Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL REGULATION on measures to promote the full integration of the environmental dimension in the development process of developing countries

(presented by the Commission)

EXPLANATORY MEMORANDUM

A. Principles

1. The proposed regulation lays down the objectives and procedures for activities under the current budget item B7-6200 "Environment in Development Cooperation".

The initial version of this proposal was presented by the Commission on 28 January 1999 (COM (1999) 36 final).

On the basis of a report by Ms Van Putten, the European Parliament (after its first reading) approved the Commission proposal on 5 May 1999, subject to 53 amendments.

In the light of these developments, the Commission has drawn up an amended proposal.

2. The Commission has made 3 types of amendments:

Firstly, in response to the first reading by the European Parliament a number of new provisions have been accepted.

Secondly, the modified proposal also takes into account discussions held at the Council.

Thirdly, the amended proposal includes certain changes pursuant to the entry into force of the Amsterdam Treaty.

B. Explanation

The Commission was able to accept 28 EP amendments in full or in part, in some cases subject to some rewording or insertion in a different part of the regulation text than initially proposed. Some amendments became redundant after other clarifications to the text were made.

The amendments or important parts of amendments that the Commission was unable to accept can be grouped under one or several of the following categories:

_ The provision of details, concerning themes and activities, which were already addressed in other parts of the regulation and/or which were considered to burden the structure and equilibrium of the regulation without adding to its completeness;

_ Other amendments that were considered already to be covered in the original version of the proposed regulation;

_ Quotes or provision of details relating to various applicable policy document and legal acts which were considered redundant for the purpose of the regulation;

_ Amendments relating to the interpretation of the scope of the regulation which were considered either too broad or too limiting;

_ Management issues which are of the competence of the Commission;

_ Amendments that were not in accordance with standard formulations and practices of similar regulations;

_ Amendments that were insufficiently clear, redundant, unworkable or too limiting.

Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL REGULATION on measures to promote the full integration of the environmental dimension in the development process of developing countries

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 175 and 179 thereof,

Having regard to the proposal from the Commission [1] ,

[1] COM(1999) 36 final

Having regard to the opinion of the Economic and Social Committee [2]

[2] REX/017 of 7.7.1999

Having regard to the opinion of the Committee of the Regions [3],

[3]

Acting in accordance with the procedure referred to in Article 251 of the Treaty4,

Whereas:

(1) Depletion of natural resources and environmental degradation have direct effects on economic development and especially on the livelihoods of local communities, including indigenous peoples, and thus counteract the alleviation of poverty through sustainable development;

(2) Current patterns of production and consumption have undeniable transboundary and global consequences, in particular where the atmosphere, the hydrosphere, soil condition and biological diversity are concerned;

(3) The Community and its Member States are signatories to the Rio Declaration and the Agenda 21 action programme and are committed to the United Nations General Assembly Special Session (UNGASS) Resolution "Programme for the further implementation of Agenda 21";

(4) The Community and its Member States are parties to Multilateral Environment Agreements, notably the Convention on Biological Diversity, the Framework Convention on Climate Change and the Convention to Combat Desertification; whereas they are thus committed to take into account the common but differentiated responsibilities of developed parties and developing parties on these subjects;

(5) The internal and external aspects of the European Community's environment policy need to be coherent in order to effectively respond to the challenges identified in the United Nations Conference on Environment and Development (UNCED) and its follow-up processes;

(6) The Community and its Member States are committed to the Organisation of Economic Cooperation and Development / Development Assistance Committee's (OECD/DAC) 'Shaping the 21st Century Strategy' which calls for the support for the implementation of national strategies for sustainable development in all countries by 2005, so as to ensure that current trends in the loss of environmental resources are effectively reversed at both global and national levels by 2015;

(7) The European Parliament and the Council have adopted Decision 2179/98/EC of 24 September 1998 [4] 5 on the review of the European Community Programme of policy and action in relation to the environment and sustainable development 'Towards Sustainability', which calls for a strengthened role for the Community in international cooperation in environment and sustainable development. The basic strategy of the Programme is to achieve full integration of environmental policy in other policies, including development policy;

[4] OJ L 275, 10.10.1998, p 5.

