Special report No 3/92 concerning the environment together with the Commission's replies
Date: 1992-06-18
Institutions: European Court of Auditors
Subjects: EU control, EU environmental policy, EU financing, action programme, environmental impact, polluter pays principle













EUR-Lex - 31992Y0923(01) - EN






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31992Y0923(01)

Special report No 3/92 concerning the environment together with the Commission's replies  


Official Journal C 245 , 23/09/1992 P. 0001 - 0030 





 TABLE OF CONTENTS     Paragraph reference   Introduction 0.1  - 0.10  Chapter 1 1.1  - 1.21  The objectives of Community action relating to the environment and the resources available 1.1  - 1.21  Itemization of expenditure 1.1  - 1.6   The action programmes for the environment 1.7  - 1.9   The coordination of intervention and  the coordinator's role 1.10 - 1.15  Consideration of environmental impact in Structural Fund initiatives 1.16 - 1.18  Project financing and programme financing 1.19 - 1.21  Chapter 2 2.1  - 2.27  The management of appropriations earmarked for the environment 2.1  - 2.27  Environment appropriations and research appropriations 2.1  - 2.5   Award and conclusion of contracts 2.6  - 2.9   Monitoring the financial aspects of contracts 2.10 - 2.14  The grant of operational subsidies 2.15 - 2.17  Project results: the exploitation of results and the principle of preventive action 2.18 - 2.22  The creation of databases 2.23  - 2.27  Chapter 3 3.1  - 3.28  The structurally orientated financial instruments and the environment 3.1  - 3.28  The evolution of the procedures 3.1  - 3.5   Programme content 3.6  - 3.12  The link between investments and environmental protection 3.13 - 3.20  The risks of a negative impact on the environment of other investment projects 3.21 - 3.28  Chapter 4 4.1  - 4.13  The protection of the quality of the environment 4.1  - 4.13  Inspections at a number of local monitoring units 4.1  - 4.5   Prevention and the 'polluter pays' principle 4.6  - 4.8   The application of the environmental Directives 4.9  - 4.13  Conclusions and recommendations 5.1  - 5.8     Page   The Commission's replies  20   SPECIAL REPORT No 3/92 concerning the environment together with the Commission's Replies (92/C 245/01)   INTRODUCTION  0.1. Over the years, the protection of the environment  has gradually become an essential feature of Community  activity. It made its appearance in the inter-institutional debate for the first time at the meeting of  Heads of State and Government in  Paris in 1972.  0.2. The first action programme on the subject was  adopted in a 1973 decision covering the period 1974-1976(1)  and was followed by three other multiannual  programmes in 1977(2) , 1983(3)  and 1987(4) .  Appropriations for Community action to protect the  environment were first entered under specific headings in  the Communities' budget nomenclature(5)  in the 1975  budget. In 1981 the various Commission departments with  responsibility for the environment and consumer protection  were consolidated into a Directorate-General.  0.3. At the Stuttgart summit in 1983, the European  Council stressed the urgent need to speed up and reinforce  the Community action that was being taken at national,  Community and international level with a view to combating  the pollution of the  environment(6) .  0.4. The Single European Act of February 1986, which  entered into force on 1 July 1987(7) , introduced into  the EEC Treaty Articles 130r and 130t, which concern the  environment. These Articles state that the object of  Community action in this field is to preserve, protect and  improve the quality of the environment, to contribute  towards  protecting human health, to ensure a prudent and  rational utilization of natural resources. They also  specify that action by the Community is to be based on the  following principles:  - preventive action should be taken,  - priority should be given to making good environmental  damage at source,  - the polluter should pay.  0.5. The same Articles also emphasise that the  requirements of environmental protection are to form an  integral part of the Community's other policies. They  stipulate, in accordance with the principle of  subsidiarity, that the Community shall take  action  relating to the environment to the extent to which the  objectives mentioned can be better attained at Community  level than at the level of the individual Member States.  Furthermore, protective measures adopted in common shall  not prevent a  Member State from maintaining or introducing  more stringent protective measures compatible with the  Treaty.  0.6. Other provisions of the Single European Act (Article  18, which added the new Article 100a) specify that in its  proposals concerning health, safety, environmental  protection and consumer protection the Commission is to  take a high level of  protection as its minimum target.  0.7. As a result of the reform of the Structural Funds,  which was also effected by the Single European Act  (Article 23, which added the new Article 130d),  environmental considerations are to play a larger part in  the management of the Funds.  0.8. At Dublin in June 1990 the European Council adopted  a general declaration on the environmental imperatives.  The Council recognized that the natural environment which  forms the life-support system of our planet is gravely at  risk and undertook,  inter alia, to intensify its efforts  to protect and enhance it. It also expressed the hope that  action undertaken by the Community and its Member States  would be developed on a coordinated basis and on the  principles of sustainable development and  preventive and  precautionary action(8) .  0.9. The Treaty on European Union, which was signed at  Maastricht on 7 February 1992, reinforces the new  Community objective of protecting the environment and  provides for a cohesion fund for four Member States in the  sphere of transport and the  environment. Other current  initiatives concern the creation of a European  environmental agency(9) , as well as the introduction of  a financial instrument (LIFE), the decision on which was  taken by the Council on 12 and 13 December 1991(10) .  0.10. This Special Report has been prepared in response  to the Resolution of the European Parliament of 3 April  1990 embodying the comments which form an integral part of  the decision granting discharge in respect of the  implementation of the  general budget for the financial  year 1988(11) . The report is the outcome of audits by  the Court at the Commission and in six Member States  (Germany, Greece, Spain, Italy, the Netherlands and the  United Kingdom). The arguments presented are divided into  four chapters, which discuss the  objectives and resources  of the Community environmental measures, the management of  the appropriations earmarked for this area, the  relationship between the structural instruments and the  environment and the implementation of the environmental   directives. The report does not, on the other hand,  discuss the aspects associated with the common  agricultural policy or the Community's external relations.   CHAPTER 1  The objectives of Community action relating to the  environment and the resources available Itemization of expenditure 1.1. The Community's environmental expenditure is spread  across various budgetary appropriations and other instruments. At Dublin in June 1990 the Council invited  the Commission 'to review the overall level of budgetary  resources devoted to Community  environment policy,  currently disbursed through a number of separate funding  mechanisms, and to submit its findings to the Council as  soon as possible'.  1.2. The Commission presented a relatively detailed review  in January 1991, in the Annex to the proposal for a  Council regulation establishing a financial instrument for  the environment. This review led the Commission to  estimate that, as from 1989,  environment-related  expenditure ought to amount on average to some  650 Mio ECU, compared with approximately 135 Mio ECU in  previous financial years.  1.3. Nevertheless, the results of this appraisal should be  treated with caution, as the criteria on which it was  based were poorly defined and difficult to verify,  particularly where research and the Structural Funds are  concerned. The evaluations  carried out were not always  based on precise calculations and consequently no  systematic reference documentation is available.  Furthermore, many measures, such as the Structural Funds'  operational programmes for example, are classified under   non-homogeneous headings which embrace several sectors,  e.g. tourism and the environment. Under the circumstances,  it is difficult to determine at the outset the proportion  which a particular sector will account for at the  realization stage and the  extent to which the effects are  likely to complement each other, or the contrary.  1.4. Despite these reservations, the Court of Auditors has  endeavoured to update the Commission's review by  incorporating 1991 budgetary data, new programmes, or more  accurate information concerning the periods to be taken  into account for the  various estimates. The results of this updating are shown in Table 1, whilst Table 2  provides a breakdown, by Member State and Fund, of the  environment-related contributions contained in the  Structural Funds' Community support frameworks.    Table 1 - Estimate of Community expenditure on the environment in 1991   (Mio ECU)    Period Duration (years)  Total  Annual average   Environment title of the budget plus support 1991 1   109,0  109,0  Environmental research:   - specific research programme 6.91-12.94 3.5   261,4  74,7  -multinational JRC programme 1992-1994 3   148,5  49,5  Structural Funds:   -Community support frameworks:     2 539,1  573,4  - Objective 1 1989-1993 5  1 780,6  356,1   -Objective 2 1989-1991 3  492,1  164,0   -Objective 5b 1989-1993 5  266,4  53,3   -ENVIREG 1991-1993 3   500,0  166,7  -Objective 5a 1989-1993 5   39,0  7,8  Forests (articles B2-515 and B8-255 of the budget) 1991 1   20,0  20,0  ECSC operational budget 1991 1   30,0  30,0        3 647,0  1 031,1    Table 2 - Estimate of appropriations for the environment under the Structural Funds' Community support frameworks (1989/1993) (*)   (Mio ECU)   Member States   ERDF   FSE    EAGGF   OTHER   TOTAL    CSF Environ- ment % CSF Environ- ment % CSF Environ- ment % CSF Environ- ment % CSF Environ- ment %   Belgium  137,29 11,72 9 % 43,67 0,19 0 % 11,54 0,00 0 % 0,00 0,00  192,50 11,91 6 %  Denmark  25,90 5,30 20 % 13,70 0,00 0 % 4,50 0,00 0 % 0,00 0,00  44,10 5,30 12 %  Germany  443,82 91,35 21 % 179,70 40,04 22 % 181,77 60,89 34 % 0,00 0,00  805,29 192,28 24 %  Greece  3 662,00 202,00 6 % 1 728,00 0,00 0 % 1 277,00 0,00 0 % 526,24 0,00  7 193,24 202,00 3 %  Spain  6 780,10 663,76 10 % 2 546,00 5,45 0 % 1 416,90 170,35 12 % 0,00 0,00  10 743,00 839,56 8 %  France  1 181,86 193,79 16 % 612,62 2,45 0 % 609,02 52,34 9 % 7,90 0,00 0 % 2 411,40 248,58 10 %  Ireland  1 646,00 114,50 7 % 1 372,00 0,00 0 % 654,00 113,50 17 % 0,00 0,00  3 672,00 228,00 6 %  Italy  5 236,40 537,33 10 % 1 814,70 39,59 2 % 985,90 102,23 10 % 140,00 8,00 6 % 8 177,00 687,15 8 %  Luxembourg  7,90 0,00 0 % 0,18 0,00 0 % 1,42 0,00 0 % 0,00 0,00  9,50 0,00 0 %  Netherlands  71,66 0,00 0 % 33,94 0,00 0 % 12,50 0,00 0 % 0,00 0,00  118,10 0,00 0 %  Portugal  3 757,00 0,00 0 % 2 028,00 0,00 0 % 1 173,00 0,00 0 % 410,00 0,00 0 % 7 368,00 0,00 0 %  United  Kingdom  1 655,40 114,76 7 % 621,70 9,53 2 % 154,90 0,00 0 % 0,00 0,00  2 432,00 124,29 5 %   TOTAL    24 605,33 1 934,51  8 % 10 994,21 97,25 1 % 6 482,45 499,31 8 % 1 084,14 8,00 1 % 43 166,13 2 539,07 6 %        || ||  || ||  || ||  || ||  || || (*) For the Community support frameworks approved before December 1991.    1.5. This showed that in 1991 the Community earmarked a  total of at least 1 000 Mio ECU to environment-related  activities. This estimate is incomplete, however, in that  it does not include the expenditure that may appear in the  Community programmes  or initiatives which are not included  in ENVIREG; neither does it take into consideration  expenditure associated with the setting aside of  agricultural land (200 Mio ECU, articles B1-400 and B2-500  of the budget), operations outside the Community,  or  European Investment Bank lendings (which exceed  2 000 Mio ECU annually).  1.6. At both Community and national level, careful  itemization and detailing of expenditure are essential, in  that they provide an objective and verifiable basis for  determining the types of operation, methods of  intervention and services which have  an environmental  impact. At present it is only possible to make an  approximate estimate of the level of funding for the  Community's environmental activity in the various sectors.  Improvements are needed in this area to provide fuller and  more  accurate information, for example by including  analytical codes in accounting software, in order to  facilitate the processing of financial data.  The action programmes for the environment 1.7. The Community's multiannual action programmes for the  environment set out the basic principles and objectives of  environmental policy. They list the general guidelines,  the approach to prevention and control of pollution and  the measures to be  taken in various specific sectors. The approach adopted is one of prevention, the aim being to  anticipate problems before they appear, rather than to  counteract the effects of them later. Environmental  protection is to be included among the  fundamental factors  which are considered when economic decisions are taken and  it is essential that strict standards be established in  the various sectors in order to prevent pollution and  improve the management of resources.  1.8. The programmes do very little towards translating  this approach into operational terms, however: there is no  quantification of the results to be achieved, even partial  ones, and there is only passing reference to the resources  to be deployed.  Although the principles and concerns are  expressed clearly, there is less certainty regarding the  action to be taken in response to them and to redress  actual situations and there is no real progress on this  point from one multiannual programme to  the next.  Moreover, the programmes emphasise that progress must not  be achieved in the environmental sphere at the cost of  jeopardizing the operation of the common market, which  raises a problem to which, in many ways, it is often  difficult to find  a solution.  1.9. In any case, greater attention should be given to the  real impact of programmes and measures so that the way in  which measures are defined is compatible with the way in  which they are put into effect.  The coordination of intervention and the coordinator's  role 1.10. A number of departments have responsibility for  specific aspects of environmental policy. DG XI  (Environment, nuclear safety and civil protection) has a  general responsibility in this field and handles the  budget appropriations covered by the  'environment' headings. Research-related aspects are the responsibility  of DG XII. The Institute for the Environment and the  Institute for Remote Sensing Applications, both located at  Ispra, are part of the Joint Research Centre. Within DG VI   (Agriculture) and DG VII (Transport) there are specialized  departments which deal with environmental and ecological  questions. The terms of reference of DG III (Internal  market and industrial matters) include the  implementational aspects of several  directives, such as  combating noise pollution. DG V (Employment, industrial  relations and social affairs) and the European Foundation  for the Improvement of Living and Working Conditions in  Dublin also have some responsibility in environment   matters. Other aspects are the responsibility in  particular of DGs XIV (Fisheries), XVI (Regional policy),  XVII (Energy), XVIII (Loans and investments) and the  European Investment Bank.  1.11. This spread of responsibilities requires  substantial coordination, which is far from having been  achieved. In the case of many of the operations funded by  the special 'environment' appropriations, research or ECSC  loans, interdepartmental  consultation is arranged only  occasionally. In the case of the Structural Fund  financing, the DGs concerned do provide each other with  information, both in preparing the Community support  frameworks and for the operational programmes.   Unfortunately, the documents used are too vague for the  consultation to be productive or the consideration of  environmental aspects worthwhile, especially as the  deadlines set are very short. Under optimum circumstances  consultation does give rise  to textual modifications, but  the practical implications of them are not always  apparent.  