Re-examined proposal for a COUNCIL REGULATION (EC) ON REHABILITATION AND RECONSTRUCTION OPERATIONS IN DEVELOPING COUNTRIES
Date: 1996-07-31
Institutions: European Commission
Subjects: developing countries, development aid, economic reconstruction, financial aid, welfare

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  31.07.1996 
COM(96) 425  final 

95/0165  (SYN) 

Re-examined  proposal  for  a 

COUNCIL REGULATION  (EO 

ON REHABILITATION  AND RECONSTRUCTION  OPERATIONS 
IN DEVELOPING  COUNTRIES 

(presented  by the Commission  pursuant  to Article  189 c (d) 
of the EC  Treaty) 

EXPLANATORY  MEMORANDUM 

(concerning  the  amendments  requested  by  Parliament  on  second  reading  under  the 
cooperation  procedure  - amendments  accepted  and  amendments not incorporated  by  the 
Commission) 

Re-examined proposal for a Council Regulation TEC) on rehabilitation  and reconstruction 
operations  in  developing  countries 

Intel-institutional  reference:  95/0165  (SYN). 

Cooperation  procedure  second  reading Article  189c(d) 

BACKGROUND 

On 26 June  1995 the Commission presented to the Council and Parliament a proposal  for 
a  regulation  on  rehabilitation  and  reconstruction  operations  in  developing  countries 
(COM(95)  291  final). 

The proposal  for  a Council  regulation  on rehabilitation  and reconstruction  operations in 
developing  countries, based  on Article  130w of the Treaty, is subject to the  cooperation 
procedure  (Article  189c of the Treaty). 

In  accordance  with  this  cooperation  procedure,  on  15 December  1995  Parliament 
delivered  its  opinion  following  its first  reading. 

On 29 January  this year the Council  adopted  a common position which  the Commission 
did  not  accept. 

On  21 May  1996  Parliament  delivered  its  opinion  following  its  second  reading  and 
adopted  a total of  19 amendments (PE  166.050).  In accordance with Article  189c(d), the 
Commission  presented  a  re-examined  proposal  containing  the  amendments  it  had 
accepted. 

The  re-examined  proposal  is  intended  to  lay  down  the  detailed  procedures  for 
administering  the  budget  headings  for  financing  rehabilitation  and  reconstruction 
procedures in the developing countries and rehabilitation programmes in southern  Africa. 

COMMENTS  ON  THE  AMENDMENTS  ADOPTED  BY  PARLIAMENT  AT 
SECOND  READING 

(a) 

Analysis  of the  amendments  accepted/rejected. 

The  amendments  adopted  at second  reading  can be put into four  categories. 

The  Commission  adopted  the  following  amendments  in  their  entirety  because  they 
constitute  acceptable changes:  No  1, 1st part;  3,  1st part;  4,  1st and 4th parts;  5, 2nd 
and  4th  parts;  6, 2nd  part;  10, 2nd  part;  16,  1st part  - (a),(b),  and  (c)  and  2nd  part  -
1st,  2nd  and  3rd  paragraphs.  The  Commission,  however,  considers  that  the  content 
of amendment  No  10, 2nd part, would  be more appropriate  to the recitals than the 
body  of  the  Regulation. 

The  Commission  accepted  the  substance  of  the  following  amendments,  but  in  another 
form,  since  the  substance  constituted  an  acceptable  change  but  the  Commission 
preferred  other wording for these points:  No  1, 2nd part;  3, 2nd part;  4, 2nd and 3rd 
parts;  5,  1st part;  6,  1st part;  7,  1st  and  2nd  parts;  10,  1st part;  13. 

The  Commission  did  not incorporate  the following  amendments: 

either  because  they  did  not  correspond  to  the  objectives  set,  or  resources 
available, for  rehabilitation  or because they  imposed  an excessive  constraint 
on management:  No 2;  5, 3rd part;  8;  9;  12;  14;  15;  17, 2nd part;  18;  19 
or  because  they  are unacceptable  for  institutional  reasons:  No  10,  1st  part; 
11;  16, 2nd  part 4th paragraph;  17,  1st part. 

