WRITTEN QUESTION E-0019/00

by Bart Staes (Verts/ALE) to the Commission

(19 January 2000)

Subject: Rejection of food aid funded from Echo's budget

Shortly, more than 70 tons of food aid approximately 170 000 tins of beef is to be flown back to the Irish Republic because the Bosnian authorities have refused to authorise its consumption. The failure of this food aid project is a serious financial blow to Médecins sans Frontières and Echo, the Commission's

humanitarian assistance agency. Echo contributed 7,3 million francs to the project, and will not seek to recover this amount because Médecins sans Frontières has complied with all its contractual obligations.

1. When was Echo informed of the refusal by (a) the Croatian customs authorities and (b) the Bosnian customs authorities to admit the food aid?

2. After these refusals, did the Commission take steps to persuade the customs authorities to admit the food after all? If not, why did the Commission not do anything, bearing in mind that the beef complied with quality standards and a serious financial loss was to be anticipated?

3. When was Echo informed of the refusal by the Bosnian authorities to distribute the food aid among Bosnia's disabled?

4. After this refusal, did the Commission take steps to secure permission for the food aid to be consumed in Bosnia? If not, why did the Commission not do anything, bearing in mind that the beef complied with quality standards and a serious financial loss was to be anticipated?

5. When contracting humanitarian contracts out to third parties, will the Commission and Echo in future conclude enforceable contracts which are conditional on results and include provision for repayment if goods and services are not supplied? If not, how will the Commission prevent shortages of funds from occurring in Echo's budget in future as a result of failure to supply goods and services for humanitarian operations?

Answer given by Mr Nielson on behalf of the Commission

(8 March 2000)

The Commission contracted (ECHO/YU-/B7-0214/96/0228AB for ECU 2 200 000) with Médecins sans Frontières Belgium (MSF-B) for the provision and delivery, among others, of approximately 99 tons of food aid (cans of beef goulash) in favour of Bosnia and Herzegovina (BiH) refugees and displaced persons, in January 1997. The budget of the beef goulash under the contract was ECU 155 000. This aid was a continuation of the European Community humanitarian office (ECHO) operations since the beginning of the war in BiH.

The Commission has been following the events surrounding the shipment and the subsequent refusal of the BiH authorities to allow its release during the whole period of the contract. In addition to operational reports on the implementation of the contract, both ECHO Croatia and ECHO BiH field staff were involved in numerous bilateral and trilateral meetings with MSF and between MSF and the authorities respectively, since 17 February 1997.

Following the final refusal of the BiH Supreme Court to an appeal by MSF-B in BiH for the release of the goods by the authorities, MSF-B officially notified the Commission on 5 October 1998 of the fact that the beef goulash purchased under the contract was not distributed as planned but it was stopped by the authorities of BiH upon its arrival in Sarajevo.

The following circumstances should be noted:

- written permission from the Ministry of Agriculture in BiH for the import of the food was obtained by MSF-B (on 12 February 1997) prior to the export of the goods from Ireland,

- the goods were certified as being fit for human consumption by two independent laboratories in Europe,

- on 28 February 1997, and while the food was in transport, the government of BiH adopted a decree banning the import of beef and all beef products from Ireland, Germany and Switzerland,

- Ireland was not subject to Commission Decision (96/239/EC) of 27 March 1996, placing restrictions on beef and beef products exports from the United Kingdom (including Northern Ireland),

- following the ban imposed by the BiH government on this shipment, it became impossible to re-direct the food to a humanitarian destination other than BiH.

It is certainly regrettable that the Federation government issued a ban on the import of Irish beef products. The Commission, however, has no means to rescind the order of a government it was committed to supporting.

According to the framework partnership agreement the Commission is not under an obligation to reimburse the undistributed goulash. However, after careful consideration of the facts and the exceptional circumstances under which the project was implemented, the Commission has accepted MSF-B invocation of force majeure clause under the general conditions of the CCP(1) related to the contract. This acceptance is seen only in the context of this individual situation and does not prejudge future situations of similar kind.

(1) CCP: Article 5.3 in the General Conditions of the Contract Partnership agreement states The Partner shall have the right to suspend or terminate, in writing, with immediate effect, the implementation of the operations for reasons of force majeure. The amounts committed and spent by the Partner up until that time will be charged to the budget of the operation.