Special Report No 12/2000 on the management by the Commission of European Union support for the development of human rights and democracy in third countries, together with the Commission's replies
Date: 2000-05-18
Institutions: European Court of Auditors
Subjects: EU aid, EU programme, democratisation, human rights, third country

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I

(Information)

COURT OF AUDITORS

SPECIAL REPORT No 12/2000

on the management by the Commission of European Union support for the development of
human rights and democracy in third countries, together with the Commission’s replies

(pursuant to Article 248(4) second subparagraph, EC)

(2000/C 230/01)

TABLE OF CONTENTS

Paragraph

Page

EXECUTIVE SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The growth in importance of policy on human rights and democracy . . . . . . . . . . . . . . . . .

Complexity of the legal and budgetary framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EU measures in support of democracy and for the defence of human rights . . . . . . . . . . . . .

Scope of the audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

STRATEGY OF THE PROGRAMMES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Country strategies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Project selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Selection of implementing bodies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

OUTCOME OF THE PROGRAMMES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effectiveness, relevance and impact of the measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Evidence from programme evaluations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Visibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROGRAMME MANAGEMENT BY THE COMMISSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Organisation and management resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Administrative rules, guidelines and procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Grants versus service contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contracting and co-financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Feedback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1-19

1-5

6-9

10-16

17-19

20-31

20-24

25-28

29-31

32-52

32-44

45-46

47-49

50-52

53-74

53-63

64-72

64

65-69

70-72

73-74

3

3

3

4

6

6

7

7

7

8

8

8

9

10

10

11

11

12

12

13

13

14

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Paragraph

Page

CONCLUSIONS AND RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75-85

Simplify the legal and budgetary framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75

Improve the selection of projects and partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

76-77

Define programme and project success indicators and follow up their achievement . . . . . . .

78

Emphasise the long-term impact of the EU support by ensuring that measures are sustain-
able . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Adopt appropriate procedures to manage the grant programmes . . . . . . . . . . . . . . . . . . . . .

79-81

82-85

ANNEX 1: Overview of external human rights and democracy support measures of the EU in
the period 1994 to 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ANNEX 2: Analysis of measures to support democracy and human rights financed from the
Phare and Tacis programmes (1993 to 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ANNEX 3: Glossary of acronyms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Commission’s replies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14

14

14

14

14

15

16

18

19

20

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EXECUTIVE SUMMARY

The main audit findings have been regrouped into three cat-
egories. First, in respect of programming, the Court identified the
following weaknesses:

(a) generally there is a need for the Commission to improve the
way in which measures to support human rights and democ-
racy are defined in country strategies (paragraphs 20 to 24);

(b) in many cases, projects were proposed by local communities
and organisations, and then appraised and decided on by the
Commission; although such a demand-driven approach is
appropriate in this area in order to enhance ownership, it
should be applied within a more clearly defined framework of
priorities and selection criteria. For central and east European
programmes procedures were the most systematic with calls
for expressions of interest on a regular basis (paragraphs 25
to 28);

(c) when selecting projects, the Commission did not pay suffi-
cient attention to assessing the capacity of implementing bod-
ies. The procedures of the Commission in this area, however,
have been improved in the call for proposals in June 1999
(paragraphs 29 to 31).

The Court further examined the outcome of the programmes and
found that:

(a) projects were too thinly spread over too many intervention
areas which limited their impact on the democracy and human
rights situation in third countries (paragraphs 34 and 46);

(b) individual projects were relevant as such, i.e. they addressed
human rights and democracy issues in the countries con-
cerned, but there was a lack of predefined indicators to mea-
sure their effectiveness and impact (paragraphs 35 to 39 and
46);

(c)

insufficient attention was paid to the continuity of the activi-
ties, which limited the long-term effects of the Commission’s
support (paragraphs 47 to 49);

(d) a strategy on how to obtain greater visibility for the European
Union’s involvement in supporting human rights and democ-
racy was not always carefully thought out (paragraph 50);

(e) although the general findings of the evaluation of the pro-
grammes are positive, some of them confirmed the Court’s
findings concerning the broad nature of the objectives, weak
impact and the lack of management resources (para-
graphs 45 to 46).