1.12. The lack of coordination also has repercussions for  the work carried out. In the aquaculture and fish-farming sectors, funding was provided for several intensive  exploitation projects, in particular in the lagoons and  other wetland areas along  the Mediterranean, and was  charged to appropriations earmarked for fisheries and  additional IMP or ERDF appropriations. Simultaneously  DG XI was working on wetland conservation measures, even  going so far as to provide financial aid to environmental   protection agencies wishing to purchase lagoons in order  to protect them from intensive exploitation. Audits in  Greece revealed a case where aid was provided under an IMP  programme for the construction of sea defences which  included a road and  overhead power lines. The sea defences  had to be modified under a contract financed by DG XI in  order to provide an adequate flow of water, as the flow  had been disrupted by the initial infrastructure, and part  of the proposed power lines had to be  removed as they were  a hazard to birds.  1.13. On 17 November 1986 the Council adopted two  Regulations, which were subsequently amended in  1989(12) , to combat acid rain, forest decline and forest  fires. Responsibility for management of the forestry  measures, for which commitment appropriations of  20 Mio ECU were entered in the 1991 budget (articles B2-515 and B8-255), rests with a specialized  unit within the  agriculture Directorate General, DG VI, and is concerned  primarily with increasing knowledge and disseminating  information in the areas covered by the regulations.  Coordination with DG XI is practically confined to the  transmission  of certain items of data, collected in ways  that lack any common approach with a view to ensuring  complementarity, especially in forestry matters.  Consultation of DG XII, even where the two DGs are working  in similar areas, such as the study of air  and ground  pollution and its influence on forest decline, is mainly  concerned to avoid duplication of financing. Nor did the  documentation examined offer any evidence of coordination with the forest improvement and protection measures  financed by  the Structural Funds and managed by other  departments within the same DG, DG VI. Situations like  this weaken the impact of a basically sound idea and  impair proper exploitation of the work financed.  1.14. Because the various approaches are too isolated,  there is also a lack of general reports to provide an  overview of all the environmental activities funded by the  various Community instruments. Although, in general, there  is no shortage of  well-researched documents on specific  aspects, there is, on the other hand, very little  documentation concerning the work done by the various  departments and Directorates General at the Commission  that might provide a global approach to the subject.  If  the coordinating function is to be performed properly,  that presupposes a coordinator whose role has been clearly  defined. DG XI's task should be clearly defined on this  point, so as to improve the complementarity and  effectiveness of the  various initiatives.  1.15. Better coordination is also needed in the Member  States. The responsibility for environmental aspects lies  with various government departments: the environment  departments, but also the public works, industry,  agriculture, public health, civil  protection, marine,  scientific research and similar authorities. In various  cases examined by the Court there was, for all practical  purposes, no coordination between the departments  concerned. The environmental protection and health  authorities  were not informed of programmes and measures  which might damage the environment and the various  departments pursued their own sectoral objectives without  adequate awareness of the overall need to protect the  natural environment. Furthermore, the way  in which  responsibilities are allocated constantly changes and,  depending on the authority questioned, the Court was confronted with different answers to the same question,  especially on the subject of the allocation of  responsibilities or  procedural problems.  Consideration of environmental impact in structural fund  initiatives 1.16. Following the reform of the Funds, the Community  departments are seldom aware of the exact details of the  individual operations funded by the structural  instruments, as decisions are essentially taken at  national or regional level and, in many  cases, during the  execution of the programmes. The latter indicate the type  of measures envisaged, but they do not specify what  technology is to be employed or even, in many instances,  the location, or even number, of investments. Furthermore,  the  work of the monitoring committees seems unlikely to  provide satisfactory information on the matter and audits  of 13 operational programmes showed that DG XI had neither  taken part in the work of the committees nor received a  copy of the minutes of  the 20 meetings they had held.  Financing by programmes makes it difficult to carry out  examinations at Community level of the projects and thus  take account of their environmental implications.  1.17. Both the twelfth recital and Article 7 of Council  Regulation (EEC) No 2052/88 of 24 June 1988(13) , which  defines the general framework for the reform, state that  the measures financed must be in conformity with Community  policies, including those concerning the protection of the  environment. Very little has been done towards effectively   translating this obligation into operational terms. The  implementing regulation, Council Regulation (EEC) No  4253/88(14)  of 18 December 1988, in particular, does not  contain any provisions which are designed to produce such  conformity, be it at Community or national level.  1.18. At the very least, the operational programmes  should systematically indicate exactly what constraints  are to be taken into account, as well as the techniques to  be employed or avoided in carrying out the measures  funded, so as to ensure that  finance provided by the  structural instruments is not used for investments which  are incompatible with the Community's concern to protect  the environment.  Project financing and programme financing 1.19. Management of the research appropriations and the  appropriations under the environment title takes the form  of funding for projects or studies, even if the operations  form part of overall programmes. There is, therefore,  provision for direct  monitoring of every project at  Community level. Structural Fund aid, on the other hand,  is essentially concerned with programmes which are funded  in annual tranches in line with the progress made; in this  case the responsibility for monitoring the  implementation  of them lies primarily with the monitoring committee,  acting within the partnership framework.  1.20. Both these methods of monitoring, the direct and  the indirect, have their advantages and disadvantages.  With direct monitoring it is possible to assess every  project aided for content, implementation and effects; on  the other hand, it calls  for significant resources in  terms of manpower and administrative facilities,  particularly if the number of projects is high. Indirect  monitoring aims to take a more global approach to  intervention and is essentially concerned with the overall   results and the impact on the situation which the  Community initiative seeks to correct or modify.  1.21. Nevertheless, there is a risk that the Community  will fail to secure the benefits of either method, due to lack of care, or because there are not enough resources  available to provide proper project monitoring or there is  no satisfactory  administrative process for evaluating  results. To a large extent this applies in the case of   environmental expenditure, where project-monitoring is  weak and the appraisal of the programmes contains very few  elements relating to the environmental  impact. As a  result, the function of Community aid is mainly one of  redistribution and support for initiatives: an important  function certainly, but one which does not leave much room  for concern for the effective use of appropriations.   CHAPTER 2  The management of appropriations earmarked for the  environment Environment appropriations and research appropriations 2.1. The appropriations entered under the 'Environment'  title of the budget are managed by DG XI (Environment,  nuclear safety and civil protection) for the financing of  individual projects. The aid is granted in the form of  contracts with the  beneficiaries, setting out the  respective tasks and the period for carrying them out and  detailing the reports and other documentation which are to  be provided, particularly on the financial side. Unlike  the operational programmes financed by the  Structural  Funds, where management is largely devolved to national  and regional level under the partnership framework, these  individual projects are defined and evaluated directly by  the Commission in association with the beneficiaries.  Table 3  gives more detailed information concerning the  volume of these appropriations over recent years.  2.2. The same type of management by contract is employed  for projects financed with DG XII (Science, research and development) appropriations, some of which are  specifically concerned with environmental problems. In the  case of both DG XI and DG XII,  joint multiannual  programmes, known respectively as The European Community  Environmental Action Programme and The Specific Research  Programmes, have been adopted in implementation of the  framework programme guidelines and set out the action to  be  taken, along with a broad description of the form  intervention is to take. Some of the measures, in turn,  are carried out in the form of programmes, which provide  an outline procedure for projects.  2.3. At the Joint Research Centre's Ispra establishment,  the Institute for the Environment specializes in  particular in research problems concerning the natural  environment. The number of staff employed is similar to  that of DG XI and its annual  budget amounts to  approximately 30 Mio ECU. Another institute at the  establishment is working on remote sensing applications,  many aspects of which also concern environmental matters.  2.4. Overall, these activities cover a wide range of  intervention. The number of studies and projects is large  and covers many areas. The measures involved, however,  have been established and developed over the years within  the two DGs concerned and  in some areas they would benefit  from greater coordination. As regards the preparation and  implementation of programmes such as ACE (Community action  for the environment), STEP (Science and Technology for  Environmental Protection) or EPOCH  (climatology and  natural health hazards), inter-departmental meetings are  organized and this generally highlights the desirability  of more extensive collaboration, for example, in selecting  exactly what topics, models or substances are to be   investigated. They amount, however, to declarations of  intent that ought to be developed further on the level of  practical results and which leave few traces in the project files. The first programme for the environment  (1974-1976) included an Annex  which set out the  relationship between the actions covered by research  appropriations and the points on the environment  programme, but it is an approach which did not feature  again in subsequent documents.  2.5. Contacts are equally superficial at the decision and  implementation stages. The works need to be better  planned, with a clear distinction between the basic  studies and research, technological development and repeat  applications, and greater  synergy must be created between  the measures, so that the combined effort is enhanced and  the expected results achieved more efficiently. The  Court's audits uncovered several cases of studies on  related or similar topics which had been arranged   simultaneously but charged to two appropriations,  sometimes with the same contractors, without any  coordination. The same phenomenon exists in the case of  the link with the Ispra establishment.  Award and conclusion of contracts 2.6. Private treaty arrangements feature very largely in  the award and conclusion of the contracts financed from  the environmental appropriations. Information concerning  the possibility of collaboration is generally published in  the Official Journal  of the Communities, but it takes the  form of a notice which publishes information regarding  initiatives, rather than a genuine call for tenders. In  the case of MEDSPA (Community action for the protection of  the environment in the Mediterranean  region) and CORINE  (information system concerning the state of the  environment and natural resources in the Community), more  precise criteria have been established for selecting  offers of cooperation, but the procedures still need to be  improved in  order to achieve a less passive approach, whereby the works to be carried out are defined and  contractors are selected to carry them out on the basis of  a call for tenders.  2.7. Furthermore, Community aid is very often only one  part, a significant one but still only a part, of a  financing plan produced by the contractor in order to  cover the costs of the operation. In some of the cases  examined, the financing plan  involved the support of up to  a dozen agencies. This type of situation does not lend  itself to the use of invitations to tender on the part of  the Commission or to consultation of the Advisory  Committee on Procurements and Contracts. It is   particularly open to criticism in cases where, as the  Court has found repeatedly in the course of its audit  work, the author of the financial package and the aid  recipient is the undertaking that is carrying out the  works. There would be a greater  element of competition in  such procedures if they were handled by the contractor. As  things stand, the undertaking that is responsible for the  works is in a position to fix prices by private treaty  only, a situation which should be avoided.  2.8. As for the work of the advisory committees,  especially those set up under the MEDSPA and ACNAT (action  by the Community relating to nature conservation)   programmes, it is mainly intended to provide the means of  establishing a link with  representatives of the Member  States and does not aim specifically to ensure that the  price of the operations financed is a fair one.  2.9. In order to ensure that the aid is used correctly and  for the activities concerned, contracts contain a clause  to the effect that evidence of the expenditure must be  provided. In the case of contracts concluded with large  undertakings, evidence  of expenditure is provided almost  exclusively by the undertaking's internal invoices, for staff services, supplies of material and equipment,  research costs, overheads, etc. This type of evidence is  of little probative value and it would be better  for it to  be replaced by a fixed-price contract, the price being  determined on the basis of a strictly enforced call for  tenders. Such a procedure would improve transparency and  encourage the expansion of the important market which the  environment  constitutes.  Monitoring the financial aspects of contracts 2.10. DG XI's monitoring of the financial aspects of  contracts gives rise to several observations. The files  are very incomplete and, in various cases, it was only in  the course of on-the-spot audits of contractors that the  Court was able to see the  information which they had sent  to the Commission, even where evidence of expenditure was  concerned. On-the-spot audits also provided the occasion  on which the Court was able to ascertain the number of  successive contracts that had been concluded  with the same  party, the data obtained at DG XI having proved to be very  patchy. Insofar as the contracting agencies are required  to make the effort to provide documentation, the documents  in question should be the subject of accurate   administrative handling, so that they are used fully and  in a transparent way.  2.11. Contractors are not given many precise instructions  concerning the method to be followed in providing evidence  of expenditure. There is no uniform guide which applies in  all cases, nor are there differentiated methods for  determining the type  of evidence that is most suitable for  the type of contract or works in question. Direct contact,  initiated by one or other of the parties concerned and  poorly documented (or not documented at all), plays an  important role, but the solutions adopted  vary widely, having regard also to the absence of detailed information  regarding eligible expenditure.  2.12. Where evidence of expenditure is concerned, this  type of approach is not satisfactory, as the Court's on-the-spot audits of a dozen contractors showed. One  contractor kept virtually no books and sent to the  Commission whatever figures were  considered reasonable.  