to victims of crises that receive little or no media or donors attention.

Comprehensive and coordinated engagement in fragile situations through "Whole of Government" approaches is necessary. Open communication of data and other information, synergies and good articulation must be ensured between institutional, state and non-state actors (humanitarian, development, diplomacy, law enforcement, security), the multilateral and other donors involved. Important progress has been accomplished but key constraints are still to be removed.

Further coordination is needed within the EU. Joint training, planning and assessments involving staff from the Commission, the Council Secretariat and Member States should take place more systematically, not only in situations of crisis and post-conflict, but also when a joint analysis shows a deteriorating situation that may aggravate fragility.

Desk-to-desk contacts on fragility related geographical and thematic issues should be further promoted by the Commission, the Council Secretariat or EU Member States, as well as mutual information and coordination between EU Heads of Mission in a given country or region. The UN, other multilateral partners, donors, civil society organisations and institutions other than central governments (parliaments, local and decentralised authorities, regional and continental organisations) should also be involved as appropriate in this coordination process. Preventing and addressing fragility features in the EU/Africa Joint Strategy. Dialogue on this issue will continue with China and other non-OECD partners with a significant presence in countries concerned.

Preventing fragility: dialogue and analysis to identify and tackle triggers of fragility

Donors, partner countries, regions and organisations, international institutions, civil society and governments have developed early warning, analytical, monitoring and assessment tools relevant for situations of fragility. Very often, these tools need to be supplemented by the appropriate instruments allowing for timely implementation of the outcome of the analysis.

Political dialogue with partner countries, regions and continental organisations is central in all Partnership and Cooperation Agreements concluded by the EU. Addressing the sources and consequences of fragility in this dialogue may contribute to building country owned strategies leading to a durable exit from fragility.

The potential of Country Strategy Papers (CSPs) to prevent fragility needs to be enhanced: root causes of conflict, expressions of violence, insecurity and risk of vulnerability must be more systematically addressed through development programmes and ensuring that conflict sensitive approaches are applied. In the same vein, crisis management and risk reduction and preparedness activities must be linked to development considerations and to the CSPs as the overall EU reference.

Addressing fragility: strategies and priorities

In situations of fragility, a country, a region or a particular community, is exposed to excessive strains and threats. Each case requires a differentiated, articulated and holistic response, articulating diplomatic action, humanitarian aid, development cooperation and security.

CSPs, jointly prepared with partner governments, are the preferred framework to address fragility. In order to provide a better overview of the EU response, they should also refer to interventions under both CFSP and the Instrument for Stability. CSPs can ensure EU coordination in fragile situations, particularly through "joint programming", which enhances predictability and facilitates synergies to fit partners' needs and priorities. Engagement through Community instruments can have an added value because, in certain circumstances, it can be seen to be more neutral than bilateral cooperation.

In situations that have deteriorated so much that long-term development cooperation is no longer possible or desirable, the EU tends to apply a mix of political and diplomatic action, in combination with a certain level of development cooperation and crisis management tools. Humanitarian aid can be provided in but is not triggered by a situation of fragility as such, unless there is a slide into crisis with humanitarian implications. As the expression of EU solidarity with victims of man made and natural disasters, it is neutral, impartial and independent: it does not imply political engagement and cannot be considered as a crisis management tool.

Regarding crisis management, the Union has strengthened its ability to act more quickly and flexibly in relation to crises and situations of fragility. Political dialogue and political measures such as sanctions are also part of the EU tool box in situations of fragility. Engagement in situations of fragility should be open to a wide range of players, such as UN agencies, the Red Cross Movement or in-country actors. Parliaments, decentralised authorities and civil society have great potential for driving change, which can be maximised by facilitating their access to funding.

The initial response strategies should address the immediate needs of the population, even if strategic responses need to focus on the long term. For this, it is crucial to understand how fragility affects the different groups in a society, in particular women and vulnerable groups such as children, youth, disabled and minorities, in order to address their needs effectively.

These groups can also act as "drivers of change". Women, in particular, must not be considered only as passive victims; even if especially in situations of conflict they are particularly vulnerable to sexual crimes and exploitation. Women and minorities have an important role in promoting sustainable peace and fostering security, but they usually do not have access to mechanisms, power and resources, and face discriminatory legal frameworks. Transition periods offer windows of opportunity to address gender issues and minorities' rights, through constitutional or legal reviews, reform of the judiciary, and involvement in setting priorities in the reconstruction agenda.