(a)

in order to overcome the insufficient staff resources allocated
by the Commission to the management of the different pro-
grammes, each of the implementing DGs had recourse to the
subcontracting of additional external management resources.
Each of the solutions adopted was found to be weak and
unacceptable (paragraphs 54 to 63);

(b) in a significant number of cases, the contractual conditions
applied were those for grants; in reality, however, the relation-
ship between the implementing body and the Commission
was a service one, which requires different contractual condi-
tions (paragraph 64);

(c) contract provisions and finance mechanisms were not stand-

ard (paragraphs 65 to 66);

(d) financial monitoring of contracts was weak, which led to the
payment of non-eligible expenditure (paragraphs 70 to 71);

(e) recommendations of evaluation reports were not implemented

(paragraphs 73 to 74).

The above findings show that the approach of the Commission to
the management of the programmes was inappropriate. The inad-
equate staff resources and systems mean that the Commission is
not able to follow in detail the implementation of large numbers
of frequently small contracts. The Commission should therefore
adopt a different approach which focuses more on what is achieved
by partners with the funds received, while obtaining reasonable
assurance that the funds are used correctly for the purpose for
which they are granted (see conclusions and recommendations).

INTRODUCTION

The growth in importance of policy on human rights and
democracy

1. Since the latter part of the 1980s, as democratic transitions
spread through various parts of the world, there has been a rapid
and significant expansion in programmes of assistance financed
by the European Union and other major donors to support the
development of human rights and democracy. The overall pur-
pose of these programmes is twofold :

(a) to promote human rights and democracy for their own sake,
as a political good that will improve the lives of citizens by
bringing more freedom, political representation and govern-
ment accountability;

Throughout the audit the Court also identified an important
number of shortcomings in respect of programme management
by the Commission:

(b) to support the idea that the promotion of human rights and
democracy is an essential part of the process of furthering
sustainable social and economic development.

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2. At the Copenhagen European Council in June 1993 it was
specified, as one of the conditions required of the countries apply-
ing to join the European Union, that these countries had to have
achieved stability of institutions guaranteeing democracy, the rule
of law, and human rights and respect for and protection of
minorities. The guidelines which the Commission decided in
October 1999 for the implementation of the Phare programme
for the period 2000 to 2006 (1) emphasise that these criteria are
still relevant with regard to the granting of pre-accession aid.

the promotion and safeguarding of human rights constitutes an
essential element in external relations (2), and in 1998 a study
analysing from legal, political, institutional and philosophical
points of view the current role of the Union in this area.

Complexity of the legal and budgetary framework

3. The European Union has also been at the forefront in declar-
ing protection and promotion of human rights and democracy to
be priorities of its development programmes. It has operated on
two fronts:

(a) firstly, by applying political pressure on governments (estab-
lishing agreements which require governments that receive
EU assistance to respect the principles of liberty, democracy,
human rights, fundamental freedoms and the rule of law,
freezing assistance when such principles are flouted);

(b) secondly, by funding measures through public authorities and

institutions, and through NGOs and voluntary bodies.

6. To further the overall policy objectives set out in the Treaties,
most of the Council Regulations adopted in the area of external
aid include human rights and democracy related objectives. Each
of the mainstream geographic regulations (Phare, Tacis, PVDALA,
MEDA), and other cross-cutting regulations such as the integra-
tion of gender issues in external aid, makes provision for the
financing of measures to develop and consolidate democracy and
the rule of law, and to promote respect for human rights and fun-
damental freedoms. Also, the Council Regulation on co-financing
operations with European non-governmental organisations pays
connected with the
particular
strengthening of civil society and the promotion and defence of
human rights and democracy. The Regulation on decentralised
cooperation aims to contribute to the diversification and rein-
forcement of civil society and grassroots democracy in develop-
ing countries.