Another had expended considerable creative effort on using  the contract headings to classify expenditure which was  frequently unrelated to the project financed, which simply  led the auditors to conclude that the contractual   resources had been used indiscriminately for all the  contractor's business. There were four other projects  where evidence was available for only part of the declared  expenditure.  2.13. In another case the contractor had held a cash  advance from the Commission for an amount of 100 000 ECU  for seven months; as no other expenditure had been  incurred in connection with the contract during that  period, the advance had been used  to finance other  activities. The contract, however, provided that a pilot  plant for processing waste was to be constructed within  six months of signature. At the time of the Court's visit,  ten months after the start of the project, a site still  had  to be found for the pilot plant and consideration was  being given to establishing it in a different region from  that initially proposed, but there was no trace of these  problems on the Commission's file. The contractor thought  that the pilot plant  was a prototype for the country in  question, and it was only during the Court's visit that he  learnt that a project of the same type was being carried  out as part of the ENVIREG programme, using finance from  the Community structural funds.  2.14. In order to improve the technical and financial  monitoring procedure, DG XI has often used intermediate  agencies to coordinate operations. These are service  companies or other external consultants which, in many  cases, are paid from the  appropriations for support  expenditure (Chapter B8-43 of the budget) and are thus  involved in contract management, acting on the  Commission's behalf in relations with contractors. As a  result of its audit work, the Court concluded that the use  of  such agents did not improve monitoring: the numerous  changes in personnel and agencies during the execution of  contracts, the very succinct nature, or absence, of  documentation in relation to monitoring and the paucity of  the information led the  Court to think that, on the  contrary, a more effective way of checking the conditions  under which works are carried out is called for.  The grant of operational subsidies 2.15. Various subsidy appropriations are provided under  the 'Environment' title, B4-3, of the budget (items B4-3061, B4-3081, B4-310), including the promotion of  European representative organizations operating in the  environmental sphere. The action  programme underlines the  fundamental role of these organizations in fostering  awareness of environmental problems and instituting  environmental policy and the budget offers the possibility  of a lump-sum contribution to the operation of such  groups.   2.16. Nevertheless, the procedures for granting lump-sum  subsidies should be similar, irrespective of the budget  appropriation to which they are charged, and there is no  justification for following different procedures according  to whether the  subsidies are charged to title A3 or B4 of  the budget. Furthermore the grant criteria should be set  out clearly, so as to reinforce the selective nature of them, and the way in which the amounts paid are used  should be supervised more closely.  2.17. Some of the service contracts charged to  appropriations other than those mentioned above are, in  reality, subsidies, with a large proportion of the agreed  consideration being used to cover the beneficiary's  general overheads. Situations of  this kind, which are favoured by the  ambiguity of management methods and procedures, should be scrupulously avoided and the award of  service contracts should be kept strictly separate from  the grant of subsidies.  Project results: the exploitation of results and the  principle of preventive action 2.18. There is also a need for a more precise structure  for exploiting the results of contracts, publicising  knowhow and, more generally, ensuring that, where studies  or pilot projects are carried out, they are not wasted.  Forecasts of the practical  utility of the research or  studies funded and the possibility of their continuing  into an operational phase probably exist at the start of  the projects, but they do not appear on the files produced  to the Court. The problem is sometimes mentioned  during  the final examination of the work, at the initiative of  the contractors, or the Commission departments, or both.  This procedure is, however, not very clear and it should  be improved substantially, so that decisions are taken in  full  knowledge of the facts. The quality of contractual  collaboration is impaired, particularly as regards proper  utilization of the works funded, if scrutiny of the  documents received and the decisions which they require  are delayed too often.  2.19. The files on important research, such as the  processing of waste or the protection of marine algae, are closed without any decision being taken as to the  possibility of practical application or any order of  priority established for the  destination of future  finance, and without there being any possibility of making  a check on the proposed measures so that the work done is  not wasted. Similar findings were made in the case of  research contracts, which in practice had been used to   fund university dissertations without any indication as to  the utility of such work for the Community programme.  2.20. The current rules state that Community action must  be based on the principles of prevention and 'the polluter  pays'. Several of the contracts examined, however, were  essentially of a remedial, rather than preventive, nature.  2.21. This applies in Italy, for example, in the case of  the aid granted for the removal of refuse and the  restoration of the countryside in the Tremiti  (250 000 ECU) and Egadi islands (144 800 ECU), where the  pollution was caused mainly by the  influx of tourists and  holidaymakers, or the grant for cleaning up a wetland lake  in Tuscany, which had been polluted by agricultural  fertilizers and the discharge from residential holiday  sites (200 000 ECU). Also in Italy, Community aid of  250  000 ECU was granted towards the purchase of a lagoon  in the Venice region.  2.22. In terms of improving the environment, the merits  of such projects are undeniable. On the other hand, the  emphasis is on cleaning up rather than prevention and if  the number of such projects were to increase, especially  if nothing is done to  introduce a real deterrent to  recurrent pollution, this would inevitably lend credence  to the idea that polluters are not required to pay and  that the environmental cost of an activity does not have  to be borne by the parties engaging in that  activity.  The creation of databases 2.23. The compilation and availability of databases on  natural biotopes, sources of pollution and the evolution  of pollution are essential to any action concerning the  environment. With a view to expanding and harmonizing  information, the Commission  has produced the database  which is the object of the CORINE programme. The programme  as originally planned was to be carried out over a period  of four years, from January 1985, but it was extended for  a further two years by Council Decision (EEC) No   90/150/EEC(15)  and the total cost of the programme was  increased by 4 Mio ECU to 10,5 Mio ECU.  2.24. The database was to use a standard base to supply  around forty indicators relating to natural biotopes and  other ecological factors for the Community as a whole. As  the standard of environmental information that is  available within the Member  States varies widely, however,  considerable difficulties have been encountered in  implementing the programme. In some countries the  information was already available to a greater or lesser  extent and the system essentially aimed to ensure that it   was compatible. In other countries, however, the  collection work was substantial and is still far from  complete. As a result, the information collected hitherto  is often patchy and more use should be made of it.  2.25. The audits carried out by the Court in the Member  States revealed a certain lack of coordination in the  efforts being made to create sources of information.  Departments set up monitoring networks or databases,  sometimes with assistance from  the Community structural  funds, without any coordinated approach or methodology and  even without being aware of the existence of the CORINE  programme. Divergent methods are also employed in the case  of the aerial surveys financed by the Community,  without any justification for the divergence and without any  liaison with the specialized institute for remote sensing  which exists within the Ispra establishment.  2.26. More effective action is also needed, to facilitate  access to the information available and to encourage use  of it, notably by setting up and publishing lists of  existing data bases. Several experts and specialist  organizations pointed out in  the course of the Court  audits that the Commission finances a substantial number  of studies, but the resulting reports are not readily  available to the public, even though the Community itself  has adopted a Directive to ensure access to information  in  the field of the environment(16) . Furthermore there is  insufficient liaison with the Community Statistical  Office.  2.27. The period of implementation for the CORINE  programme, as fixed by the Council Decision, expired at  the end of 1990 without any arrangements being made for  the future of the work. Continuation and updating of data  collection would normally be  entrusted to the European  environment agency, but it has not yet been possible to  set one up. In the meantime there is a risk that the  information collected will cease to be relevant and will  therefore lose its utility.   CHAPTER 3  The structurally orientated financial instruments and the  environment The evolution of the procedures 3.1. At the national level, the Court's checks did not  establish that the reform of the Funds had brought about  any appreciable progress in procedures designed to give more attention to environmental problems in the drafting  of programmes.  3.2. The bulk of the work involved in preparing the  various types of plan (development plans, Community  Support Frameworks, operational programmes) is carried out  by the departments responsible for regional development,  agriculture and employment,  each in its own field. In most  of the countries and regions visited, the departments  responsible for the environment were not formally  consulted with regard to the preparation of the programmes  in question.  3.3. This was the case in the Netherlands and Germany,  where, in general, the department in question had either  not been informed or had been informed afterwards in the  context of the usual inter-departmental exchanges of  information. On those  occasions, as in the Saarland, where  the local authorities were consulted beforehand, their  scrutiny was virtually confined to the calculation of  costs and the analysis of certain technical aspects.  3.4. In Germany, the Federal Environment Office carried  out a prior assessment of national plans for town and  country planning made by the Ministry responsible. On the  other hand, there was no assessment of plans concerning  eligible areas that were  drafted in the context of the  European Structural Funds by the Federal Ministry of the  Economy or the Federal Ministry of Agriculture, even  where, as is the case for the new Laender, the Federal  government was involved in financing them. In the  United  Kingdom, the ministerial departments responsible for the  protection of the environment had also not been involved  in planning and decision-making procedures concerning  Community structural measures.  3.5. The work of the different levels of government  involved in carrying out Community procedures is often  handicapped, particularly in environmental matters, by  insufficient knowledge of the subject, a lack of suitable  tools, and even conflicts of  jurisdiction or incomplete  authority. The technical knowledge and resources needed  for assessing the environmental impact of the initiatives  being financed are often lacking. The monitoring  committees are too passive in their approach and their   interventions are too sporadic. The relevant provisions  have become so manifold and complex that the numerous  public and private bodies concerned either have no  knowledge of them or are not in a position to ensure that  they are applied. During its  audits in various regions of  several Member States, the Court itself had to supply the  departments responsible for the preparation of programmes  with the necessary information as to the existence and  content of various provisions of Community law  regarding  the protection of the environment.  Programme content 3.6. Nevertheless, environmental problems have an  important place in the operational programmes, and, as  stated above, a significant part of the aid is intended  for operations presented as being beneficial for the  environment.  3.7. The number of operations has indeed increased,  together with the doubling of the funds, but qualitative  changes in types and modes of intervention have been more  limited. Most of the measures earmarked as belonging to  the environmental field  are identical to others that have  already been financed under another name or heading:  infrastructure projects in the fields of waste or waste  water treatment, forestry work or soil protection.  3.8. Often, the measures concerned are more a matter of  providing support for the development of activities and do  not take into account the policy of combating the sources  of pollution. No distinction is made between the (largely  dominant)  corrective side of the matter and the  preventative side, and little information is supplied as  to expected impact. The operations envisaged and the  techniques to be used are mentioned in generic terms, thus  opening the door to different and even  contradictory  definitions and applications.  3.9. This is the case with waste treatment, where the  systems envisaged may vary from mere supervised burial or  incineration, to methods of pyrolysis or gasification,  where the sewers may carry treated or non-treated water  indifferently, or where  measures applying to protected  areas may include the 'building of hotels or other tourist  facilities' without any further clarification of what that  is supposed to mean.  3.10. A considerable amount of money has been dedicated  to the construction of underground railways. For the  Athens metro, all the aid provided (178 Mio ECU) was seen  as relating to environmental protection, rather than the  development of transport,  because the investment is  supposed to help limit the increase in road traffic and  air pollution and therefore have a positive effect on the  environment. However, given that numerous towns that  already possess underground railways are still suffering   from pollution caused by car noise, congestion, parking  and exhaust gases, this effect is bound to be limited if  it is not included in the context of a general urban  traffic policy. In fact, the programmes examined do not  entail a genuinely global  approach of this kind. The  Court's inspection of a technical control centre for cars,  for example, revealed that, despite the fact that a  considerable number of vehicles did not comply with combustion standards, there was no precise record of the   vehicles in the area to be checked, and the checks  envisaged every two years were still not very systematic.  3.11. The risk of conflicting effects also exists at  other levels. Although the damage caused to coastal areas  by the urbanization process is generally stressed, the  operational programme for a region in the south of Italy  provided for the  construction of medium-sized and large  hotels up to a capacity of 1 000 beds around a bay which  is considered to have great tourist potential. The  initiative in question aims to bring the area's hotel  capacity up to the level of other, better  equipped, areas.  3.12. Conversely, many programmes emphasise the negative  consequences of internal areas being abandoned, especially  in terms of the conservation of the natural environment.  Nevertheless, few measures are planned for these areas,  despite the fact  that they are among the most seriously  affected by problems of regional imbalance. Similarly,  there are few measures concerning energy saving or the use  of renewable or alternative sources of energy, whereas,  given the difficult experiences of the  non-quota energy  programmes and the VALOREN(17)  programme, this field  deserves to be developed further. Furthermore, the part  reserved for education in environmental matters is still  very limited.  