COMMISSION OF THE EUROPEAN COMMUNITIES
Brussels, 14.07.1999
COM (1999) 335 final
99/0070 (COD)
Amended proposalfor a
EUROPEAN PARLIAMENT AND COUNCIL REGULATION (EC)
on development cooperation with South Africa
(presented bytheCommissionpursuant to Article250 (2)oftheEC-Treaty)
2EXPLANATORY MEMORANDUM
The proposed Regulation lays down the objectives and procedures for operations
under Budget line B7-3200.
The initial version of this proposal was presented by the Commission on 12 March
1999.
On the basis of a report by Mr Raimondo Fassa, Parliament (in its first reading)
approvedthe Commissionproposalon5 May1999, subject to 6amendments.
The Commission has communicated to the Parliament its position on the proposed
amendments, one of which can be accepted in full, two in part, and three of which the
Commissioncannot accept.
The Commission therefore has to draw up an amended proposal incorporating those
amendments that it does accept (see underlined text) which are designed to ensure a
greatercoordinationand sustainabilityofprogrammes undertaken.
The amendments which the Commission was unable to accept concerned certain
committee procedures - rejected because clarity and consistency require that
uniformity be maintained in matters of comitology; systematic coordination in the
beneficiary country with the EIB - impractical as the EIB has no permanent
representation;and the formalisation oftransmission ofevaluations and reports to the
SouthAfricanNationalAssembly, whichwould create a strange precedent.
The Commission’s initial proposal has been discussed by the Council’s Africa
Working Party, but no commonposition has yet beenagreed.
3Amended proposalfor a
EUROPEAN PARLIAMENT AND COUNCIL REGULATION (EC)
on development cooperation with South Africa
THE EUROPEAN PARLIAMENT AND COUNCIL OFTHE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article179thereof,
Having regard tothe proposalfromthe Commission1,
Acting inaccordance withthe procedure laid down in Article 251,
(1) Whereas, since the elections of April 1994 and the establishment of a
democratic government, the Community has turned towards a strategy of
support for the policies and reforms undertaken by the South African
authorities;
(2) Whereas the Council has adopted the Council Regulation (EC) N° 2259/96 of
22 November 1996 ondevelopment cooperationwithSouthAfrica2;
(3) Whereas this above-mentioned Regulationshallexpire on31 December 1999;
(4) Whereas the Agreement on Trade, Development and Co-operation between
the European Community and the Republic of South Africa stipulates in its
Chapter VII that financial assistance in the form of grants shall be covered by
a special financial facility established under the Community budget, that the
Communitydeclares its willingness to maintain its financial co-operation with
South Africa at a substantial level, and that it will take the necessary decisions
in this respect on the basis ofa proposalby the Commission;
(5) Whereas other appropriate instruments could be made available after this
Agreement has entered into force, in particular in the framework of the future
EC/ACP Co-operation Agreement and the eligibility of South Africa to the
EuropeanDevelopment Fund ,
(6) Whereasthe above-mentioned Agreement contains in its Chapter V provisions
on aims, priorities, methods and implementation of Development Cooperation
withSouthAfrica;
1COM (1999) 124 final, 12.3.1999.
2OJ L306, 28.11.1996.
4(7) Whereas in the light of the implementation of the Council Regulation (EC)
N°2259/96 of22 November 1996 above-mentioned, and ofthe SpecialReport
n° 7/98 of the Court of Auditors in respect of the European Community
Development Aid Programme regarding South Africa (1986-1996), the
Council Regulation (EC) N° 2259/96 of22 November 1996 has to be adapted,
inparticular as concerns simplificationofprocedures, greater focus on sectoral
priorities and decentralised decision-making;
(8) Whereas assistance provided under this Regulation shall be implemented in
coherencewithactionsofotherdonors, includingmultilateralinstitutions,
(9) Whereas Council Decision 87/373/EEC of 13 July 19873lays down the
procedures for the exercise of implementing powers conferred on the
Commission and the operation of the Committee that shall assist the
Commission;
(10) Whereas the operation of this Committee should follow the management
procedure or the advisory procedure where the management procedure is not
considered appropriate;
(11) Whereas CouncilRegulation(EC, Euratom) N°2988/95 of18 December 1995
on the protection of the Communities’ financial interests4establishes a
common legal framework for all the fields of the communities’ own resources
and expenditure;
(12) Whereas Council Regulation (EC, Euratom) N° 2185/96 concerning on-the-
spot checks and inspections carried out by the Commission in order to protect
the European Communities’ financial interests against fraud and other
irregularities5applies to all areas of the Communities’ activity without
prejudice to the provisions of the Community rules specific to the different
policy areas ,
HAVE ADOPTED THIS REGULATION:
Article 1
Aims
The Community shall implement financial and technical cooperation with South
Africa to support the policies and reforms carried out by that country's national
authorities ina context ofpolicydialogue and partnership.