attention to operations

4. The importance attached by the political authorities of the
Union to the protection of democracy and human rights is
reflected in the Treaties. Article 177 of the Treaty establishing the
European Community states that ‘Community policy in the area
of development cooperation shall contribute to the general objec-
tive of developing and consolidating democracy and the rule of
law, and to that of respecting human rights and fundamental free-
doms’. Further, Article 11 of the Treaty on European Union pro-
vides, as part of the Union’s objectives for its common foreign
and security policy, that it aims ‘to develop and consolidate
democracy and the rule of law’. Also, Article 5 of the revised
fourth Lomé Convention deals extensively with human rights and
democracy.

7. Each Council Regulation, with its specific definition of objec-
tives in the area of human rights and democracy, and its own pro-
cedures, is the legal basis for expenditure from different, specific
budget headings. As a consequence, there are several different
sources of budgetary funds from which human rights and democ-
racy measures can be financed.

8.
In 1994, at Parliament’s request, the European initiative for
democracy and the protection of human rights was launched,
designed to ensure consistent and effective action in this area by
gathering together into budget Title B7-7 resources explicitly ear-
marked for the promotion of human rights and democratic prin-
ciples.

5. Community initiatives to define overall strategy and prior-
ities in the area of human rights and democracy have developed
over time, in the light of experience and the growing interest of
the authorities of the Union. Among such initiatives are research
commissioned with the European University Institute in 1989 to
identify priority themes for Community human rights pro-
grammes, a communication of 1995 proposing that in all co-
operation agreements there should be a clause recognising that

9. However, the objectives of the underlying Council Regula-
tions governing the European initiative, proposed by the Com-
mission in 1997 and decided on in April 1999 (3), are ambitious
and exhaustive (see Table 1) and cover a wide range of activities
which are also eligible under the other Regulations. In para-
graph 75 the Court proposes a simplification of the legal and
budgetary framework.

(1) SEC(1999) 1596 final of 13 October 1999.

(2) COM(96) 672 final of 17 January 1997.
(3) Council Regulations (EC) No 975/1999 and (EC) No 976/1999 of

29 April 1999 (OJ L 120, 8.5.1999).

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Objectives of the Council Regulations governing expenditure under the European initiative for democracy and
the protection of human rights

Table 1

Measures aimed to promote and defend human rights and other fundamental freedoms

— the promotion and protection of civil and political rights,
— the promotion and protection of economic, social and cultural rights,
— the promotion and protection of the human rights of those discriminated against, or suffering from poverty or disad-

vantage, which will contribute to reduction of poverty and social exclusion,

— support for minorities, ethnic groups and indigenous people,
— supporting local, national, regional or international institutions, including NGOs, involved in the protection, promo-

tion or defence of human rights,

— support for rehabilitation centres for torture victims and for organisations offering concrete help to victims of human
rights abuses or help to improve conditions in places where people are deprived of their liberty in order to prevent
torture or ill-treatment,

— support for education, training and consciousness-raising in the area of human rights,
— supporting measure to monitor human rights, including the training of observers,
— the promotion of equality of opportunity and non-discriminatory practices, including measures to combat racism and

xenophobia,

— promoting and protecting the fundamental freedoms mentioned in the International Covenant on Civil and Political
Rights, in particular the freedom of opinion, expression and conscience, and the right to use one’s own language.

Supporting the process of democratisation

— promoting and strengthening the rule of law,

in particular upholding the independence of the judiciary and
strengthening it, and support for a humane prison system; support for constitutional and legislative reform; support
for initiatives to abolish the death penalty,

— promoting the separation of powers, particularly the independence of the judiciary and the legislature from the execu-

tive, and support for institutional reforms,

— promotion of pluralism both at political level and at the level of civil society by strengthening the institutions needed to
maintain the pluralist nature of that society, including non-governmental organisations, and by promoting independent
and responsible media and supporting a free press and respect for the rights of freedom and of association and of
assembly,

— promoting good governance, particularly by supporting administrative accountability and the prevention and combat-

ing of corruption,

— promoting the participation of the people in the decision-making process at national, regional and local level, in par-
ticular by promoting the equal participation of men and women in civil society, in economic life and in politics,
— support for electoral processes, in particular by supporting independent electoral commissions, granting material, tech-
nical and legal assistance in preparing for elections, including electoral censuses, taking measures to promote the par-
ticipation of specific groups, in particular women, in the electoral process, and by training observers,

— supporting national efforts to separate civilian and military functions, training civilian and military personnel and rais-

ing their awareness of human rights.