The link between investments and environmental protection 3.13. Despite greater public awareness of environmental  problems and a declared interest in them, the link between  investments and the need to contribute to the protection  of the natural environment remains weak as regards both  procedures and the  content of programmes. There is a real  risk that the implementation of the latter may directly or  indirectly contribute to an increase in environmental damage, and, at least in part, become the source of new  problems which will require difficult and  costly  intervention measures.  3.14. The regional authorities concerned tend to stress  the need for projects or investments aimed at reducing  pollution rather than for global approaches which also aim  at ensuring that the measures in question are not carried  out in such a way as  to contribute to the destruction of  the environment or increase pollution. The separation of  responsibilities observed in certain cases, between the  more environmentally oriented departments responsible for  the running of the ENVIREG programme and  those, like the  public works departments, which are responsible for  running other infrastructure programmes, is certainly not  an example of a global approach. Separating  responsibilities in this way has made it possible for  environmental  departments to strengthen their hold on  certain investments, but it also encourages the idea that  environmental considerations only concern some of the  programmes.  3.15. Actual operating or running conditions may be such  that the implementation of investments does not  necessarily guarantee the desired effect in terms of the  protection of the environment. Numerous water purification  stations have been built in  rural villages and towns,  often with aid from the Structural Funds. In actual fact,  in various regions the bulk of these stations are not used  because the local authorities have insufficient funds to  guarantee their upkeep and pay their running  costs.  Equipment able to supply several villages would probably  have been a more appropriate solution.  3.16. In order to gain information on the quality of the  air in industrial areas, a region in the south of Italy  has developed a network of about thirty monitoring stations to follow the evolution of a certain number of  components of the atmosphere.  The operational programme  financed by the Structural Funds includes plans to extend  this network to urban areas. However, even though this  equipment gives information on a real-time basis, it is  intended only for use as a planning aid and not for  the  more immediate functions of protection or intervention,  because these aspects are not the responsibility of the  department running the system.  3.17. Checks were made at a Business Innovation Centre  (B.I.C.) which had been appointed by the Commission and  the region concerned to manage various types of aid on  behalf of small and medium-sized enterprises by means of  an operational programme.  These checks showed that  environmental matters were only tackled in relations  between the Centre and the recipient companies if the  latter specifically asked for them to be considered. The  network of BICs could be made more aware of the   environmental implications of the measures they finance  and of the fight against environmental nuisances.  3.18. Even where specific measures are provided for in  the investment, they are not always carried out. For  example, the Community aid file for the construction of a  dam on the river Aoos in Epirus was closed in 1991  although the planting of 30  000-odd trees, which had been  provided for after a study of the impact of the projects,  had not been carried out.  3.19. A general clause in the contracts for global loans  granted by the Commission in the context of the activities  of the ECSC requires that projects financed by these  global loans should respect national and Community  provisions on environmental  matters and that checks should  be made on compliance(18) . The checks carried out by the  Court in several countries showed that the clause had rarely been applied and was not reflected in the contracts  for the financing of the projects. The financial  intermediaries consulted pointed out that they had not   noticed the existence of such a clause and they raised the  question of the cost of checks of this sort. In other  cases, it was their opinion that the relevant laws were  sufficient, which is tantamount to depriving the  contractual clause of any  significance.  3.20. There is not, therefore, in the measures receiving  aid from the Structural Funds, any very clear link between  the investments financed and the protection of the  environment. In those cases where measures of this sort  are actually adopted,  there is little follow-up and their  real impact is hardly monitored. Moreover, preventative or  dissuasive measures are virtually nonexistent in the  management of the Funds and practically nothing is done to  obtain more accurate knowledge of the  environmental cost  of the measures being financed and take it into  consideration. As for the reports on on-the-spot  inspections forwarded to the Court, these only very rarely  tackle the problems involved in the fight against  environmental  nuisances.  The risks of a negative impact on the environment of other  investment projects 3.21. The Court's examination of operations carried out  with aid from the Community Structural Funds shows that  considerable progress is still necessary to prevent the  projects being financed from contributing to the  deterioration of the  environment, or, at the very least,  from resulting in negative effects of some significance.  The cases noted by the Court and outlined below mostly  concern investments decided under previous legislation.  Since then, however, few changes have been  made in  management conditions and the nature of the interventions in order to take environmental aspects more closely into  consideration, and it is to be feared that the same  findings will be repeated in the future.  3.22. Work carried out on the port of Salonica, which was  financed within the framework of the IMPs, consisted of  deepening one of the docks and draining the surrounding  area. By the time work was due to start, for lack of any  preliminary studies,  carried out in good time, no decision  had been taken as to what should be done with the  3-4 million cubic metres of polluted mud which would be  produced by the excavations, and the intention was to pour  it into the bay, thus contributing to the  destruction of  the already badly damaged flora and fauna.  3.23. Still in Salonica, the same programme financed the  installation of special filters intended to reduce noise  and the emission of dust into the air at a steel factory.  The project was completed as planned, but the dust  collected was stored on  company premises and then spread  out in layers over the surrounding land.  3.24. In Saxony-Anhalt, the audit covered two projects  concerning, respectively, the improvement of an industrial  site and the construction of a plant for the handling and  destruction of worn concrete railway sleepers. The former  project provided  that aid would be granted on condition  that a solution was found for the treatment of the waste  water that would be produced. Nevertheless, the aid was  paid out without this point being taken into account and  without any particular obligation being  stipulated  concerning it.  3.25. As for the railway sleepers, there had been no  particular examination of the environmental side of the  question before aid was granted, but the project  description provided for a device for discharging special waste. On the occasion of our  on-the-spot audit visit, it  was confirmed that the plant had been sited in a drinking  water protection area and that there was a risk that the  residues of the chemical substances poured over the  sleepers to eliminate vegetation might penetrate into  the  soil, particularly as a result of the effect of rainfall.  There was, however, no trace of any device for discharging  special waste or separating out oily residues. Despite the  installation of filters, the noise and dust were  considerable.  3.26. Two agricultural holdings visited in North Brabant  (Netherlands) received investment aid intended for  environmental protection, and, more specifically, the  construction of modern sheds for housing livestock  equipped with a system permitting  the storage of dung for  six months. Only two weeks' storage was possible in the  old sheds and new regulations in the Netherlands forbid  dung from being spread over the fields. The first project  was actually a replacement investment and requires no   comment. The second, on the other hand, must quite clearly  be seen in terms of a development of the holding, an  increase in the number of animals and thus of the  production of dung, a fact which should have prevented aid  from being granted in the  context of environmental  protection. 3.27. In the case of a mining project in Spain, the aid  application declared that the investment would be 'without  negative effects', when, in fact, it involved the  deforestation of a vast wooded area and the pollution of  significant quantities of  water. A decision of the Region  in question, taken in 1986, obliged the company to plant  new forests, but, in 1989, the last year covered by the  report, this had not yet been done. Rather than being  treated, the waste water is stored in two  artificial  reservoirs, and no provision has been made for the disposal of the sediments. The quarterly declarations  forwarded by the company to the regional authorities  mention very small quantities of toxic substances in the  waste water. These  declarations are contradicted by  analyses of samples taken by the company itself before and  after the passage of the water through the mine, which  show that the amount of toxic substances in the water  leaving the mine is twice that upon entry.  3.28. Problems of polluted water were also found in a  mining project which has been financed in the United  Kingdom by the ECSC and which did not yet include a  purification plant. In order to avoid contamination of  surface water, the company  endeavoured to store the  polluted water in old disused coal seams, thus creating a  risk of groundwater contamination.   CHAPTER 4  The protection of the quality of the environment Inspections at a number of local monitoring units 4.1. During its audit visits in various regions of the  Member States, the Court was able to contact local  authorities responsible for controlling waste and  effluents and generally ensuring compliance with the  established limits and permitted levels  of environmental  nuisances. In some Member States, specialized  environmental inspection services have been created,  particularly for certain specific tasks like the  protection of rivers or conservation areas. Generally  speaking, however, pollution  control is entrusted to the  departments responsible for hygiene and health. These  departments often have other, higher-priority tasks, such  as the organization of health care, and have not been  adapted to cope with the complexity and specificity of  the tasks they are required to perform in the field of the  environment. As for 'environmental audits' (the  certification by an independent expert that the activity  of the company being examined complies with the  environmental rules in force), they  are very much the  exception.  4.2. In some local monitoring units visited by the Court  in the south of Italy, checks were essentially organized  in response to specific requests, or as the result of the  interest shown by local public opinion. Practically no  verifications were  carried out with regard to air quality.  As regards water quality, periodical checks of effluents  were in the process of being organized. However, the  checks in question only related to known outlets, a list  of which had been drawn up on the basis of  declarations  received during the last few years. No more complete list  was available and no research had been carried out  concerning unauthorized outlets. There was not even any  organized supervision of companies specialized in the collection and  transport of polluted liquids, with the  risk that some of the liquid being transported might  illegally be poured away into the public drains.  4.3. An Italian law passed in 1988 provides for the  creation of an inventory of industrial dumps and waste,  and, pursuant to this law, those concerned are required  every year to declare the waste that they produce. In one  region visited by the  Court, the number of declarations  received was estimated at less than 10 % of the number that  should have been presented. Some of the people concerned  were not aware of this obligation or had an insufficient  knowledge of their waste products, while  others preferred  not to make themselves known. The authorities tolerate  this situation because it would be difficult for them to  investigate a larger number of declarations, and, above  all, because they would be incapable of dealing with all the  waste if the latter were actually declared. Available  facilities for disposal (usually by incineration) are  estimated at around 25 % of the necessary capacity and  there are difficulties in creating new plants, not because  of a shortage of money but,  given that each choice of a  new disposal site is systematically contested, because of  location problems. The region does not possess a  specialized centre for hospital waste, the volume of which  is estimated at just over 30 000 tonnes per year.  4.4. Council Directive No 85/337/EEC of 27 June 1985,  concerning the evaluation of the effect of certain public  and private projects on the environment(19) , has given  rise to numerous complaints, questions raised in  Parliament and Court cases for non-application or  incorrect application, including the fact that  environmental impact assessments are often carried out by  the developer himself and not by  an independent body. The  Directive, which should have been incorporated into  national law by 3 July 1988, contains, in its first Annex,  a list, with a few exceptions, of the types of investment  which must be submitted to an environmental impact   assessment and specifies measures for informing the public  and consulting interested parties. Annex II specifies the  types of investment for which assessment is left to the  discretion of the Member States.  4.5. This Directive has been applied in a very  restrictive way. In several Member States, only the first  annex has been incorporated into national law.  Furthermore, it was held that the Directive was not  applicable to projects that had already been  approved up  until the moment the national law provisions for its  application were adopted, even in the case of large  infrastructure projects, such as dams or railways, which  are liable to have a significant effect on the  environment. Furthermore,  application of the Directive is often limited to new investments, thus excluding  restructuring operations, even if, for example, the  widening of a road in a residential area or the  transformation of the same road into a faster one may lead  to a  veritable disaster.  Prevention and the 'polluter pays' principle 4.6. Slow progress is being made in the implementation of  environmental Directives and many areas are left  uncovered. Under these conditions, it is doubtful whether  the Directives will be able, on their own, to induce a  significant change in  environmental behaviour. Although  people are now genuinely aware of environmental questions  and the urgency of such measures is widely recognized,  concrete changes in the situation are less noticeable.  There is, therefore, a risk of an increase in  the  discrepancy between those measures that the protection of  the human and natural environments requires and those that  are actually applied. At the current rate, even if  considerable effort is made, it may still take several  generations for the  Directives to be implemented.  4.7. The situation can only be improved through important  accompanying measures that give real significance to  incentive and dissuasive factors. A Council recommendation  of 3 March 1975(20) , concerning cost allocation and the  intervention of the public authorities in environmental  questions, clearly lays down that 'charging to polluters  the costs of action taken to combat the pollution which  they cause encourages them to reduce the  pollution and to  endeavour to find less polluting products or technologies,  thereby enabling a more rational use to be made of the  resources of the environment. Moreover, it satisfies the  criteria of effectiveness and equitable practice.' 