(b) 

The  Commission's  position  and  grounds for  that  position 

Account  being  taken  of  the  Commission  position  proposed  for  the  remainder  of  the 
amendments,  as  indicated  under  (a),  the  Commission  rejects  all  the  amendments 
mentioned  in  the preceding  paragraph  for  the following  reasons: 

No  2:  this  amendment  is  a reference  to  Southern  Africa's  past  situation  and  does  not 
correspond  to the present  context  and foreseeable  prospects  for  this area. 

No  5. 3rd  part:  this amendment concerns training  and education  schemes to counter the 
effects  of  fighting  within  the  country  and  destabilization  policies,  but  measures  of  this 
kind  are  already  provided  for  in  the  text  (mine  clearance  and  social  reintegration)  and 
under  other  operations. 

No  8:  this amendment limits financing  to  essential  expenditure, but in the  rehabilitation 
stage it may  be  necessary  to cover  all  operating  expenditure. 

No  9: 
this  amendment  makes  financial  contributions  from  local  operating  partners  a 
priority  objective  in  certain  cases, but  these  contributions  should  be  sought  in  the  light 
of various  factors  relating to each  operation. 

No  10.  1st part:  the purpose  of this amendment  is to  arrange  coordination  between  the 
Community  and the Member  States and  at international  level by  methods which  are not 
practicable  in that  no  attempt  is made to identify  the various  levels  of,  and  participants 
in,  the  coordination. 

No  11. 1st part:  the purpose  of this  amendment is to  delete the reference  to  procedures 
other  than  the  budgetary  procedure,  but  other  procedures,  such  as the  decision-making 
one,  have  to be  observed. 

this  amendment  includes  evaluation  measures  in  the  context  of  checks,  but 
No  12: 
evaluation must not be confused  with checks and in any event it is specifically  dealt with 
elsewhere. 

this  amendment  stipulates  that  participation  in  invitations  to  tender  may  be 
No  14: 
extended to other countries of the region, but it is preferable to extend participation to all 
developing  countries. 

No  15: 
this  amendment  stipulates  that  goods  and  services  may  originate  in  other 
countries  of the region,  but it is preferable  to allow them  to originate in  any  developing 
country. 

No  16. 2nd part. 4th paragraph:  this amendment  calls for  the Committee meetings to be 
held  in  public  and  for  its  minutes  to  be  transmitted  for  information,  but  this  is  not 
possible for interinstitutional  reasons, such as incompatibility  with committee procedures 
and  rules. 

No  17.  1st  part: 
an  observer  from  Parliament's  Committee  on  Development  and 
Cooperation  would  be  present  at  the  Committee  meetings,  but  this  is  not  possible  for 
interinstitutional  reasons,  in  particular  incompatibility  with  committee  procedures  and 
rules. 

No  17.  2nd  part:  wide-ranging  consultations  would  be  held  at  all  levels  to  establish 
general  guidelines  for  implementing  rehabilitation  operations. 
This  would  be 
impracticable  since the general guidelines will be established  as part of the Commission's 
cooperation  policy,  which  involves  ongoing  dialogue with  the various partners. 

No  18:  this  amendment  calls  for  details  concerning  implementation  to  be  given  in  the 
summary,  but this is not possible in practical  terms,  although the various partners in the 
rehabilitation  operations will  be  mentioned. 

No  19:  specific  reasons would  have  to be  given  for  financing  rehabilitation  operations 
from  budget headings when the beneficiary  countries could obtain funding  from  the EDF 
or under  the financial  protocols.  Budget headings for  rehabilitation  were  established  in 
order to provide additional financing for countries which are undergoing rehabilitation and 
as  a  rule  already  have  other  funding  available.  The  reasons  stem  from  the  special 
large-scale  requirements  of  this  category  of  country,  examined  when  the  general 
guidelines  are  drawn  up,  and  cannot  be  given  for  each  separate  operation,  since  this 
would  defeat  the  object  of the headings. 