Support for measures to promote respect for human rights and democratisation by preventing conflict and dealing with
its consequences, in close collaboration with the relevant competent bodies

— supporting capacity-building, including the establishment of local early warning systems,
— supporting measures aimed at balancing opportunities and at bridging existing dividing lines among different identity

groups,

— supporting measures facilitating the peaceful conciliation of group interests, including support for confidence-building

measures relating to human rights and democratisation, in order to prevent conflict and to restore civil peace,

— promoting international humanitarian law and its observance by all parties to a conflict,
— supporting international, regional or local organisations, including the NGOs, involved in the prevention, resolving and
dealing with the consequences of conflict, including support for establishing ad hoc international criminal tribunals and
setting up a permanent international criminal court, and support and assistance for the victims of human rights viola-
tions.

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EU measures in support of democracy and for the defence of
human rights

10. Because of the broad nature of the policy objectives and the
spread of activities throughout the different budgetary external
aid chapters, the Court has not sought to present an overall pic-
ture of the total amounts of expenditure on human rights and
democracy measures as any such picture would necessarily involve
somewhat arbitrary judgements on what to include or exclude.

11. Annex 1 provides information on commitments entered into
and payments made under budget Title B7-7 (EIDHR) for the
period 1994 to 1998. Actual commitments totalled EUR 397,1
million and payments EUR 264,4 million. In the following para-
graphs, a short description is given of the programme strategies
followed by the Commission in each of the main geographical
areas.

tion, legal aid), for the strengthening both of formal democracy
(institutional building) and civil society. Further, larger projects
with a human rights and democracy emphasis (electoral support,
support to public authorities such as police forces and justice sys-
tems, street children projects, etc.) were also financed under the
mainstream financial and technical cooperation programmes.

16. For cooperation activities in ACP countries, a similar approach
was used, i.e. small pilot measures (for example, human rights
observers, electoral support), were financed from B7-7 funds and,
where necessary, main human rights and democracy projects were
financed under the national indicative programmes of the Euro-
pean Development Funds (EDF). A significant part of the B7-7
funds was used to provide complementary finance to EDF funds
to finance interventions such as the observation of elections, the
support of peace processes and the sending of human rights
observer missions, which are the kind of measures that elsewhere,
in other circumstances, have been financed under the common
foreign and security policy.

12. Within the Phare and Tacis programmes, formal democracy
is furthered by the funding of programmes, agreed with each
State, for the strengthening of democratic institutions (e.g. Parlia-
ment, the civil service, the Courts).

Scope of the audit

13. With regard to the development of open civil society, by
funding proposals from NGOs and voluntary bodies, two main
instruments were used:

(a) the LIEN programme (financed within the mainstream Phare
and Tacis budget headings) under the framework of which the
Commission co-finances NGO measures in favour of disad-
vantaged groups. This programme is on the borderline between
overall and social development programmes and core human
rights and democracy measures;

17. For each of the main geographical regions (1), countries were
selected primarily on the basis of the importance of human rights
issues affecting them, and the volume of Community-financed
measures. The EU’s overall policy on human rights in those coun-
tries was reviewed. In each country, a number of projects were
selected, the planning and implementation of which was exam-
ined in detail. These projects, which cover the period 1994 to
1998, were mainly from the European initiative on democracy
and the protection of human rights, but some large projects and
programmes financed from the mainstream budget headings were
also included. Several regions and countries were visited (2), and
for others the audit was carried out at the Commission depart-
ments only (3).