4.8. Few measures have been adopted to achieve this end  and, furthermore, techniques need to be improved to enable  potential polluters to gain a better knowledge of and put  a figure on the environmental costs of the activities they  contemplate and  ensure that these factors are taken into  consideration. If they are not taken into account, the  operations and investments concerned - even those in  receipt of Community aid - may become a source of future  costs for their beneficiaries and mean that  they have to  finance new measures to correct the negative effects of   previous or even concomitant ones.  The application of the environmental Directives 4.9. There have been considerable delays and other  difficulties in the incorporation of environmental  Directives into national law. Some Member States have  failed to supply the required information and documents.  In many cases, Directives have not  been incorporated into  national law within the required deadlines and in others  it has been done incompletely or badly. At Local Authority  level, implementation calls for enquiries, examinations  and specialized technical procedures which the  authorities  concerned do not always have the necessary knowledge to  carry out in an appropriate manner. The division of  responsibilities increases the number of legal documents  that need to be adopted and the risk of differences in  conception or  interpretation.  4.10. The Directives leave the Commission very little  scope for action with regard to the difficulties faced by  the Member States in applying them. About a hundred cases  have been referred to the Court of Justice of the  Communities, which, in  numerous judgments, has declared  that the Member States concerned, by not supplying the  information requested or by not taking the necessary steps  to implement the Directives within the relevant deadlines, have failed to fulfil their Treaty  obligations. However,  rulings of this sort do not necessarily result in a faster  or more complete application of the Directive in question,  and there are cases of the same type of infringement  leading to more than one judgment in succession.  4.11. Excluding modifications and adaptations, the  Council has adopted a total of about 90 Directives that  are necessary, amongst other things, for an appreciation  of the evolution of techniques and environmental  nuisances. Despite the considerable  number of texts, all  sources of pollution are far from being covered. For  example, in support of Council Directive (EEC) No 76/464  of 4 May 1976, on the discharge of certain substances into  the aquatic environment(21) , a Council Resolution took  note of a list drawn up by the Commission of approximately  130 priority substances, the discharging of which requires  prior authorization from the competent authorities of the  Member States, in compliance with certain  limits to be  established by the Council. Of these 130 substances,  21 are considered by the Commission to have maximum  priority. In 1991, or more than 15 years after the  Directive had been adopted, limits had been established  for 17 substances out  of 130, of which 12 were among the  21 high priority cases. For the other substances, rather  than submitting further proposals for limits to the  Council, the Commission in February 1990 presented one for  an amendment to the Directive (which has been  in suspense  ever since), with the aim of replacing unanimous voting  for the establishment of limits and quality objectives  with the qualified majority system.  4.12. On account, among other things, of the size of the  departments and the allocation of work within DG XI, the  application and monitoring of the Directives remains  indisputably very slow and inadequate. There is,  therefore, a need for a better  organized approach that incorporates, to a greater extent, some of the other means  of action at the Commission's disposal, particularly as  regards structural operations and the 'polluter pays'  principle. The adoption of Directives is indispensable  for  the establishment of a legal reference framework and for  the definition of standards and procedures in the  environmental field. However, it is relatively vain to  draw up laws that remain largely unapplied, and there is a  need for a better  balance between the two aspects of  drafting directives and monitoring their application.  4.13. Both at the Commission and in the Member States,  certain Directives that have a direct and significant  impact in terms of the protection of the environment are  managed exclusively from the point of view of the  harmonization of national  legislation on production  conditions in specific sectors of industry, and hence in  terms of the contribution to the completion of the  internal market. This is particularly the case with regard  to certain types of noise pollution and, for example,   Council Directive No 78/1015/EEC of  23 November 1978(22) , on the permissible sound level and  exhaust system of motorcycles - both factors whose impact  on the environment is however self-evident. During an  inspection carried out at DG III of the Commission, which  is responsible for the management of this  Directive, the  Court was able to obtain neither a progress report nor an  assessment of the results achieved. In the Member States,  the Departments responsible for authorizing the use of  motorcycles on the roads or making technical checks have   jurisdiction in this field, and it is generally possible  to find spare parts, freely available on the market, whose  acoustic characteristics do not take into account the  limits provided in the Directive. In an analogous field,  it is worth noting  that, for Council Directive  No 84/538/EEC of 17 September 1984, on the permissible  noise level for lawn mowers, it is DG XI that is responsible, without the criteria governing this division  of functions being clearly spelled out. As for the   Directives on the use of pesticides and 'organic'  agriculture, these are managed by the 'Agriculture  DG'(23) .   CONCLUSIONS AND RECOMMENDATIONS  5.1. Community action in the field of the environment has  developed considerably in recent years and its influence  is felt in nearly all aspects of the fight against  pollution and for the defence of natural resources. This  activity, which was  introduced by the Single European Act  of 1986, was developed and reinforced by the 1992 Treaty  of Maastricht.  5.2. The environmental Directives constitute the main  instrument of preventative Community action for the  protection of the natural environment and their role is  fundamental. However, they are being implemented slowly  and there is a significant gap  between the set of rules in  force and their actual application. Meanwhile, the  situation may deteriorate and the progress that has been  made in certain sectors may be undermined by the growing  deterioration observed in others.  5.3. Despite an appreciable level of activity in this  field, it is doubtful, given the current speed at which  the environmental Directives are being applied, that they  will be sufficient to produce significant changes in  behaviour in environmental  matters. It is therefore  essential that they be backed up by other incentives to  reduce pollution and that the other means of action  available be allowed to contribute more towards achieving  the goals expected of the Directives, and, above all, it   is vital that these means should not work in the opposite  direction.  5.4. The objectives of the Structural Funds should be  pursued and achieved in compliance with Community  environment policy. This is not only a legal obligation,  but also a sound management requirement, if financial  measures are not to be a further  source of difficulties  and expense which will be a burden on the future  development of the populations concerned. From this point  of view, a great deal of progress needs to be made towards  eliminating conflicting effects and achieving concrete   results in terms of the limitation of environmental  nuisances. Too great a proportion of Community aid goes  towards investments that are little more than cleaning  operations, whereas preventative measures aimed at the  sources of pollution appear  infrequently in the programmes  and projects financed by the Community. However, if  precedence is not given to the preventative side, the  effect of interventions of a curative nature will not be  lasting. An analogous concern should govern the  activities  of the new instruments that are due to be created, and in  particular the cohesion Fund.  5.5. DG XI will have to take on a more pronounced  coordination role if it is to avoid dispersion of  interventions and ensure that different measures  complement each other more and are therefore more  effective. Multiannual programmes should establish   concrete and quantifiable objectives to be attained and  indicate, in a precise way, the means that are needed to  achieve them.  5.6. For projects financed by environmental  appropriations, greater rigour is needed in defining and  choosing what work is to be done. This also applies to  awarding contracts, for which the invitation to tender  procedures should be strictly applied.  Financial follow-up  to contracts should be significantly improved and the  results of the work carried out systematically exploited. The repeated financing of activities that produce few  concrete results should be more carefully avoided.  Follow-up to  operations in receipt of aid and the  assessment of their actual impact are essential  operational aspects of intervention and, in particular,  the use of intermediary firms to carry out these tasks  does not seem to be justified.  5.7. The financial volume of Community activities is not  completely and precisely determined, and better  information is needed regarding it. This makes it  difficult to coordinate measures developed in different  sectors and gain an overview of  management results. In  particular, there is a complete lack of any documentation  on the various aspects of financial activity in the field  of the environment that aims to provide a global approach  to the subject.  5.8. Insofar as the policy of prevention and correction  at source is inadequate, more precise knowledge and  greater awareness of the environmental cost of activities  must be arrived at. This is the basic condition for  greater effectiveness in the  protection of the natural  environment and, here too, considerable progress remains  to be made. Environmental costs cannot be systematically  borne by the Community as a whole, but must be more the  responsibility of the activity that causes them. A  larger  proportion of Community aid should be directed towards the  implementation of the 'polluter pays' principle, which is  clearly stated in the relevant legal texts but which can  have no dissuasive, or even educational, effect if it is  not  transformed into reality.  This report was adopted by the Court of Auditors in  Luxembourg at the Court meeting of 18 June 1992.   For the Court of Auditors Aldo Angioi President     Table 3 - Appropriations under the environment title of the budget and the utilization of them (1)   (ECU)        Commitments   Payments    Budget heading Final appropriations available Contracted during the year % Final appropriations available Payments effected %   1986 ACE 6610+6611  6 704 769 5 745 923 85,7 3 450 000 1 031 966 29,9   CORINE 6603+6614  3 213 500 2 999 581 93,3 1 200 000 990 937 82,6   MEDSPA 665+6615+6616 (2)  1 580 000 1 224 797 77,5 1 630 000 727 505 44,6Other Various  19 401 194 14 406 538 74,3 15 470 325 11 241 643 72,7       30 899 463 24 376 839 78,9 21 750 325 13 992 051 64,3   1987 ACE 6610+6611  3 710 168 3 602 568 97,1 5 820 108 3 906 449 67,1   CORINE 6603+6614  1 416 483 1 411 487 99,7 1 523 300 1 273 300 83,6   MEDSPA 665+6615+6616 (2)  1 885 450 1 822 152 96,6 1 285 450 535 629 41,7   Other Various  31 269 715 29 268 850 93,6 23 038 150 16 773 439 72,8       38 281 816 36 105 057 94,3 31 667 008 22 488 817 71,0   1988 ACE 6600  5 168 196 5 159 286 99,8 3 100 000 2 824 765 91,1   CORINE 6601  2 000 000 1 998 570 99,9 1 200 000 1 115 825 93,0   MEDSPA 6610 (2)  3 431 438 3 390 522 98,8 2 600 000 1 019 298 39,2   Other Various  26 246 271 25 351 752 96,6 28 320 000 18 314 555 64,7       36 845 905 35 900 130 97,4 35 220 000 23 274 443 66,1   1989 ACE 6600  7 800 000 7 796 779 100,0 5 800 400 4 980 370 85,9   CORINE 6601  3 740 000 3 727 735 99,7 3 240 000 2 425 695 74,9   MEDSPA 6610  6 922 000 6 896 527 99,6 4 342 000 3 559 692 82,0   Other Various  25 523 000 24 501 613 96,0 23 628 000 17 711 852 75,0       43 985 000 42 922 654 97,6 37 010 400 28 677 609 77,5   1990 ACE 6600  10 000 000 9 999 983 100,0 7 450 000 6 534 737 87,7   CORINE 6601  2 800 000 2 715 113 97,0 3 500 000 2 390 417 68,3   MEDSPA 665  9 000 000 8 843 775 98,3 4 107 000 2 073 345 50,5   Other Various  30 180 000 29 021 450 96,2 33 212 000 24 978 125 75,2       51 980 000 50 580 321 97,3 48 269 000 35 976 624 74,5   1991 ACE B4-300+B8-430  408 000 406 762 99,7 2 727 000 1 682 820 61,7   ACNAT B4-301+B8-431  27 026 000 13 940 610 51,6 10 676 000 7 570 515 70,9   CORINE B4-3101  5 000 000 2 713 876 54,3 3 500 000 2 348 461 67,1   MEDSPA B4-302+B8-432  24 442 000 24 207 283 99,0 11 001 000 5 541 074 50,4   LIFE B4-320  1 000 000 996 347 99,6 1 000 000 996 347 99,6   Other Various (Ch. B4-3)  25 627 000 16 305 358 63,6 19 993 000 11 161 100 55,8       83 503 000 58 570 236 70,1 48 897 000 29 300 317 59,9   TOTAL  ACE  33 791 133 32 711 301 96,8 28 347 508 20 961 107 73,9    ACNAT  27 026 000 13 940 610 51,6 10 676 000 7 570 515 70,9    CORINE  18 169 983 15 566 362 85,7 14 163 300 10 544 635 74,5    MEDSPA  47 260 888 46 385 056 98,2 24 965 450 13 456 543 53,9    LIFE  1 000 000 996 347 99,6 1 000 000 996 347 99,6    Other  158 247 180 138 855 561 87,8 143 661 475 100 180 714 69,7       285 495 184 248 455 237 87,0 222 813 733 153 709 861 69,0  (1) Including amounts for support expenditure.  (2) Includes expenditure other than MEDSPA projects.    COMMISSION'S REPLY   INTRODUCTION  The Court's Special Report on the Environment comes at an appropriate moment in the development of Community environment policy and draws attention to a number of issues which the Commission has already addressed in preparing its Fifth Action Programme  on the Environment which was agreed on 18 March 1992. The Community has had an environment policy for almost twenty years despite the fact that the environment was not mentioned in the Treaties until the 1986 Single European Act. The four previous  Action Pogrammes have resulted in significant advances in terms of an extensive legislative framework (over  200 pieces of legislation) and actual improvements in environmental protection and quality. The Fourth Action Programme is not yet completed -  it runs to the end of 1992 - and its impact will not be visible for some years to come. It is clear, however, that environment policy is at a turning point and is an issue which is playing an increasingly important role in the Community. This was  recognized by the Heads of State and Government in their declaration on 'The Environmental Imperative' at the Dublin summit in 1990.  This importance was given extra weight by the new Treaty on European Union signed by the Member States on 7 February 1992 which has introduced into the basic Community Treaty another principal objective: to promote sustainable growth respecting the  environment. The new Treaty goes on to include among the activities of the Union a policy in the sphere of the environment and specifies that this policy must aim at a high level of protection and that environmental requirements must be integrated into  the definition and implementation of other Community policies. This implies that increasingly environmental considerations will become an integral part of other sectoral policies both at the Community level and within the Member States.  The Fifth Action Programme, which is currently under consideration by the Council and which will be the vehicle by which these changes are given effect, is not a framework for the Commission alone; it is aimed at all the players involved with the  environment in the Community; it reflects the importance the Commission attaches to the changing nature of environment policy. It focuses on agents and activities which damage the environment and deplete the natural resource stock rather than wait for  problems to emerge. The objectives cannot be met by action at Community level alone but rather on the basis of a coordinated response involving a sharing of responsibility by all levels of society. The basic strategy of the Programme is to set a series  of long-term objectives and targets through which full integration of environment and other relevant policies can be achieved by means of the active participation of all the main actors in society (administrations, enterprises and general public) and a  broadening and deepening of the instruments of coordination and control. This is in line with the recommendations and conclusions of the Court.  