Re-examined  proposal  for  a 

COUNCIL  REGULATION  (EC) No 

/96 

of 

on rehabilitation  and  reconstruction  operations 
in  developing  countries 

THE  COUNCIL  OF THE EUROPEAN  UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  130w thereof, 

Having  regard  to the proposal  from  the  Commission,^) 

Acting  in  accordance with  the procedure  laid  down  in Article  189c of the Treaty(2), 

Whereas  the  Commission,  in  its  communication  of  12 May  1993  to  the  European 
Parliament  and the Council  on a special rehabilitation  support programme in  developing 
countries, highlighted the specific nature and scale of the rehabilitation and reconstruction 
aid  needed  by  developing  countries  that  have  suffered  serious  destruction  through  war, 
civil  disorder  or natural  disaster; 

Whereas  the  conclusions  of  the  Council  (Development)  of  2 December  1993  on 
rehabilitation  aid  define the principal  objectives,  conditions and  criteria for  such aid and 
the 
emphasize 
Member  States when  planning  and  implementing  it; 

the  need  for  close  coordination  between 

the  Commission  and 

Whereas the Commission must ensure coherence and continuity in humanitarian aid, 
rehabilitation  and  development  operations; 

Whereas in its resolution of 16 November  1993(3) the European Parliament emphasized 
the  scale  of  the  developing  countries'  need  for  rehabilitation  aid  and  proposed  the 
establishment  of a specific  financial  framework  with considerable financial  resources  for 
that  purpose  in  the general  budget  of the European  Communities; 

Whereas  the European  Parliament  stressed  the need  to position  rehabilitation  operations 
in  a medium-term  or long-term  development  plan; 

Whereas Parliament also noted that high priority needed to be accorded to the speed 
and  efficiency  of aid; 

O J N o C 2 3 5,  9.9.1995,  p. 11. 
Opinion  of  the European  Parliament  of 
Common  position  of the Council  of 
Decision  of the European  Parliament  of 
OJ  C  329,  6.12.1993,  p. 77. 

(not  yet  published  in the Official  Journal), 
(not  yet  published  in the Official  Journal)  and 
(not  yet  published  in the Official  Journal). 

Whereas  the  budgetary  authority  included  in  the  budget  headings  for  the  financing  of 
rehabilitation  operations  in  southern  Africa  (B7-3210)  and  for  rehabilitation  and 
reconstruction  operations  in  developing  countries  (B7-6410); 

Whereas  procedures  should  be  established  for  the  administration  of  such  operations, 

HAS  ADOPTED  THIS  REGULATION: 

Article 1 

1.  The  Community  shall  carry  out  rehabilitation  and  reconstruction  operations  in  the 
developing  countries  referred  to  in  paragraph  2  which  have  suffered  serious  damage 
through  war,  civil  disorder  or  natural  disaster  with  priority  being  given  to  the  least 
developed  among  them.  Operations  of limited  duration,  to  be  launched  as  quickly  as 
possible,  shall  be designed  to help re-establish  a working  economy  and  the  institutional 
capacities  needed  to  restore  social  and  political  stability  to the  countries  concerned  and 
meet the needs of the people affected.  The operations must progressively  take over from 
humanitarian  action and pave the way for the resumption  of medium-term  and long-term 
development  aid.  They  must  in  particular  permit  refugees,  displaced  persons  and 
demobilized  troops  to  return  home  and  help  the  entire  population  resume  normal 
civilian  life  in  their  countries  and  regions  of  origin. 

2.  The  countries  to  benefit  from  this  Regulation  shall  be  the  African,  Caribbean  and 
Pacific  countries,  the Mediterranean  countries, the  countries  of Latin  America  and Asia 
and  the  developing  countries  of the  Caucasus  and  Central  Asia. 

Article 2 

1.  When  deciding  on  operations,  account  should  be  taken  wherever  possible  of  the 
existence  of  a minimal  level  of  security  and  a real  commitment  to  a transition  process 
respecting  democratic  values  and fundamental  freedoms. 

2.  The priorities for operations under this Regulation shall be: the relaunch of production 
on  a  lasting  basis,  the  physical  and  operational  rehabilitation  of  basic  infrastructure, 
including  mine clearance,  the reintegration  into society  of  refugees,  displaced  persons 
and  demobilized  troops  and the restoration  of the institutional  capacities needed  in the 
rehabilitation  period,  especially  at local  level.  Resources  may  also  be  earmarked  for 
the  development  of  economic  activity,  particularly  by  setting  up  SMEs  and 
promoting  regional  economic  integration. 