(b) the PHARE and TACIS democracy programmes (set apart in
the B7-7 budget Title) under which macro- and micro-projects
were financed.

18. The Commission has taken action on the detailed audit find-
ings, notably where the Court recommended that further inves-
tigations of management weakness and irregularities were needed
(see paragraph 71).

14. The Court has drawn together for the period 1993 to 1998
financial information for the programmes examined in central
and east European countries, which is presented in Annex 2. Pay-
ments over this period totalled EUR 243,9 million. The notes pre-
sented there on the limitations of these data should be borne in
mind.

19. The findings presented in this report are general, and cover
all the various forms of assistance, as well as most of the countries
in which the measures are carried out. Where the observations
concern particular programmes, this is noted.

15. For Asia, Latin America and the Mediterranean countries,
the Commission department concerned used the available B7-7
funds mainly to co-finance small pilot measures (for example,
courses for policemen on human rights issues, electoral educa-

(1) Central and eastern Europe, the new independent States, South
America, Central America, Asia, the Mediterranean and Middle East,
Africa, the Caribbean and Pacific.

(2) Argentina, Brazil, Bulgaria, Chile, Peru, Romania, Russia, Slovakia and

Ukraine.

(3) El Salvador, Guatemala, Haiti, Mozambique, Nicaragua, Palestine,

Panama, Rwanda and Turkey.

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STRATEGY OF THE PROGRAMMES

Country strategies

23. The Court found however that at Delegation level the human
rights and democracy situation of the countries was actively
monitored. For instance, in Chile and Peru, the Delegations had
produced papers in 1997 in which they clearly described the main
problems and events in the different sub-areas.

20. Within each of the cooperation programmes, it is the policy
of the Commission to develop country strategies to provide a
framework for its interventions. Such a strategy should, among
other things, assess the current situation of the country, define
priority areas in which the Commission aims to intervene and set
out a framework within which individual measures can be identi-
fied, selected and implemented. The local democracy and human
rights situation and policies should be an integral part of such a
country strategy, particularly when democracy and the protection
of human rights are central issues for the country concerned (1).

21. A particular situation exists for the applicant countries for
EU membership. The Europe Agreement which each of them has
signed enshrines a commitment to a pluralist democracy based
on the rule of law, human rights and fundamental freedoms, a
multiparty system involving free democratic elections, to the
principle of a market economy and to social justice, which con-
stitutes the basis for the association (2). This has led to the Com-
mission focusing on human rights and democracy issues as spe-
cific accession requirements.

22. Although practices varied for the other countries, the Court
found little evidence that the Commission had effectively assessed
the democracy and human rights situation and needs of the bene-
ficiary countries and that it had developed a strategy specifically
tailored to the requirements of the country (identifying key prob-
lems and proposing solutions). Even in those countries where
support for human rights and democracy was mentioned in the
overall country strategy papers, as was the case in some Latin
American countries, definitions were vague and too general to
allow a focused approach. In most of the country strategy papers
for the Asian and Latin American countries examined by the Asia
and Latin America (ALA) Committee in 1998 and 1999, there
was either little or no mention of human rights and democracy
issues.

24.
In many of the countries concerned, the key areas where
intervention was needed were quite well known so that measures
in such areas were bound to be relevant. Such a situation, how-
ever, does not remove the need to develop a strategy, with clear
objectives and priorities (3). It should be noted that the purpose
of such a strategy is not just to provide officials with a framework
and a basis on which to manage the programme, but also to
enable Member State representatives, agencies and NGOs involved
in human rights and democracy work to understand what the
Commission wishes to do.

Project selection

25.
In all areas covered by this report, in many cases, local com-
munities and organisations proposed projects, these projects were
then appraised and decided upon by the Commission. Although
a demand-driven approach is appropriate in this area in order to
enhance ownership, it should be applied within a more clearly
defined framework of priorities and selection criteria.