Within the Commission itself this will require greater coordination between the various departments and much greater awareness of environmental considerations at all stages of policy-making. This will be particularly true of the increased funding which  is envisaged for environmental purposes. To this end the recommendations of the Court on the issues as they presently stand will be an important input into the development of the Commission's approach in the future, in particular in the context of the  assessment of the Structural Funds and of the new Cohesion Fund.  However, it must be added that the Commission considers that great efforts have already been made to ensure that the aid granted under its structural policies takes fuller account of the environment. For example, under the Community Support Frameworks  for objectives 1, 2 and 5b of the reform of the Structural Funds approximately ECU 3 000 million has been granted to a variety of environmental protection schemes. In addition, various action in this field has been provided for under a number of  Community programmes, particularly the ENVIREG programme to which the Community has contributed ECU 500 million.  The Commission would also draw attention to the important role the Member States have in implementing environment policy. In the Fifth Action Programme the principle of subsidiarity will play an important part in ensuring that the objectives, targets  and actions are given full effect by appropriate national measures. These can only be achieved by concerted action by the Commission and the Member States working in partnership. Such a partnership also requires increased cooperation between the  Commission and the Member States in the areas of control of the implementation of environmental measures. Equally, the creation of the European Environment Agency and its information networks will meet a growing need for more and improved scientific  environmental data on a comparable basis at the Community level and beyond to improve decision-making.   CHAPTER 1  The objectives of Community action relating to the environment and the resources available Itemization of expenditure 1.3. The review contains the aggregate totals for all spending on environmental measures under the various budget headings. These were calculated by the Directorates-General responsible for authorizing expenditure under the individual headings. Each DG  concerned sent DG XI a memorandum containing the results of its evaluation.  1.4. The Court's analysis quantifying the environment-related contributions contained in the Structural Funds' Community Support Frameworks agrees grosso modo with the Commission's estimates. The biggest difference in the figures concerns the Community  Support Framework for Portugal, where environmental measures are not placed together as a separate priority but are scattered between the different regional programmes. Between 1989 and 1993 the Community contributed an estimated ECU 168 million to the  environmental protection measures under these various regional programmes.  It is clear from these figures that the financing from the Structural Funds plays an extremely important tangible role in environment policy.  1.6. The Commission agrees that more effort is required to arrive at the kind of transparency the Court suggests. One of the problems the Commission and the Member States face is that there is no system of indicators in relation to expenditure linked to  the environment. As far as national statistics are concerned, the collection of environmental statistics has not been seen as an important priority by the Member States. At the Community level the Statistical Office and the Commission departments have  been working for two years to develop a system which will specify environmental expenditure within the Community and the Member States more clearly. Similar work is being carried out by the OECD in which the Commission is fully involved.  The Action Programmes for the Environment 1.8. The Commission notes the Court's observation on the translation of the Action Programmes into operational terms. It points out, however, that the first Action Programmes had as their objectives to increase awareness of environmental concerns and to  provide the general principles guiding environmental protection activities. The later Action Programme sought to target quality criteria (e.g. water quality and emission controls) and to ensure full implementation and enforcement of Community  legislation. Whilst the Fourth Action Programme had emphasized the need to integrate environmental concerns into other policy areas and had called for a widening of the range of instruments used to implement environment policy, in the Fifth Action  Programme adopted on 18 March 1992 the Commission recognized that the time had now arrived to set targets, establish the means of achieving them and fix priorities. The Fifth Action Programme will be an operational document which sets long-term  objectives, defines performance targets and lays down the action and timetables required to attain these targets. This will be done in relation to key target areas, e.g. industry, agriculture, energy, transport and tourism, and will take account of the  progress towards the single market. Furthermore, the Commission itself has detailed management plans at both the Commission and DG level which seek to plan, prioritize and resource environmental activities.  1.9. In the future the Commission will put the emphasis on stepping up monitoring and evaluation of the real impact of the environment programmes and measures, particularly by setting objectives and defining environmental impact indicators. This will  considerably help the Commission to set priorities for support and, hence, make a more effective contribution to implementation of the environment policy.  The coordination of intervention and the coordinator's role 1.10. The Commission accepts the need for closer coordination of its approach to the environment and the Fifth Action Programme will provide the basis for ensuring that this is achieved. Environment issues are not the responsibility of the  Directorate-General  for Environment alone and even more DGs can be added to the list enumerated by the Court, for example DG I, DG II, DG VII, DG XXII and DG XXIII are all involved and some of them also administer credits which relate to the  environment.  In these circumstances a coordination process which involves nearly every department of the Commission is a complex issue. Difficulties can only be resolved by changes of attitude and changes of approach but, as the Fifth Action Programme points out, it  inevitably takes time for attitudes and behaviour to change.  1.11. The Commission accepts that in certain cases interdepartmental coordination, consultation and participation on environmental issues can be improved as has been done already for example in relation to EIB and ECSC loans. This will involve the  allocation of additional resources to ensure that this is achieved.  In the specific case of the Structural Funds, the Commission considers that the problem is not so much interdepartmental coordination but stems more from the general application of the programme financing approach, in that the operational programmes  which provide the basis for granting aid from the Structural Funds contain no details of individual projects. Consequently, when the time comes to grant aid the environmental impact must in turn inevitably be assessed on a more general basis.  1.12. It was decided over five years ago to adopt programme financing for the IMPs. Coordination between DG XI and DG XIV to ensure that aquaculture projects comply with the environmental standards has been excellent: following the adoption by the  Commission of the 'Internal instructions concerning the assessment of the impact on the environment of plans, programmes and projects' funded by the Community on 8 December 1988 the two DGs jointly drafted an environment questionnaire which must be  attached to all applications for Community support for an aquaculture project. DG XIV regularly forwards these questionnaires to DG XI which examines them thoroughly before any funding is granted.  As regards the relationship between aquaculture and the environment, although DG XI is working on a programme to conserve wetlands this by no means precludes environmentally sustainable economic development.  Also the broad range of functions played by wetlands combined with their natural and socio-economic value calls for a specific integrated management system. On this basis, traditional fishing and aquaculture can thus be authorized in wetlands.  1.13. The measures on the protection of forests against atmospheric pollution [Regulation (EEC) No 3528/86] and against fire [Regulation (EEC) No 3529/86] are managed by the 'Specific measures in rural areas (forestry development, environmental  protection, etc.)' unit in DG VI, which is responsible for the Community's forestry policy. Both these measures are an integral part of the Community Action Programme for the Forestry sector adopted in June 1989.  To protect forests against atmospheric pollution, the monitoring system provided for by the Regulation has been set up and DG VI has written various reports, all in close collaboration with DG XI (CORINE).  As regards protection against fire, Regulation (EEC) No 3529/86 is limited to measures to prevent fires and monitor forests.  There are no other Community measures which overlap with these arrangements as the action supported by DG XI in this field is concerned solely with measures to combat these problems proper.  Coordination between the two Directorates-General in this field is ensured by the Standing Forestry Committee, which is administered by DG VI and on which DG XI is regularly represented.  Official consultations between DG VI and DG XII are held during the appraisal procedure for research projects.  Similarly, coordination between the various units of DG VI concerned with forest protection and improvement schemes funded under the reform of the Strcutural Funds is ensured by means of systematic consultation during the appraisal procedure for the  operational programmes.  1.14. As regards DG XI's role as coordinator of Community funding for environmental measures, the Commission has already established appropriate internal procedures for funding from the Structural Funds. DG XI is consulted on the measures proposed by  the Member States for part-funding by the Community and participates in the meetings of the Committees responsible for monitoring measures with a significant environmental impact (see also the reply to point 1.11).  1.15. The Commission also considers that there is a need for improved coordination within Member States on environmentally related issues which are constantly changing.  These issues were examined at a meeting of the Directors-General for the Environment convened by the Commission and the Portuguese Presidency in June 1992. Moreover, in the framework of the Fifth Action Programme, there are plans to create an  Environmental Policy Review Group comprising representatives of the Commission and the Member States at Director-General level to develop mutual understanding and to exchange views on environment policy and measures. There are also plans to create a  network comprising representatives of the relevant national authorities and the Commission to ensure pactical implementation of Community measures.  Consideration of environmental impact in Structural Fund initiatives 1.16. The Commission recognizes that general application of 'programme financing' by the Structural Funds marks a big change from the previous method of project funding and that it can only be achieved gradually, with imperfections here and there. A  certain learning curve was necessary, not least for assessment of the environmental impact at the various stages of planning, on the part of the Commission departments concerned and also of the national and regional authorities responsible in the Member  States.  Nevertheless, centralization of all environmental assessments and inspections within the Commission departments would be contrary to the spirit of the Community's structural policies and, moreover, technically impossible. The Commission considers that  in the future the Member States should be encouraged to involve their environmental authorities more closely at each stage of definition and implementation of funding from the Structural Funds.  First, they must ensure that these authorities are adequately equipped for this task. Consequently, participation in the supervisory committees by the Commission departments concerned could be limited to a few areas which take priority from the  environmental point of view and to inspections in selected fields corresponding to the Community's top environmental priorities or to particularly sensitive fields.  1.17 - 1.18. The Commission departments concerned have written guides to help the Member States to prepare their applications for support. These guides specify the details to be contained in each application for support under Article 7 of Regulation  (EEC) No 2052/88 and under Article 14 of Regulation (EEC) No 4253/88. In the case of large-scale projects, this takes the form of the environment questionnaire provided for in the 'internal instructions concerning the assessment of the impact on the  environment'. In the case of the operational programmes, details must be given of the arrangements made to monitor the environmental impact of the measures planned in each programme. The Commission departments concerned check the information given when  they appraise or implement the programmes.  Project financing and programme financing 1.19 - 1.21. The Commission is aware of the respective advantages and disadvantages of the programme financing and project financing approaches. It also realizes that the programme financing approach defined by the Council as the general method of  support from the Structural Funds since the 1988 reform offers fundamental advantages in the form of closer coordination between the different structural support and closer assessment of its economic impact. However, with the exception of the fisheries  programmes, which combine a package of projects, at the time that support is granted the Commission has only a general assessment of the impact on the environment prepared, in principle, by the competent authorities in the Member States. The Commission  plans to submit a proposal for a Directive requiring systematic assessment of the environmental impact of plans, policies or programmes as a whole.   CHAPTER TWO  The management of appropriations earmarked for the environment Environment appropriations and research appropriations 2.4. The Court has noted the significant growth in the environmental activities of the JRC and DG XII. The appropriations managed by the JRC and DG XII fall under the four-year framework programmes on research and technological development adopted by  the Council. The projects undertaken, either as direct action or as cost-sharing contracts, are primarily scientific in character, even though their main application is in the field of the environment. The appropriations managed by DG XI, by contrast,  stem from the budget itself. The objective of these appropriations is to finance actions which cover all environmental activities and, in particular, measures which have a bearing on policy formulation and implementation.  There is close coordination of the planning and implementation of the research projects and activities undertaken by the Commission. However, following the Court's remarks, the Commission will seek to ensure that evidence of such coordination and the  follow-up of project results is better documented.  The selection procedure for the STEP and EPOCH programmes has been established for many years.  2.5. The Commission accepts that there is scope for improving coordination in this area and has emphasized this in the Fifth Action Programme. It would point out, however, that for some time all research programmes have been submitted to DG XI for  examination before a decision is taken.  This process of consultation allows DG XI not only to modify the direction of the programmes but also to determine which type of projects it would like to stimulate further by adding the weight of its own financial appropriations to the resources  allocated by DG XII and the JRC. In general, the resulting collaoration extends to the definition of and participation in projects. In the implementation of the projects there are direct links between the units in DG XI responsible for policy and the  units in DG XII responsible for scientific support and in particular the STEP, EPOCH, MAST, ECLAIR and THERMIE programmes.  For example, in the case of climate change, given the complexity of the issue and its wide policy and technical implications and the necessity for extensive basic research, a number of DGs were involved in pooling their resources and studying different  aspects of the same problem.  