The aim of the Community cooperation programme, entitled the “European
Programme for Reconstruction and Development in South Africa”, shall be to
contribute to South Africa's harmonious and sustainable economic and social
development and to its insertion into the world economy and to consolidate the
3OJ L197, 18.7.1987.
4OJ L312, 23.12.1995.
5OJ L292, 15.11.1996.
5foundations laid for a democratic society and a State governed by the rule of law in
which humanrights and fundamentalfreedoms are fullyrespected.
Within this context the Community shall give priority to supporting operations which
contributeto the fight against poverty.
Article 2
Areas ofcooperation
Development co-operation to be carried out under this Regulation will focus mainly
on:
- support to policies, instruments and programmes aiming at the progressive
integration of the South African economy into the world economy and trade,
for employment creation, development of private sector, regional cooperation
and integration. In this latter context, special attention will be given to
providing support to the adjustment efforts occasioned in the region by the
establishment of the free-trade area under the Trade, Development and
Cooperation Agreement, especiallyinthe SACU. Promotion of mutualgeneral
interest cooperation between European Union and South African businesses
m ayb ec on si d e r e da sw el l ;
-improvementoflivingconditionsanddeliveryofbasicsocialservices;
- support to democratisation, the protection of human rights, sound public
management, the strengthening of local governments and involvement of civil
societyinthe development process.
Dialogue and partnership between public authorities and non-governmental
development partners and actors willbe promoted.
Programmes shall focus on fight against poverty, take into account the needs of the
previously disadvantaged communities and reflect the gender and environmental
dimensionsofdevelopment .
Article 3
Eligibility ofcooperation partners
Cooperation partners eligible for financial assistance under this Regulation shall be
national, provincial and local authorities and public bodies, non-governmental
organisations and community-based organisations, regional and international
organisations, institutions and public or private operators. Any other body could be
eligible if so designated by both parties.
6Article 4
Means, nature ofexpenses, information on theprogramme and coordination
1. The means that maybe deployed under the cooperationoperations referred to
in Article 2 shall include in particular studies, technical assistance, training
or other services, supplies and works, and also evaluation and monitoring
audits and missions.
2. Community financing in local or foreign currency, depending on the needs
and natureofthe operation, maycover:
– government budget expenditures to support reforms and policy
implementation in the priority sectors identified through a policy
dialogue, under the formofdirect sectoralbudget support;
– investment and equipment;
–in certain cases, and in particular where a programme is implemented
by a non-government partner, taking into account the fact that the
programme has to aim as much as possible at long term sustainability,
recurrent expenditure (including administrative, maintenance and
operatingcosts).
Part ofthe financing may be channelled, in a targeted manner (e.g. emerging
entrepreneurs), in the form of risk capital or interest rate subsidies to
European Investment Bank loans.
3. A financial contribution from the partners referred to in Article 3 shall in
principle be required for each co-operation operation. That contribution will
be requested in accordance with the possibilities of the partners concerned
and depending onthe natureofeachoperation. It shall particularly be sought
in cases where a project is designed as a start-up for an open-ended activity,
in order to ensure the sustainability of such projects after Community
funding has ceased .I tm a yb ei nk i n d .In specific cases where the partner is
either a non-governmental organisation or a community-based organisation,
th ec on t r i b u ti onm ayn otb er e q ui r e d .
4. The Commission may take any appropriate step to ensure that the
Communitycharacterofaid provided under this Regulation is made known.
5. Opportunities may be sought for potential cofinancing with other donors,
particularlytheMemberStates.