(8) The European Council held in Cardiff in June 1998 welcomed the Commission Communication "Partnership for Integration" [5] 6 setting out a strategy for integrating environment considerations into European Union policies and endorsed the principle that major policy proposals should be accompanied by the appraisal of their environmental impact;

[5] COM (98)333 final

(9) The Council and the Member States adopted on 15 July 1996 a resolution on Environmental Assessment in Development Cooperation;

(10) In its Resolution of 30 November 1998, the Council acknowledges the key role that indigenous peoples play in the conservation and sustainable use of natural resources;

(11) Sustainable development relies on the integration of the environmental dimension into the development process;

(12) Since resources are limited, the creation of suitable policies, strategies and tools and the implementation of experimental schemes are essential elements for such integration in economic and development cooperation;

(13) The financial instruments available to the Community for sustainable development in developing countries should be supplemented;

(14) Coordination of operations financed under Community instruments should be improved;

(15) Council Regulation (EC) No 722/97 of 22 April 1997 on environmental measures in developing countries in the context of sustainable development [6] set out the framework for Community assistance aimed at enabling developing countries to integrate the environmental dimension in their development process; whereas Regulation (EC) No 722/97 was applicable until 31 December 1999; whereas the experience acquired during the implementation of Regulation (EC) No 722/97 should be reflected in this Regulation;

[6] OJ N° L 108, 25.4.1997, p. 1

(16) Provision should be made for funding the activities referred to in this Regulation;

(17) Detailed rules for implementation should be laid down, in particular the form of action, the cooperation partners and the decision-making procedure;

(18) In accordance with Article 2 of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission [7], measures for the implementation of this Regulation should be adopted by use of the advisory procedure provided for in Article 3 of that Decision.

[7] OJ L 184, 17.7.1999, p. 23.

HAVE ADOPTED THIS REGULATION:

Article 1

1. The Community shall support developing countries in their efforts to integrate the environmental dimension into their development process.

To this effect, the Community shall provide financial assistance and appropriate expertise aimed at elaborating and promoting the implementation of policies, strategies, tools and technologies for the pursuit of sustainable development.

2. Community support shall be provided directly to developing country stakeholders as well as indirectly through the strengthening of the environmental dimension of the Community economic and development cooperation.

3. The assistance and expertise provided under this Regulation shall complement and reinforce that provided through other instruments of development cooperation.

Article 2

For the purposes of this Regulation, "sustainable development" means the improvement of the standard of living and welfare of the relevant populations within the limits of the capacity of the ecosystems by maintaining natural assets and their biological diversity for the benefit of present and future generations.

Article 3

1. The activities to be carried out under this Regulation shall address in particular*:

[*] Order of indents altered

_ global environmental issues, in particular those covered by multilateral environmental agreements, such as climate change, desertification and biological diversity;

_ transboundary environmental issues, in particular air, soil and water pollution;

_ environmental impacts related to the integration of developing countries into the world economy;

_ environmental impacts of macro-economic and sectoral policies in developing countries;

_ sustainable patterns of production and consumption;

_ sustainable management and use of natural and environmental resources in all productive sectors such as agriculture, fisheries and industry ;

_ environmental problems caused by the non-sustainable use of resources due to poverty;

_ sustainable production and use of energy;

_ sustainable production and use of chemical products, in particular hazardous and toxic substances;

_ conservation of biological diversity, the sustainable use of its components, and the fair and equitable sharing of the benefits arising out of the utilisation of genetic resources;

_ the management of fresh water resources;

_ coastal zone, estuary and wetland management;

_ desertification;

_ urban environment problems relating inter alia to transport, waste, waste water, air pollution and noise, and the quality of drinking water.