Award and conclusion of contracts 2.6. Given the special and technical nature of the work and the comparative rarity of environmental specialists the Commission is generally aware of potential contractors. In the interest of administrative efficiency and economy, from time to time DG XI  resorts to a restricted call for tenders. However, for large programmes where a much wider range of potential contractors exists, the Court observes correctly that DG XI makes extensive use of the open call for tender procedures which involve  announcements in the Official Journal. It is foreseen that the existing large programmes such as MEDSPA, ACNAT and ACE will be incorporated into the financial instrument for the environment (LIFE). In this way selection procedures and criteria for  contractors will be harmonized further.  2.7. Further to the Court's remarks, DG XI has started to centralize its finance and contract functions and, in this context, will review the procedures related to subsidies and financial contributions (see also point 2.10).  Nevertheless it must be emphasized that, even at present, the financial contributions are made only on the strict conditions that the activity foreseen is indeed carried out, that where necessary the results are widely disseminated and that evidence of  expenditure on the activity undertaken is presented to the Commission.  2.8. The Committees concerned do examine cost questions and also give their opinions on the technical aspects of the cost/benefit of projects.  2.9. The Commission notes the Court's suggestions to institute fixed-price environmental contracts. It will need to consider this carefully given that a fixed-price system requires good pre-selection controls. These have to be balanced with the  requirements of political timetables and deadlines, a task which can be difficult.  Monitoring the financial aspects of contracts 2.10. Because of the decentralized approach adopted until recently, much of the information sought by the Court was spread over a number of operational files. The Commission was aware of this situation and has anticipated the Court's remarks by  commencing to centralize and strengthen the Finance and Contracts function within DG XI. The aim of this activity is to ensure more complete financial files, standardized procedures and an improvement in the administration and follow-up of projects and  programmes.  DG XI is in the process of creating an integrated financial data base which will allow it to make a better selection of contractors, keep closer track of the evolution and execution of the budget and provide in a convenient manner the information  necessary to monitor and evaluate programmes as well as individual contracts. The fundamentals of the computerized data base are scheduled to be in place and operational early in 1993.  2.11. The Commission relies on the 'general conditions applicable to contracts awarded by the Commission of the European Communities' to guide potential applicants. As regards the eligibility of allowable costs, as they vary from the general conditions  from one type of contract to another, is is left to the individual DGs to determine the cost allowed. In this context, DG XI will draft operational guidelines for potential contractors on the allowability of costs.  2.12. In the general information supplied in the course of the tendering procedure and at the time of concluing the contracts the Commission draws the contractors' attention to their obligation to comply with the Financial Regulation and the terms of  contract. This includes keeping accounts and the appropriate financial documents to allow verification of the costs related to the contracts.  If DG XI were to carry out detailed, exhaustive checks on the cost statements to ensure the allowability of all costs then considerable additional manpower would be required. With reference to the Court's example of a contractor lacking books, it would  be administratively inefficient and wasteful of scarce resources to check the underlying accounting records of each contractor simply to verify the cost statement received. The Commission accepts though that additional on-the-spot audits should be  carried out.  2.13. The Commission is aware of the delay in this project. On 22 January 1992 the project was extended for twelve months.  2.14. The Commission is aware of the problems which exist as a result of overdependence on external staff. Given the absence of permanent posts such external staff have been necessary to deal with a rapid expansion in environmental activities. The rapid  turnover of these staff has inevitably had an impact on the continuity of some files.  The grant of operational subsidies 2.16 - 2.17. The Commission is aware of the desirability of standardizing procedures for the award of subsidies. Since 1991, DG XI has established a clear procedure and transparent criteria applicable to all applicants. As and when necessary on-the-spot  inspections are to be conducted to ensure that the activity supported is indeed carried out and that the funds provided are used as intended.  Project results: the exploitation of results and the principle of preventive action 2.18 - 2.19. The Commission can only partially accept the Court's criticisms on the dissemination and use of project results. Most studies and demonstration projects are used for policy formulation, implementation or evaluation. When the activity is  completed the results are published for general dissemination if appropriate.  DG XI has already improved its planning procedures whereby the DG's annual plan is translated into projects and instruments of expenditure. Monitoring the financial and administrative aspects of this plan will allow the effectiveness of activities being  undertaken to be assessed. Operational units will be asked to indicate clearly the internal and external benefits of the contract results before the final payment request is approved. This information will ensure that the benefits of Community-funded  activities are not only real but also taken up.  2.20. The Court is correct to point out that Community activity must be based on the principles of prevention and the 'polluter pays'. However, to this the Court should have added the principle that environmental damage should as a priority be rectified  at source. The three principles are inextricably linked and it is difficult to separate activities on the basis of any single principle without including the others. In this context the Commission does not agree that application of the remedy-at-source  principle would diminish the 'polluter pays' or preventive principles.  2.21 - 2.22. The examples cited by the Court on financial support granted for the clean-up of waste to rehabilitate the Tremiti Islands or to combat the environmental degradation caused by tourism and agricultura fertilizers clearly illustrate the  application of remedial as well as preventive principles. It should also be pointed out that these activities fall well within the criteria established by the 1975 Council Recommendation on the allocation of costs, without infriging the polluter pays  principle.  At the same time the cases chosen by the Court demonstrate that these pilot projects have not only had an immediate beneficial impact on the natural and urban environment but also were used to demonstrate the techniques and logistics of environmental  protection activities. The purchase of the lagoon in the Venice region was for the protection of flora and fauna. This purchase satisfies the objective set out in the first indent of Article 13O r (1) of the EEC Treaty, which deals with the preservation  and protection of the environment.  The creation of data bases 2.24. The use of the CORINE data base which was developed as a pilot project is growing rapidly and its scope has continued to widen and to spread geographically. It is used internally within the Commission, and was the source of much of the information  in the 1992 State of the Environment Report which accompanies the Fifth Action Programme. It is also being used by an increasing number of national and local authorities, by the Statistical Office and the European Investment Bank.  The data base will form the starting point of the information network of the European Environment Agency once the Regulation setting up the Agency enters into force.  2.25. The Commission is aware of the problem of the dispersion of efforts in the creation of data bases which is taking place: the European Environment Agency is intended to be the focal point for coordinating future activity in this area.  It is true that diverging methods have been employed, but this is perfectly justified by the different nature of the end-products to be obtained. In the case of the MARS programme on agricultural statistics, for example, the end-product takes the form  of annual estimates of the utilized agricultural area (operational) and of yield (still at the experimental stage), where fully automatic interpretation of the satellite images is possible. The CORINE method is designed to produce a more qualitative  description, mapping various ecological categories, but could, however, also serve for an initial classification of agricultural categories. Cooperation between Commission departments bore fruit in both these cases.  2.26. The Commission and its Task Force for the European Environment Agency is very conscious of the need to make information available to potential users and the CORINE data base deals with all reasonable requests for information. It is not aware of  any complaints that such information is not accessible and indeed special efforts have been made to provide made-to-measure information available to users with specific needs.  Liaison between the Statistical Office and CORINE has been particularly close and constant (exchange of data bases such as REGIO, exchanges of geographical information via GISCO and preparation of the Directive on environmental statistics).  2.27. The final sentence is correct, but the Commission has taken steps to ensure that the CORINE data base is not allowed to run down. It is intended to form the foundations of the European Environment Agency's information base and the Commission  decided to use the 1991 budget allocation for the Agency to ensure the maintenance and exploitation of the CORINE system, a decision which the Council and Parliament have endorsed by allowing the 1991 credits to be spent in 1992.   CHAPTER 3  The structurally orientated financial instruments and the environment The evolution of the procedures 3.1 - 3.5. The Commission shares the Court of Auditors' view that in some Member States the authorities responsible for the environment have not always been sufficiently involved in the process of preparing the support from the Structural Funds.  Nevertheless, it must be remembered that at the moment the Commission has no mandatory basis for demanding their involvement since the Regulations governing the Funds stipulate that the Member States bear exclusive responsibility for establishing the  plans and programmes. When the time comes to prepare the next programme of structural measures the Commission will urge the broadest possible such consultation from the start of the planning procedure. It will also strive to keep the national and  regional authorities concerned fully informed of the priorities and of the Community's requirements concerning compatibility with the environment. Also the Commission will take steps to simplify the procedures for implementing support for structural  measures, particularly when it comes to revise the Regulations governing the Structural Funds.  Programme content 3.6 - 3.7. The absolute amounts invested in environmental measures are only one aspect of the environmental dimension of the structural policies. The Commission recalls that greater priority was given to investment in this field in the regions covered  by objective 1 and that it negotiated preferential rates for environmental improvement measures in the Community Support Frameworks for objective 2. At the same time it is conducting environmental assessments for Greece, Italy and Portugal. The  objective of these studies is to pinpoint the greatest environmental problems in the regions concerned and to identify the most immediate needs so that a remedy can be found. Measures such as these are a direct contribution towards helping the regions  to define their priorities for support more closely and, hence, to ensure more efficient public expenditure in the long term.  3.8. The Council has restricted support from the ERDF for environmental protection measures to investments closely linked to regional development. Consequently, the principal objective of the operational plans and programmes under the Community's  regional policies is to devise strategies and ensure consistency from this point of view. Naturally, they take account of the environmental impact of the measures planned, but they are not reference frameworks for every aspect of environmental  protection in a given area.  3.10. The ERDF is contributing towards financing the Athens underground because this high-priority investment will help to upgrade the basic infrastructure in the city. What is more, the project is one of the priorities in the Community Support  Frameworks for Greece. This investment will undeniably considerably alleviate pollution in Athens. However, formulation of a general urban traffic policy for Athens (or for any other city eligible for support under the structural policies) goes beyond  the objectives of the Community's structural policies.  3.11. The ERDF can make financial contributions towards the construction of hotels, as provided for in the operational programme for part of the Mezzogiorno region, if the objective is to develop the tourist potential of the region concerned. Withoud  denying that urban development can cause damage to coastal areas under certain circumstances, this is not the only aspect taken into account when assessing the advisability of building plans of this type.  Every project receiving Community support must nevertheless rigorously comply with all the Community's environmental legislation. Whenever an infringement procedure is initiated the Commission automatically suspends its financial support to the project  called into question.  3.12. The Court regrets that few measures concerning energy saving or the use of renewable or alternative sources of energy are being part-funded by the Structural Funds to follow up the non-quota energy programmes and the Valoren programme.  Work on the Valoren programmes received substantial funding from the Community but is now nearing completion. The Commission will embark on an assessment of the programmes in the near future. The findings will be taken into consideration for negotiating  the next phase of the programme.  The link between investments and environmental protection 3.13 - 3.14. As stated in points 3.1 to 3.5, the Commission shares the Court's view that the national and regional environmental authorities should be consulted not only on the structural aid directly concerned with environmental protection, such as the  Envireg programmes, but also on measures in other fields likely to have an impact on the environment.To encourage such a global approach, the Commission plans to extend the terms of reference of the network of experts set up under the Envireg programme  to include the environmental aspects of all the structural measures taken.  3.15 - 3.16. The Commission regards the wide distribution of water purification stations, and the fact that many of them remain unused for lack of funds to guaranties their upkeep and pay their running costs, as primarily an institutional problem  concerning the sharing of the relevant powers and of the available resources. It is true that some small authorities are unable to fulfill their obligations in this area. The  scale of certain environmental problems should prompt certain Member States  to consider more efficient sharing of responsibilities and resources.  The same argument concerning the internal power-sharing arrangements applies to the limited use made of the results supplied by the network set up under the operational programme for the Mezzogiorno region to monitor certain components of the  atmosphere.  In future the Commission will ensure that the facilities which it partfunds are operated properly.  3.17. The Court regrets that the contract concluded with the Business Innovation Centre (BIC) failed to take environmental matters into consideration. The general objectives of the BIC is to provide small businesses with the broadest possible range of  services to make them more competitive at regional, national or inter-regional level. Consequently, the environment is one parameter which is always taken into account. However, the Commission has deliberately not delimited the precise areas of activity  by small firms eligible for support from the BIC in order to maintain te flexibility needed to take action as and when requests are received from small businesses in the region in question.  