26. The Commission department responsible for implementing
programmes in central and eastern Europe called for expressions
of interest on a regular basis and used standardised selection pro-
cedures. This approach allowed the needs of civil society to be
identified through the project proposals of the local NGOs. In
practice, most of the projects thus selected concerned human
rights, NGO development, independent media and parliamentary
practice.

27. With the publication of its opinion on the accession of cer-
tain central and east European States to the EU (4), the Commis-
sion acknowledged that it is now more appropriate for the selec-
tion procedures for the human rights and democracy programme
to be more focused on accession issues.

(1) The Commission’s approach to country strategy papers is that they
cover essentially the mainstream financial, technical, and economic
cooperation programmes of assistance, but not all aspects of the
Commission’s cooperation with a given country. Separate strategy
documents are to be prepared on other aspects, such as human rights
and democracy. The Court, however, considers that there should be
one strategy document which covers all significant areas of coopera-
tion.

(2) Applicant States are required to satisfy the Copenhagen criterion for
stable institutions to guarantee democracy, the rule of law, and respect
for human rights, particularly for those of minorities; and to address
the issues raised by the Commission in its Agenda 2000 series of pub-
lished analyses of the progress achieved towards a pluralist economy.

28. Project identification and selection procedures used by the
Commission departments responsible for Latin American and
Mediterranean and ACP countries were much more informal, for

(3) One delegation, in commenting on the observations of the auditors
in a sector letter, argued that although no strategy had been written
down, it could be seen to exist from the portfolio of projects financed,
all of which were in human rights and democracy areas of major con-
cern.

(4) Agenda 2000.

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no apparent reason other than the different working methods of
the services. For these regions, the Delegations were asked to pub-
licise the programmes by informing NGOs and government agen-
cies of their existence but there were no calls for expression of
interest. Projects were mostly identified and appraised by short-
term expert missions or were the result of direct contacts between
local organisations and Delegation/central departments. Although
the projects approved reflected priorities as seen by these local
organisations, such a procedure does not ensure that all key needs
were identified and covered.

relating both to project content (thematic areas), with a first effort
at fixing priorities, and to the implementing bodies (statute, finan-
cial solidity, etc.).

OUTCOME OF THE PROGRAMMES

Effectiveness, relevance and impact of the measures

Selection of implementing bodies

29.
In central and eastern Europe, the Commission departments
initially found that support of local civil society always required
the use of European Union partner NGOs in project implementa-
tion. In many cases, however, the role of these partners was lim-
ited and unclear and their added value in the projects was not
commensurate with the costs incurred. Therefore, and also because
local NGOs have matured with experience, the direct intervention
of EU NGOs should now be reduced.

30. The Commission departments responsible for Latin Ameri-
can and Mediterranean countries chose to work directly with local
NGOs. This could have enabled the Commission to create a strong
direct relationship with local civil society and to participate actively
in its strengthening the capacity of the organisations with which
it worked. It does not seem, however, to have succeeded in this for
the following reasons:

(a)

little or no information could be found in the project files that
the Commission departments had sufficiently examined the
administrative, organisational, financial, personnel and tech-
nological strengths and weaknesses of its partners;

(b) the administrative guidelines (budgetary and reporting require-
ments) and procedures (decisions, payments) specified by the
Commission department more often put an extra burden on
the partners rather than helping to strengthen them.

31.
In June 1999, the Commission published an overall call for
proposals (1) for most of the budget headings under the EIDHR.
This is a major improvement. The overall transparency of the
selection procedures is enhanced. The Commission departments
have established guidelines in which are defined eligibility criteria

(1) Call for proposals 1999/C 170/10 for the European initiative for

democracy and human rights, published on 17 June 1999.

32. To assess effectiveness, i.e. whether the goals and objectives
set for the programmes and projects are achieved, it is necessary
that they are clearly set out in a way that can be evaluated. The
links between the different levels have to be identified, showing
how the results of a project contribute to the achievement of the
programme goals. The monitoring, control, and information sys-
tems should then provide the information needed for the assess-
ment.