2. Activities eligible for financing include amongst others*:

[*] Order of indents altered

_ support to the elaboration of national, regional and local policies, plans and strategies for sustainable development;

_ schemes to build up the institutional and operational capacities of actors in the development process, i.e. government, non-governmental organisations, private sector, civil society, indigenous peoples, at national, regional and local level;

_ pilot projects in the field including those involving environmentally-sound technologies adapted to local constraints and needs;

_ the creation of instruments for sustainable development, inter alia trade-related instruments such as labelling and certification schemes and green trade initiatives;

_ support to the development and application of environment assessment tools in the preparation and implementation of policies, strategies, programmes and projects;

_ the formulation of guidelines and operational manuals aimed at promoting sustainable development and environmental integration;

_ raising awareness of local populations and key actors in the development process and development co-operation with regard to the implications of sustainable development, in particular through information campaigns and training;

_ inventory, accounting and statistical work, in order to improve the quality of environmental data and environmental indicators;

4.3. In the selection, preparation, implementation and evaluation of activities, particular attention shall be given to:

_ the contribution to the overall objective of eradicating poverty n;

_ local initiatives involving innovative measures aimed at sustainable development;

_ active involvement, support and ownership of local populations, including indigenous communities;

gender-specific specific roles, knowledge, perspectives and contributions of women/girls and men/boys in the sustainable management and use of natural resources, ;

_ the potential for integration into the wider context of Community development cooperation policies and programmes;

_ the internalisation of environmental costs, including through economic instruments;

_ the contribution to strengthening regional cooperation in the area of sustainable development.

4. Lesson-learning and dissemination of the results of the activities carried out will be essential elements of implementing this Regulation, including in support of the implementation of international environmental agreements.

Article 4

Cooperation partners which may receive assistance under this Regulation shall include international organisations, States, regions and regional bodies, decentralised departments, public agencies, private operators and industries, cooperatives, local communities, non-governmental organisations and associations representing local people, in particular indigenous peoples.Article 45

1. Community financing may cover studies, technical assistance, education, training or other services, supplies and works, small grant funds as well as appraisals, audits and evaluation and monitoring missions. It may cover, within the limit established annually by the budgetary authority, technical and administrative assistance costs, to the benefit of the Commission and the beneficiary, related to operations other than the permanent tasks of the public administration, linked to the identification, preparation, management, monitoring, auditing and control of programmes or projects.

Community financing may cover both investment, linked to a specific activity , with the exception of the purchase of real estate , and recurrent expenditure (including administrative, maintenance and operating expenditure).

With the exception of training, education and research programmes, recurrent expenditure may normally be covered only during the start-up phase and on a gradually decreasing basis .

2. A contribution from the cooperation partners defined in Article 4 shall be sought for each cooperation activity. Their contribution shall be requested according to their means and the nature of the activity concerned.

3. Opportunities may be sought for cofinancing with other donors, especially with Member States and the international organisations concerned. In this respect, a coordination with the measures taken by other donors shall be sought.

4. The necessary measures shall be taken to emphasise the Community character of the assistance provided under this Regulation.

5. In order to attain the objectives of consistency and complementarity laid down in the Treaty and with the aim of guaranteeing optimum efficiency for all these activities, the Commission will, in liaison with Member States, take all coordination measures necessary, including in particular:

(a) the systematic exchange and analysis of information on activities financed or being considered for financing by the Community and the Member States;

(b) on-the-spot coordination of these activities by means of regular meetings and exchange of information between representatives of the Commission and of the Member States in the beneficiary country;

6. In order to obtain the greatest possible impact of the activities at global, national and local levels , the Commission, in liaison with the Member States, will take any initiative necessary for ensuring proper coordination and close collaboration with the cooperation partners, donors and other international organisations involved, in particular those forming part of the United Nations system.

Article 6

Financial assistance under this Regulation shall take the form of grants.

Article 7

1. The Commission shall be responsible for appraising, taking decisions to finance and administering activities covered by this Regulation according to the budgetary and other procedures in force, and in particular those laid down in the Financial Regulation applicable to the general budget of the European Communities.