Article 3 

The  cooperation  partners  eligible  for  financial  support  under  this  Regulation  shall  be 
regional  and international  organizations and specialized non-governmental  organizations 
which,  according  to their  expertise  and  capacities,  can  make  a contribution  to the 
operations  referred  to  in  Articles  1 and  2, national,  provincial  and  local  government 
departments  and  agencies,  community-based  organizations,  institutes  and  public  and 
private  operators. 

Article 4 

1.  The instruments to be employed in the course of the operations referred  to in Article 1 
shall include  studies, technical  assistance, training or other  services, supplies and works, 
along with  audits  and  evaluation  and  monitoring  missions. 

2.  Community financing  may cover both investment, with the exception  of the purchase 
of buildings,  and recurring  costs (including  administrative,  maintenance  and  operational 
costs),  taking  account  of  the  fact  that  the  project  must  aim  to  have  the  recurring  costs 
taken  over  by  the  beneficiaries. 

3.  A financial  contribution from  the partners defined in Article  3 shall be sought for each 
cooperation  operation.  The  contribution  requested  shall  be  within  the  means  of  the 
partners  concerned  and  shall  depend  on  the  nature  of  the  operation.  In  specific  cases 
where the partner is an NGO or a community-based  organization,  a contribution  in kind 
may  be made. 

4.  Opportunities may be sought for cofinancing with other providers of funds,  especially 
with  Member  States. 

5.  The necessary  measures  shall be taken to emphasize the Community  character  of the 
aid  provided  under  this Regulation. 

6.  In order to achieve the objectives of coherence and complementarity  referred  to in the 
Treaty and with the aim of guaranteeing optimal efficiency  of the totality of these actions, 
the  Commission  will  take  all  necessary  coordination  measures,  notably: 

(a) 

(b) 

the  establishment  of  a  system  for  the  systematic  exchange  and  analysis  of 
information  on  actions  financed  or  for  which  financing  is  foreseen  by  the 
Community  and the Member  States; 

on-the-spot  coordination  of  these  actions  by  means  of  regular  meetings  and 
exchange  of  information  between  the  representatives  of  the  Commission  and 
Member  States in the beneficiary  country. 

7.  The  Commission,  in  conjunction  with  the  Member  States,  may  take  any  initiatives 
necessary  for  ensuring good  coordination with the other providers of funds,  in particular 
those forming  part  of the United  Nations  system. 

Financial  support under  this Regulation  shall  be in the form  of grants. 

Article 5 

Article 6 

1.  The  Commission  shall  appraise,  decide  and  administer  operations  covered  by  this 
Regulation  according  to  the  budgetary  and  other  procedures  in  force,  and  in  particular 
those  laid  down  in  the  Financial  Regulation  applicable  to  the  general  budget  of  the 
European  Communities. 

2.  Project  and  programme  appraisal  shall  take into  account  the following  factors: 

7 

those  laid  down  in  the  Financial  Regulation  applicable  to  the  general  budget  of  the 
European  Communities. 

2.  Project  and  programme  appraisal  shall  take into  account the following  factors: 

- 

- 

- 

- 

effectiveness  and viability  of  operations, 

cultural,  social,  gender  and  environmental  aspects, 

institutional  development  necessary  to achieve project  goals, 

experience  gained  from  operations  of the  same kind. 

3.  Decisions  relating  to  grants  of  more  than  ECU  2 million  for  individual  operations 
financed  under this Regulation  shall be taken under the procedure laid down in Article 7. 

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

4.  The  Commission  is  authorized  to  approve,  without  seeking  the  opinion  of  the 
Committee referred  to in Article  7, any extra commitments needed for  covering expected 
or  real  cost  overruns  in  connection  with  the  operations,  provided  that  the  overrun  or 
additional  requirement  is  less than  or  equal  to  20%  of  the  initial  commitment  fixed  by 
the financing  decision. 

Where  the  additional  commitment  referred  to  in the previous  subparagraph  is less than 
ECU  4 million, the Committee referred  to in Article  7 shall be informed  of the  decision 
taken  by  the  Commission.  Where  the  said  additional  commitment  is  more  than 
ECU  4 million  but  less than  20%, the Committee's  opinion  shall  be  sought. 