3.18. It is true that the Community aid file for the construction of a dam on the River Aoos in Epirus was closed in 1991. The Community support for this project covered expenditure on compulsory purchases and on construction of the dam and certain  buildings. No mention was made of any plan to plant 30 000 trees when this support was granted. 3.19. A general clause in the contracts for global loans granted by the Commission in the context of the activities of he ECSC requires projects financed by these global loans to comply with the national and Community provisions on environmental  matters. The checks carried out by the Court in several countries showed that the clause had rarely been applied and was not reflected in the contracts for the financing of the projects. The financial intermediaries consulted pointed out that they had  not noticed the existence of such a clause and they raised the question of the cost of checks of this sort. In other cases, it was their opinion that the relevant laws were sufficient, which is tantamount to depriving the contractual clause of any  significance.  The Commission will draw the attention of the financial intermediaries to the importance of this clause. The Commission staff concerned will continue to check for compliance with the environmental clauses during their on-the-spot inspections of the  financial intermediaries and, where appropriate, of the final recipients of the subloans.  3.20. The shortcomings mentioned by the Court stem partly from the Member States' difficulties in taking account of the environment in their regional development strategies and measures and partly from imperfections in the implementation of the  Community Directives on the environment. In most cases, the Community's support for structural measures merely reveals more general problems in this connection. However, the Commission is considering which measures could be taken, when the Regulations  governing the Structural Funds are revised, to ensure that fuller account is taken of the environment.  The risks of a negative impact on the environment of other investment projects 3.21. The Commission regrets that the Court relies largely on examples drawn from past legislation to illustrate the risk that investments part-funded by the Structural Funds could have an adverse impact on the environment. Contrary to the Court, it  considers that considerable progress has been made since then, both in the management conditions and in the nature of the support. The considerable sums earmarked for environmental protection measures under the Community Support Frameworks for  objectives 1, 2 and 5b, the Community's ENVIREG programme and the explicit inclusion, in the new ERDF Regulation, of investment in the environmental field in the scope of the Fund cannot be ignored. In addition, the Commission has adopted clear rules to  ensure rigorous application of the Community legislation on the environment. In the event of an infringement procedure, the Community support is automatically withdrawn from the project called into question.  3.22. The Commission stresses that in the meantime an environmental impact assessment has been conducted on the work on the port of Salonika financed within the framework of the IMPs. The delay in starting the study was due to the time taken to find a  consultant qualified to deal with the complex issues and technologies involved.  3.23 - 3.25 and 3.27. The examples mentioned by the Court all concern national regulations or other national provisions which it is up to the Member States to monitor.  Nevertheless, the Commission will ask the authorities responsible in the Member States concerned for details of the measures which they have taken or plan to remedy the adverse environmental impact of the examples mentioned by the Court. The Commission  will inform the Court in due course.  3.26. The two cases mentioned by the Court concern aid granted to investments in environmental protection measures. However, in exceptional cases the aid provided for by Council Regulation (EEC) No 2328/91 may permit development of holdings and, hence,  an increase in production.  3.28. The sole objective of the project was to open up access to a new seam in a mine which has been worked since 1915 in order to maintain its production capacity.  The Commission endorsed this investment on the grounds that it fitted in with the objectives of the Council's energy policy.  The file contained no suggestion of any environmental problems.   CHAPTER 4  The protection of the quality of the environment Inspections at a number of local monitoring units 4.1. The Commission is aware of the shortcomings mentioned by the Court and is anxious to ensure that in future there is a greater exchange of experience between Member States. For this reason the Commission has urged a greater role for Member States in  the implementation of the Fifth Action Programme. As far as the private sector, especially the business sector, is concerned, the Commission has put to the Council a proposal for a Regulation on the conduct of environmental audits and the creation of a  body of environmental auditors.  4.4. The Court correctly notes that implementation of the environmental impact Directive has given rise to a number of difficulties. The Commission has monitored very closely its implementation by the Member States and, by 31 December 1990, 26  infringement procedures were under way for incorrect implementation of the Directive, even though most Member States had only recently introduced legislation. It should be noted that it is the Directive itself which contains the requirement that the  developer should establish the impact assessment.  Prevention and the 'polluter pays' principle 4.6 - 4.8. The Commission notes the Court's comments on the 'polluter pays' principle. The 1975 Council Recommendation was seen at the time as a first application of the principle which would develop and evolve in the light of results and also in the  light of socio-economic changes (including liabilities from the past).  The Community's approach has developed and has to be seen in the context of integrating environmental considerations into other areas with the 'polluter pays' principle playing an important role in this respect. The difficulty has been to bring about  full integration at the level of the Member States. Nevertheless the experience accumulated has now been incorporated in a coherent way in the Fifth Action Programme.  The Fifth Action Programme recognizes that legislation alone is not enough and that pricing and accounting mechanisms have a pivotal role to play in the achievement of environmental aims. Economic valuations can help economic circles take environmental  impacts into account when they make investment or consumption decisions. The Commission has suggested that where market forces are relevant, prices should reflect the full cost to society of production and consumption, including the environmental costs.  Equally the use of economic and fiscal incentives will be an important element in the future evolution of environmental policy. For example, in the field of water pollution consideration could be given to charges oriented towards discouraging pollution  at source and encouraging clean production processes. In aother area the Commission is currently considering an integrated approach to environmental liability as a tool of last resort to punish despoilation of the environment. Another category of  instrument is State aids where the Commission has already adopted a framework for environmental State aids in order to guarantee an orderly system in the Community, compatible with the 'polluter pays' principle. The Commission is currently considering  how to update this framework.  4.8. The Fifth Action Programme examines the measures required to determine environmental costs with a view to more environmentally effective pricing mechanisms, e.g. evaluation of natural and environmental resource status in economic terms, development  of renewable resource indicators, development of cost benefit analysis methodologies for the environment or redefinition of accounting concepts to take account of the use of environmental resources.  The application of the environmental Directives 4.9 - 4.13. The Commission notes the Court's comments on the implementation of environmental legislation and, in general, share this assessment. As part of its action under the Fifth Action Programme it intends to establish a network comprising  representatives of the national authorities and the Commission in the field of practical implementation of Community measures.  4.12. The Commission is conscious of the issues to which the Court draws attention and shares its assessment of the need to improve the application of legislation. This is taken up in the Fifth Action Programme, where the practical reforms proposed  include more careful choice and preparation of instruments, incorporation of specific enforcement provisions, training on application of legislation, stricter application of time frames, strict compliance with reporting requirements, etc.  In addition, the use of economic and fiscal instruments described elsewhere in the Fifth Action Programme will be used to complement the legislative measures and ensure better application thereof.  4.13. Council Directive 78/1015/EEC of 23 November 1978 and Council Directives 87/55/EEC and 89/235/EEC amending it have been implemented in every Member State except Greece, which has yet to notify the Commission of its national measures implementing  Directive 89/235/EEC.  As this Directive is optional, the Member States may retain their own parallel national regulations, which are generally less stringent than the harmonized rules.  To complete the legislation on two- and three-wheeled vehicles, the Commission is drafting a further proposal amending the Directive which will ensure full harmonization.   CONCLUSIONS AND RECOMMENDATIONS  5.1. The Commission would point out that environment action by the Community predates the 1986 Single Act and in fact goes back to 1972.  5.2 - 5.3. In the Declaration made at the June 1990 Dublin summit on 'the Environmental Imperative', reinforced by the changes to the Treaty agreed at Maastricht, the Community has already accepted the need for an integrated approach to resolve  environmental problems. Moves are being made away from the purely legislative or regulatory approach (command and control) to greater use of economic and fiscal instrument and other horizontal mechanisms such as training and education, research and  development, and some financial support mechanisms.  5.4. The role of Community financing is to complement these two main elements which will henceforth lie at the heart of he Community's environment policies. This will necessitate striking a balance between cleaning up environmental damage and preventing  new damage (the precautionary principle). This is being actively considered by the Commission in the context of the Structural Funds and the preparation of the new Cohesion Fund. It also lies at the heart of the approach adopted in the Commission's  Fifth Action Programme on the environment.  The Commission accepts the need for greater integration of environmental considerations into other aspects of Community policies and this is increasingly being done as these policies are developing.  The Fifth Action Programme, with its emphasis on integration and coordination with concrete, quantifiable objectives, precision on the means to be used, and indications of the role of the principal actors, provides the basis for achieving this  objective.  5.5. The Commission will ensure that environmental considerations are much more closely integrated into other policy areas. This has happened already in the preparation of the Fifth Action Programme where all Commission departments were fully involved  under DG XI's leadership in the development and agreement of the concepts which underlie the Programme.  5.6. For projects financed by environmental appropriations, the new financial planning procedures being introduced within DG XI will impose greater rigour in the definition, selection and implementation of projects. The centralization of finance and  contracts will ensure a much better administration and follow-up to projects and will require minimal use of external resources.  5.7. As regards the Court's suggestion that better information is necessary on the volume of financial assistance in the environmental sector, the Commission would again draw attention to the lack of reliable indications as to what constitutes  environmental expenditure: it will continue to work internally and externally to ensure that a common base is developed as rapidly as possible.  Within the area of pure environment expenditure administered by DG XI the computerization of financial procedures already being planned will allow improved information on financial flows in close coordination with other Commission departments.  5.8. Finally, as indicated in point 4.8, the Commission accepts the need to develop indicators of real environment costs. The Commission would draw attention to the fact that the definition of such costs has yet to be agreed in the work at global level  in which the Commission is fully involved. The internalization of such external environmental costs is perceived to be necessary and important for the future.  The 'polluter pays' principle is already being implemented by the development of economic and fiscal instruments, by self-regulatory instruments and by the introduction of the concept of civil liability for environmental damage.   (1)Declaration of the Council and of the representatives of  the governments of the Member States of 22 November 1973  on the programme of action of the European Communities on  the environment (OJ No C 112, 20. 12. 1973, p. 1).(2)Resolution  of the Council of the European Communities and  of the representatives of the governments of the Member  States of 17 May 1977 on the continuation and  implementation of a European Community policy and action  programme on the environment (OJ No C 139,  13. 6. 1977, p. 1).(3)Resolution of the Council and of the representatives of  the governments of the Member States of 7 February 1983 on  the continuation and implementation of a European  Community policy and action programme on the environment   (1982-1986) (OJ No C 46, 17. 2. 1983, p. 1).(4)Resolution of the Council and of the representatives of  the governments of the Member States of 19 October 1987 on  the continuation and implementation of a European  Community policy and action programme  on the environment  (1987-1992) (OJ No C 328, 7. 12. 1987, p. 1).(5)General budget of the European Communities for the  financial year 1975 (OJ No L 54, 28. 2. 1975, pp. 294, 295).(6)Bulletin of the European Communities No 6-1983, p.23.(7)Single  European Act (OJ No L 169, 29. 6. 1987, p. 1).(8)Bulletin of the European Communities, No 6-1990, p.18.(9)Council Regulation (EEC) No 1210/90 of 7 May 1990 (OJ No L 120, 11. 5. 1990, p. 1).(10)Commission document No COM(91) 28 final,  31.1.1991.(11)Resolution of the European Parliament embodying the  comments which form an integral part of the decision  granting a discharge in respect of the financial year  1988, paragraph 69 (OJ No C 113, 7. 5. 1990, p. 35). (12)Council Regulations  (EEC) Nos 3528/86 and 3529/86 of  17 November 1986 (OJ No L 326, 21. 11. 1986, pp. 2 and 5);  amended by Council Regulations (EEC) Nos 1613/89 and  1614/89 of 29 May 1989 (OJ No L 165, 15. 6. 1989, pp. 8 and  10).(13)Council Regulation (EEC) No 2052/88  of 24 June 1988 (OJ No L 185, 15. 7. 1988, p. 9).(14)Council Regulation (EEC) No 4253/80 of 19 December 1988  (OJ No L 374, 31. 12. 1988, p. 1). (15)Council Decision No 90/313/EEC of 22 March 1990 (OJ No L 81,  28. 3. 1990, p. 38).(16)Council Directive  No 90/313/EEC of 7 June 1990 (OJ No L 158,  23. 6. 1990, p. 56).(17)Council Regulation (EEC) No 2618/80 of 7 October 1980 (OJ No L 271, 15. 10. 1980, p. 16), as last amended by Council  Regulation (EEC) No 218/84 of 18 January 1984 (OJ No L 27,  31. 1.  1984, p. 19) - Council Regulation (EEC) No 3301/86, of  27 October 1986 (OJ No L 305, 31. 10. 1986, p. 6).(18)Paragraph 11 of Annex II to the model contract for global  loans.(19)OJ No L 175, 5. 7. 1985, p. 40.(20)Council Recommendation 75/436/Euratom,  ECSC, EEC, (OJ No L 194, 25. 7. 1975, p. 1).(21)Council Directive 76/464/EEC of 4 May 1976 (OJ No L 129,  18. 5. 1976, p. 23).(22)OJ No L 349, 13. 12. 1978, p. 21.(23)Council Directive No 91/414/EEC, of 15 July 1991 (OJ No L 230, 19. 8. 1991, p. 1) and  Council Directive No 91/368/EEC of  20 June 1991 (OJ No L 198, 22. 7. 1991, p. 16).