Post-crisis: Linking Relief, Rehabilitation and Development (LRRD)

Consistency in the overall response, the presence of adequate, experienced and well coordinated human resources and sustained funding are of fundamental importance. Relief, crisis management, reconstruction assistance and long-term development cooperation must be properly linked as part of an integrated approach built on the principle of sustainable development. In this context, the Community has tried to implement the LRRD strategic framework since the late nineties. This is a long and complex process which involves many different actors and financial instruments.

The main focus of the LRRD approach has been to build long term strategies on sectors and actors that are key from the traditional relief perspective, with a view to ensuring continuity and facilitating synergies. However, governance, institutional development and security have to be better integrated in the strategic framework. Moreover, funding mechanisms such as trust funds managed by international agencies, often used in this context, are not always able to support the implementation of reconstruction and rehabilitation programmes as rapidly as expected, and although they could in principle help ensuring donor coordination and coherence, they should not be used as a substitute for local ownership and EU's own presence.

Efforts are still needed to both update the methods of implementation of the LRRD strategic framework, with due integration of governance and security concerns, as well as to adapt procedures and financial mechanisms to situations where flexibility is crucial. The purpose remains to try and achieve better harmonisation of analyses and policies, integration of strategies (including coordination, coherence, complementarity), and synergy of activities over a period of time, covering both humanitarian and development approaches to the situation.

Security and fragility

Linking peace, security and development, within a country and across borders, is often a primary concern in fragile situations. Development cooperation makes an essential contribution to promote peace and stability by addressing expressions of violence and root causes of insecurity and violent conflict.

The EU has enhanced conflict prevention and crisis management capacities. It is able to act more quickly and flexibly in relation to crises and situations of fragility. A combined use of Community instruments, including the specific Peace Facility for Africa and the Instrument for Stability, and CFSP/ESDP tools, facilitates strengthening national, regional and continental approaches to fragility.

A broad, developmental approach to security, that integrates human security concerns in governance related programmes such as SSR and DDR can ensure that the focus is placed on the security of individuals and their basic needs and rights. An integrated "Whole of Government" approach to SSR forms the basis for state building strategies and political legitimacy in post-conflict settings.

Democratic governance and human rights in situations of fragility

Fragility is most often triggered by governance shortcomings and failures, in form of lack of political legitimacy compounded by very limited institutional capacities linked to poverty. Supporting democratic governance, state building, reconciliation processes and human rights protection, as well as promoting political will for reform through dialogue and incentives, rather than through conditionality and sanction, should guide EU action.

Ownership over reforms by all components of the society, including the most vulnerable, is crucial also in fragile situations. As a result of the programming dialogue, ACP countries have access to additional funding, according to the relevance, ambition and credibility of their governance action plans, which are assessed taken into consideration situations of post-crisis and fragility. This approach could be enlarged to other regions and used by EU Member States in their bilateral cooperation. The Community has also developed the Governance Facility in the ENP context.

Human rights promotion is not always ensured in fragile situations, where they are often violated. In addition to direct support to civil society organisations, to human rights defenders and to national institutions such as Human Rights Commissions or Ombudsman, and engagement with Parliaments and decentralised authorities, dialogue is critical to identify and address constraints.

Promoting democratization requires prioritising needs. Elections are necessary but not sufficient for moving towards democratic development. An upstream work to promote an inclusive political society and functioning multiparty systems, with a focus on institutional development is needed as well as downstream work to promote effective functioning of newly elected institutions. Moreover focusing exclusively on electoral process may be counterproductive if it leads to an early donors' disengagement.

In the most extreme cases, the central government is not committed to democratic governance. Engaging with other actors, such as civil society, local authorities or parliaments is necessary. In complement, dialogue on less controversial issues, such as service delivery or employment generation, should continue with central governments, to progressively build political will for reform. Restoring basic service delivery and job creation are priorities in fragile situations, where there is often tension between objectives of building institutional capacities and ensuring access to services, and substitution cannot be avoided.

Sustainable peace requires a legitimate and effective justice sector, which is particularly weak in situations of fragility. In post-conflict settings, a nationally-owned transitional justice and rule of law system, engaging official and non-governmental institutions is fundamental. Parallel advancement of justice and reconciliation initiatives has contributed to stabilizing divided societies after a conflict. At the same time, the EU and partner countries should jointly ensure that the most serious crimes of concern to the international community should not go unpunished and are prosecuted

Environmental degradation and access to or control over natural resources play a central role in some conflicts, with implications for peace making and post conflict reconstruction. Positive or negative impact of natural resource abundance in particular depends on capacities and development orientation of those who manage resources. While donors often have limited financial and political leverage over these issues, response strategies must be sensitive to them lest they trigger renewed conflict. The role of private sector actors can also prove crucial. The EU will continue promoting cooperation in the context of international initiatives against the illicit trade of natural resources and promoting their transparent and equitable management.