6. In order to achieve the objectives of coherence and complementarity referred
to in the Treatyand with the aim of guaranteeing optimal effectiveness of the
aid, the Commission maytake all necessaryco-ordinationmeasures, notably:
a) the establishment of a system for the systematic exchange of information
on actions financed or planned to be financed by the Community and the
Member States, and theEIB ;
7b) on-the-spot co-ordination of these actions by means of regular meetings
and exchange of information between the representatives of the
Commissionand the Member States inthe beneficiarycountry.
7. The Commission, in liaison with the Member States, may take any steps
necessaryto ensure adequate co-ordinationwithother donors concerned.
Article 5
Formoffinancialsupport
Financialsupport underthis Regulationshalltakethe formofgrants.
Article 6
Programming
1. Triennial indicative programming based on specific objectives shall be
carried out in the context of close contacts with the South African
Government and taking account of the results of the co-ordination referred to
in Article 4 (6) and (7). The indicative programming process will fully
respect the principle of recipient led programming. Such a programming
should result in aid being focused each year in a limited number of sectors
identified amongst those areas referred to in Article 2. Provision is made
where appropriate so that certain initiatives could be continued over longer
time periods.
2. In order to prepare for each programming exercise, in the context of
increased co-ordination with the Member States, including on the spot, the
Commission shall draw up a recapitulative document on co-operation
s t r a t e g y( S t r a t e g yP a p e r )t ob ee x a m i n e db yt h eC o m m i t t e er e f e r r e dt oi n
Article 8 hereafter referred to as the Committee. This Strategy Paper shall
take into account the results of the most recent overall evaluation of
operations financed under Regulation 2259/96 and under this Regulation, of
other regular evaluations of operations. This document will be discussed at
the request of the Commission or one or more Committee members. In that
case, where it is not possible to reach a desirable consensus on the Strategy
Paper, the Committee shall give its opinion in accordance with the procedure
referred to in Article 8.
3. TheCommissionshallforward a triennialIndicative Programme to be signed
by the Commission and the South African Government, drawn up on the
basis of that examination, to the Committee for information. An exchange of
views shall take place once a year, on the basis of a presentation by the
Commission’s representative of the general guidelines for the operations to
be carried out inthe year ahead.
8Article 7
Procedures
1. The Commission shall be responsible for appraising, taking decisions on and
managing operations conducted under this Regulation, in accordance with
the budgetary and other procedures in force, notably those laid down in the
Financial Regulation applicable to the general budget of the European
Communities.
2. In the specific case of contribution of the EPRD to regional programmes in
the SADC area financed from the EDF, this contribution may be utilised
following Lomé Convention modalities, provided that the provisions of the
Financial Regulation applicable to the general budget of the European
Communities are respected.
3. In orderto ensure transparency and achievement of the objectives referred to
inArticle4(6),theCommissionshallforwardproject profiles to the Member
States and their localrepresentatives as soon as the decision to appraise them
has been taken. The Commission shall subsequently update the project
profiles and forward themto the Member States.
4. All financing agreements or contracts concluded under this Regulation shall
provide for on-the-spot checks bythe Commission and the Court of Auditors
in accordance with the usual arrangements established by the Commission
pursuant to the rules in force, in particular those laid down in the Financial
Regulationapplicable tothe generalbudget ofthe EuropeanCommunities.
In addition, the Commission may carry out on-the-spot checks and
inspections inconformitywithRegulation n°2185/96.
The measures taken by the Commission in accordance with the procedure set
outinArticle8shallprovide for adequate protectionofthe financial interests
ofthe EuropeanCommunityin conformitywithRegulationn°2988/95.
5. Where operations give rise to financing agreements between the Community
and South Africa, such agreements shall stipulate that taxes, duties and
charges shall not be borne by the Community.
6. Participation in invitations to tender and contracts shall be open on equal
terms to allnaturaland legalpersons inthe Member States,SouthAfrica and
the other ACP States. Participation may be extended to include third
countries in duly substantiated cases and in order to ensure the best cost-
effectiveness ratio.
7. Supplies shall originate in the Member States of the European Community,
South Africa or the other ACP States. In duly substantiated exceptional
cases, theymayoriginate inother countries.
98. Except as otherwise in the present Regulation, contracts shall be signed by
the South African Government. In addition, if a contract is not covered by a
financing agreement, contracts shallbe concluded bythe Commission.