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

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

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

8.  Supplies  shall  originate  in  the  Member  States,  the  recipient  country  or  other 
developing  countries.  In  exceptional  cases, where  circumstances warrant,  supplies may 
originate  elsewhere. 

Article 7 

1.  The  Commission  shall  be  assisted  by  an  advisory  committee  made  up  of 
representatives  from  the  Member  States  and  chaired  by  a  representative  of  the 
Commission,  depending  on  the recipient  country  or  region  concerned,  as  follows: 

(a) 

(b) 

(c) 

for the African, Caribbean  and Pacific  countries, the EDF Committee set up 
by  Article  21  of  Internal  Agreement  91/401/EEC  on  the  financing  and 
administration  of  Community  aid  under  the  fourth  Lomé  Convention, 
adopted  on  16 July  1990  by  the  representatives  of  the  governments  of  the 
Member  States,  meeting within  the  Council; 

for  the Mediterranean  countries, the MED Committee set up by Article  6 of 
Council Regulation  (EEC)  No  1762/92 on the implementation of the Protocols 
on  financial  and  technical  cooperation  concluded  by  the  Community  with 
Mediterranean  non-member  countries; 

for  the Asian  and  Latin American  countries, the ALA Committee  set  up by 
Article  15 of Council Regulation  (EEC) No  443/92 on financial  and technical 
assistance to, and economic cooperation with, the developing countries in Asia 
and  Latin  America. 

2.  The  Commission  representative  shall  submit  to  the  Committee  a  draft  of  the 
measures to be taken.  The Committee shall  deliver  its opinion  on the draft,  within 
a  time  limit  which  the  chairman  may  lay  down  according  to  the  urgency  of  the 
matter,  if  necessary  by  taking  a vote. 

The opinion shall be recorded in the minutes;  in addition, each Member State shall 
have  the  right  to  ask  to  have  its  position  recorded  in  the  minutes. 

The  Commission  shall  take  the  utmost  account  of  the  opinion  delivered  by  the 
Committee.  It  shall  inform  the Committee  of the  manner  in which  its opinion  has 
been  taken  into  account. 

Article 8 

An exchange of views shall take place, once a year,  on the basis of a presentation  by the 
Commission's representative of the general guidelines for the operations to be carried out 
in  the year  ahead,  in the framework  of  a joint  meeting  of the  committees  referred  to in 
Article  7(1). 

Article 9 

After  each budget year, the Commission  shall report to the European Parliament  and the 
Council,  summarizing  the  operations  financed  in  the  course  of that  year  and  evaluating 
the implementation  of this Regulation  in that  period. 

The  summary  shall  in  particular  contain  information  about  those  with  whom  contracts 
have been  concluded. 

The  report  shall  also  include  a  summary  of  the  conclusions  of  any  independent 
evaluations  of  specific  operations. 

The  Commission  shall  inform  the  Member  States,  at  the  latest  one month  after  its 
decision,  of the operations and projects that have been approved,  and  shall indicate their 
amounts,  character,  recipient  country  and  partners. 

Article  10 

The  Commission  shall  regularly  assess  operations  financed  by  the  Community  in  order 
to  establish whether  the objectives  of the operations have been  achieved  and to provide 
guidelines  for  improving  the  effectiveness  of future  operations.  The  Commission  shall 
submit  to  the  Committee  referred  to  in  Article  7  a  summary  of  the  assessments  made, 
which the latter may, if necessary,  examine.  Assessment reports shall be made available 
to  any  Member  States requesting  them. 

Article  11 

This Regulation  shall  enter  into force  on the  third  day  following  that  of its  publication 
the  Official  Journal  of  the  European  Communities  and  shall  apply  from 
in 
1 January  1997. 

Three  years  after  this  Regulation  enters into  force,  the  Commission  shall  submit  to  the 
European Parliament and the Council an overall assessment of operations financed  by the 
Community  under this Regulation, together with  suggestions regarding the future  of this 
Regulation  and, where  necessary,  proposals  for  amending  it. 

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

Done  at Brussels, 

For the  Council 
The  President 

10 

ISSN  0254-1475 

COM(96) 425  final 

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