Availability of key statistical information is often essential to addressing issues of governance, the democratic process, basic service delivery and access to natural resources. An effective statistical system is indispensable for poverty reduction, sustainable development and equitable growth.

IMPROVING INSTRUMENTS

Financial instruments and procedures

Dealing effectively with fragility involves taking risks and requires rapidity and flexibility in adopting political decisions and making them operational in the field, while dealing simultaneously with partner countries’ constraints, often in terms of limited capacities. In this context, more flexible and accelerated procedures are also needed, in order to establish quicker mechanisms that guarantee transparency and accountability, and contribute to a management-by-results oriented approach.

The EU must improve the use of its wide range of instruments in order to put policies in practice, enable a comprehensive response to situations of fragility and fill the "implementing gap". Substantial efforts are still necessary to better link and articulate all possibilities offered by the range of Community instruments (geographic, stability, humanitarian, thematic), by the CFSP/ESDP mechanisms, but also by EU Member States' bilateral aid and other donors’ instruments.

This Communication does not require new sources of funding to be mobilised in addition to the existing Financial Framework 2007-2013. It aims, however, at fostering a better synergy between the already existing financial instruments, and at establishing an appropriate and balanced share of financing with the EDF when applicable.

European Development Fund (EDF)

The Cotonou Agreement provisions on humanitarian and emergency assistance foresee "flexible mechanisms" for post-emergency action and transition to the development phase. They have been successfully applied in a number of cases. The Commission is currently working on a set of more flexible implementation procedures to be applied in situation of fragility. The new provisions on the use of country allocations for unforeseen needs offer additional opportunities for further flexibility. Furthermore, the ACP disaster facility (under approval) aims to reduce the vulnerability of disaster prone countries, in conformity with the "Hyogo framework for action 2005-2015".

Development Cooperation Instrument (DCI) and European Neighbourhood and Partnership Instrument (ENPI)

"Post-crisis situations and fragile States" are explicitly mentioned among the geographic programmes for implementing Community assistance in the DCI. In circumstances such as crises, post-conflict or threats to democracy, the rule of law, human rights or fundamental freedoms, a special emergency procedure foresees the review of geographic strategy papers and multi-annual indicative programmes to make the transition to long term cooperation and development.[. In addition, special measures not foreseen in these strategies and programmes can be implemented in case of natural disasters, civil strife or crises, when neither the Instrument for Stability nor Humanitarian aid can intervene. The ENPI includes similar provisions.

Instrument for Stability

The short-term component of the Instrument for Stability enables the Commissionto provide strategic support in relation to potential or real crisis situations and kick-start assistance that will then be followed up with long-term support under other community instruments. It can be used in response to situations of crisis or emerging crisis, initial post-crisis political stabilization, and early recovery from natural disasters, complementing or spearheading support under the mainstream Community external instruments. The long-term component deals with trans-regional threat including non-proliferation and organised crime.

Humanitarian aid

Humanitarian aid aims at saving lives and providing immediate relief for victims of crises, regardless of the level of fragility and the causes of the crisis. Existing procedures to mobilise humanitarian aid are adapted to this approach.

European Instrument for Democracy and Human Rights (EIDHR) and Thematic Programme "Non State Actors and Local Authorities in Development"

In the most difficult situations, donors shift from direct engagement with governments to support other actors that can drive change. Procedures established under the thematic programme "Non-State Actors and Local Authorities in Development" and the EIDHR are well adapted to situations of fragility, which support alternative actors in situations that are not favourable to participatory development or to respect for human rights. Support to human rights defenders and to the relevant international framework are also foreseen.

The EIDHR is very relevant to fragile situations, due to a special focus on situations where there is a serious lack of fundamental freedoms and human security, where civil society and human rights defenders in particular are under most pressure, and where political pluralism is reduced. The EIDHR will aim at assisting democratic political participation and representation, and contribute to the peaceful conciliation of group interests. Transnational and regional support will focus on dialogue and practical cooperation activities aimed at addressing the sources of deep-seated conflict or potential violent conflict. One of the specificities of the EIDHR is that can fund activities without partner country governments' approval. This can be an additional advantage in certain fragile situations. However, the EIDHR can only act in complementarity with the applicable geographic programmes.