2. Each year the Commission shall present a document establishing strategic guidelines and priorities for implementing the activities to be carried out in the following year. This document shall be discussed in a joint meeting of the committees referred to in Article 8, paragraph 1.

3. Decisions relating to grants of more than EUR 2 million for individual operations financed under this Regulation shall be adopted by the Commission under the procedure laid down in Article 8.

4. The Commission shall inform the Committee referred to in Article 8 7 succinctly of any financing decisions it intends to take with regard to projects and programmes of less than EUR 2 million in value. The information shall be made available not later than one week before the decision is taken.

5. The Commission shall be authorised to approve any extra commitments or additional requirements needed for covering any expected or real cost overruns in connection with the operations, provided that the overrun or additional requirement is less than or equal to 20 % of the initial commitment fixed by the financing decision.

6. All financing agreements or contracts concluded under this Regulation shall provide for the Commission and the Court of Auditors to conduct on-the-spot checks according to the usual procedures laid down by the Commission under the rules in force, in particular those of the Financial Regulation applicable to the general budget of the European Communities.

7. Where operations are the subject of financing agreements between the Community and the recipient country, such agreements shall stipulate that the payment of taxes, duties or any other charges is not to be covered by the Community.

8. Participation in invitations to tender and the award of contracts shall be open on equal terms to all natural and legal persons of the Member States and of the recipient country. It may be extended to other developing countries and, in exceptional cases which are fully justified, to other third countries.

9. Supplies shall originate in the Member States, the recipient country or other developing countries. In exceptional cases, where circumstances warrant, supplies may originate in other countries 10. Particular attention will be given to:

_ the pursuit of cost-effectiveness and sustainable impact of activities;

_ the clear definition and monitoring of objectives and indicators of achievement for all activities.

Article 7 8

1. The Commission shall be assisted by the Committee set up by Article 15 of Council Regulation (EEC) No. 443/92 of 25 February 1992 [8] (PVD-ALA), by the Committee set up by Article 11 of Council Regulation (EC) No 1488/96 of 23 July 1996 (MEDA) [9] or by the Committee set up by Article 21 of the Internal Agreement on the Financing and Administration of Community Aid under the Second Financial Protocol to the Fourth ACP-EC Convention of Lomé [10].

[8] OJ L 52, 27.2.1992, p 1.

[9] OJ L 189, 30.7.1996, p. 1-9.

[10] signed on 20.12.1995.

2. Where reference is made to this paragraph, the advisory procedure laid down in Article 3 of Decision 1999/468/EC shall apply, in compliance with Article 7 (3) and Article 8 thereof.

Article 9

1. By 1 September after each budget year, the Commission shall submit an annual report to the European Parliament and the Council, summarising the activities financed in the course of that year, and evaluating the implementation of this Regulation over that period.

The summary shall in particular provide information about the number and nature of activities financed, the cooperation partners and the countries concerned. The report shall also indicate the number of external evaluations carried out regarding specific activities.

2. The Commission shall regularly evaluate activities financed by the Community with a view to establishing whether the objectives aimed at by those activities have been achieved and to providing guidelines for improving the effectiveness of future activities. The Commission shall submit to the Committee referred to in Article 8(1) a summary of the evaluations made. The evaluation reports shall be available, upon request, to any Member State and to the European Parliament.

3. The Commission shall inform the Member States, at the latest one month after its decision, of the activities that have been approved, stating their cost and nature, the country concerned and the cooperation partners.

4. A financing guide specifying the guidelines and criteria applicable to the selection of activities shall be published and communicated to the interested parties by the Commission services including Commission delegations in countries concerned.

Article 10

1. This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Communities.

2. Four years after the entry into force of this Regulation, the Commission shall submit to the European Parliament and to the Council an overall evaluation of the operations financed by the Community under this Regulation, in the context of overall Community development cooperation, together with proposals concerning the future of this Regulation, including its possible modification or termination.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done in

For the European Parliament For the Council

The President The President