In application of Article 111 of the Financial Regulation applicable to the
general budget of the European Communities, payments will be made
through a local Paying Agent which will be established by agreement
between the South African authorities and the Commission, and by whom
bank accounts in local currency and EURO will be opened. The Paying
Agent must keep a fullaccount ofoperations on these accounts and submit to
thecontrolsoftheCommissionandtheCourtofAuditors .
In application of Article 109 of the Financial Regulation applicable to the
general budget ofthe EuropeanCommunities, a National Authorising Officer
may be appointed.
Article 8
Comitology
1. The Commission shall be assisted by a Committee, composed of the
representatives of the Member States and chaired by the representative of the
Commission.
2. The Commission representative 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 proposal from the Commission. The votes
of the representatives of the Member States within the Committee shall be
weighted inthe manner setout inthat Article. Thechairmanshallnotvote.
The Commission shall adopt measures which shall apply immediately.
However, if these measures are not in accordance with the opinion of the
Committee, they shall be communicated by the Commission to the Council
forthwith. In that event, the Commission may defer application of the
measures which it had decided for a period ofnot morethanone month from
the dateofsuchcommunication.
The Council, acting by a qualified majority, may take a different decision
withinthe time limit referred to inthe previous paragraph.
3. By way of derogation to paragraph 2. above, for financing decisions
concerning anyoperationat a cost ofover EURO 5million and below EURO
25 million, or any adjustment of such an operation involving an increase of
more than 20 % in the amount initially agreed, and proposals arising for
substantive amendments in the execution of a project for which a
commitment has already been made, the Committee shall deliver its opinion
onthe draft within a time limit which the Chairman may lay down according
10to the urgency of the matter, if necessary by taking a vote. The opinion shall
be recorded in the minutes; in addition, each Member State shall have the
right to askto have its positionrecordedinthe minutes.
The Commission shall take the utmost account of the opinion delivered by
the Committee. It shall inform the Committee of the manner in which its
opinionhas beentaken into account.
4. The Commission shall inform the Committee succinctly of financing
decisions it intends totake concerning projects and programmes ofa value of
under EURO 5 million. Such information shall be given at least one week
before the decision is taken.
5. Where the increase referred to in paragraph 3. above is more than EURO 5
million but less than 20 % of the original commitment, the Committee's
opinionshallbe sought bysimplified and accelerated procedures.
6. In case of programmes approved by the Committee and financed through
tranches relating to more than one financial year, the Commission will take
yearly subsequent financing decisions, not exceeding the determined
maximum expenditure for the approved programme and in the limit of
financial resources made available by the budgetary authority, without
furthercommunicationtotheCommittee.
Article 9
Monitoring and evaluation
After each financial year the Commission shall submit an annual report on
implementation of this Regulation to the European Parliament and the Council. The
report shall set out the budget turnout with regard to commitments and payments and
the projects and programmes financed in the course of the year. It shall contain
statistics oncontracts awarded for implementing projects and programmes.
Inadditionthe Commissionshallmonitor progress against each operations’ objectives
in terms ofoutputs and outcomes, using objectively verifiable indicators.
The Commission shall regularly evaluate operations financed by the Community to
determine whether those operations' objectives have been reached and to establish
guidelines for improving the effectiveness of future operations. Summaries of
evaluationreports shall be forwardedto the Member States. Full reports shall be made
availabletoMember Stateswhichrequestthem.
By 31 October 2003 and eighteen months prior to the expiry of this Regulation, the
Commission shall submit to the European Parliament and the Council an overall
evaluation of the operations financed by the Community forming the triennial
programme 2000-2002 under this Regulation, accompanied if necessary by proposals
for amendments to it and in the latter case by suggestions for the future of the
Regulation.
11Article 10
Annualappropriations
The annual appropriations shall be authorised by the budgetary authority within the
limits ofthe financialperspective.
Each year the budgetary description will fix a ceiling within the annual appropriation
for Technical Assistance contracts to be concluded by the Commission for the
carrying out of joint operations for the mutual benefit of the European Communities
and ofthe beneficiary .
Article 11
Duration
This Regulationshallenter into force onthe third day following that of its publication
in theOfficialJournal of the European Communities and shallexpire on 31 December
2006.
This Regulation shall be binding in its entirety and directly applicable in all Member
States.
Done at Brussels,
For the European Parliament For the Council
The President The President