Budget support

In complement to projects and depending on the sources of fragility, budget support may also be used to address urgent financial needs, consolidate key State functions (public finance management) and maintain social stability (payment of salaries or imports financing). It can also effectively influence the political dialogue on SSR, DDR or civil service reform when these have an impact on macroeconomic stability.

The Commission has used budget support in the case of several post-conflict countries, to support the recovery process. Political, developmental, fiduciary or reputational risks are high in all fragile situations, but they need to be compared with the expected benefits and with the cost of new crises. Budget support is tailored to manage such risks (by targeting critical expenditures, audited arrears etc.) and based on a continuous assessment of the macroeconomic situation, public financial management reforms and development strategy outcomes.

THE WAY FORWARD: PRIORITIES AND DELIVERABLES

Where partner countries are making efforts to address causes and consequences of fragility, the EU needs to ensure that the Community, EU institutions and Member States are more responsive, quicker and more flexible in their support to partner countries’ efforts to address fragility. The Commission proposes to stimulate a debate involving civil society and other stakeholders as well as to undertake the actions below to launch the preparation of an EU response strategy to situations of fragility:

- The EU should formally endorse the OECD DAC Principles on Good International Engagement in Fragile States and Situations and commit to implement them in all situations of fragility.

- Issues concerning fragility will more systematically be included in the regular political dialogue with partner countries that are showing signs of fragility.

- Regular exchanges of risk analyses and relevant EU responses at the field level through EU Heads of Mission meetings and at headquarters through desk-to-desk dialogues between institutions and member states and across Council groups should take place in order to ensure whole-of-government approaches.

- EU support to countries facing situations of fragility should consistently promote gender equality, human rights, including a children's rights perspective, and social inclusion.

- The Commission will facilitate the establishment of ad hoc Country and Thematic Teams, involving the Council Secretariat and Member States to address specific situation of fragility, with a view to:

- further develop conceptual and analytical approaches to fragility and conflict, including SSR and the expansion of the LRRD strategic framework towards integrated responses to post-crisis and methods of implementation of governance and security concerns;

- reinforce EU comparative advantages in situations of fragility, including in the perspective of the future external service of the EU;

- advance towards more coherent and coordinated action at country level, in particular by making use of all possibilities for single joint analysis and joint programming as provided in the Common Framework for Country Strategy Papers (CFCSP), to be reviewed according to the evolution of the situation.

- A mapping of bilateral and EU aid modalities under the different pillars will be carried in order to determine their ability to respond adequately to situations of fragility and to assess their impact and the way they interact on the ground. .Particular attention will be devoted to the complementarity between crisis management related instruments such as CFSP/ESDP joint actions, the Instrument for Stability, the African Peace Facility and long term cooperation instruments.

- The Commission will take stock of EU assistance efforts to alleviate and prevent security threats, will make proposals to improve the effectiveness and coherence of EU external assistance in situations of insecurity and will propose ways to complement the actions at national and regional levels with a specific framework of responses to challenges of global or trans-regional nature.

- In line with the EU Code of Conduct on Complementarity and Division of Labour, the EU, after identifying substantial overlaps or gaps at country level, will allocate existing and additional funds in a complementary way. Complementarity should be aimed at both in-country or across countries, by deciding who engages in which country. The Commission suggests to explore the following options for EU Member States to channel extra funding to fragile states taking in particular into account the orphan ones:

- increasing country allocations, when a strategic bilateral cooperation framework exists;

- topping up CSPs signed by the Commission and partner countries and disbursed within the framework of the NIPs managed by the Commission, when a bilateral cooperation framework does not exist or when pooling financial resources have greater impact

- A comprehensive review of assessment and analytical tools on governance, conflict and disaster monitoring will be carried out.

- Fragility will be integrated in the review process on the Governance Initiative for ACP countries, which will involve regular expert-level cooperation and a report by the Commission in 2008.

- The Commission will improve its capacity to deliver budget support, keeping into account its specific risks and expected benefits in fragile situations. Coordination with the WB, the IMF and the AfDB will be reinforced.

- The Commission will prepare guidelines clarifying the conditions to apply provisions that allow the use of flexible procedures under geographic long term instruments.

- The EU will seek to further strengthen the partnership with the UN and other multilateral actors in dealing with situations of fragility. The further consolidation of the Peacebuilding Commission, and the continued active EU support to a UN reform that aims at equipping the UN to effectively address situations of fragility are in this respect of fundamental importance.