33. Paragraphs 1 and 22 point to the wide definition of pro-
gramme goals, and the lack of adequate strategies defined in
operational terms. This makes the assessment of the effectiveness
at the programme or country level difficult.

34. Nevertheless, in most of the Commission’s documents, the
impact of its human rights and democracy programmes is seen as
a success because of their contribution to the growth of civil soci-
eties which played a crucial role in the democratisation processes
of the countries involved. While some credit for this can be given
to the EU programmes, one of the main findings of the audit,
which is supported by evaluations which the Commission has
arranged of its programmes (2), is that the Commission’s project
portfolios have been spread too thinly over the different interven-
tion areas, thus diluting their impact.

35. For the individual projects, objectives and results were not
clearly defined and quantified, and the way in which impact could

(2)

‘Evaluation of EC positive measures in favour of human rights and
democracy (1991 to 1993)’, GDI, May 1995; ‘Phare democracy pro-
gramme 1992 evaluation report of the pilot phase’ E. Eberhardt,
‘Evaluation of the Phare and Tacis democracy pro-
August 1995;
gramme 1992 to 1997’, ISA Consult, European Institute, Sussex Uni-
versity, and GJW Europe, September 1997; ‘Analysis and evaluation
of the programme of support for democracy and human rights in
Central America (November to December 1997)’, V. Zapatero,
P. Subra de Bieusses, I. Astarloa. Other evaluations carried out in the
area are: ‘Evaluation of MEDA democracy programme’, Euronet con-
sulting, April 1999; ‘Evaluation on the European special programme
in South Africa’, October 1996; ‘International Alert’s actvities in con-
flict prevention’, May 1998; AWEPA (Association of west European
Parliamentarians) activities, November 1998; Mozambique elections,
February 1999.

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be assessed was not specified. Frequently, project activities were
presented as the purpose of the project. In none of the projects
examined were the criteria for judging success made explicit, nor
were any mechanisms proposed for evaluating this. Although the
Commission introduced the use of logical framework analysis for
its cooperation programmes during this period, this project man-
agement tool was not used for most of the projects under the
European initiative for democracy and the protection of human
rights (1).

In the case of conferences, meetings and seminars, it is insuf-
36.
ficient to consider that simply organising and holding them means
that the measures are effective. First of all, it is necessary to build
into such activities elements which assess their quality. More
emphasis should also be placed on trying to identify ways of
assessing whether such events are effective.

37.
It is fully recognised that it is not easy to define and draw up
such indicators in this area of cooperation and that it is not always
possible to quantify them. Further, it is acknowledged that it is not
because impact can only be quantified with considerable diffi-
culty, or even not at all, that one has to be sceptical. It is also
recognised that project effects can often only be observed in the
medium and long term.

(b) in the reports of the monitoring/evaluation missions sent by
the Commission to check on its outstanding portfolio, insuf-
ficient objectively verifiable information was found on the
effectiveness of projects.

40. Nevertheless, the Court found that most of the B7-7 projects
examined were relevant in that they addressed existing needs of
the countries concerned. This is perhaps not surprising, given the
very broad definition of what constitutes an intervention in the
area of democracy and support for human rights, and the fact
that the principal areas of need in the countries concerned were
quite clear.

41. The larger projects examined which were financed from
mainstream budget headings also responded clearly to priorities
in the countries concerned. At the time of the audit, however,
they had not reached a sufficient stage of implementation to
enable conclusions concerning their effectiveness to be drawn.

42. The effectiveness and impact of many of the projects exam-
ined were adversely affected by slow implementation at various
stages. In the Latin American programme, for instance, although
the programme mainly financed short-term one-off operations,
administrative procedures were rigid and inefficient, leading to
major delays. For most of the projects, several months elapsed
between the date of proposal and the date of contract signature
and there were even cases where the contracting procedure took
more than one year.

38. None the less, the Court considers that the Commission
needs to strengthen its efforts to define criteria and benchmarks
by which the outcome of activities can be assessed and introduce
them in project definitions. If it does not, external aid in this area
risks ending up as the financing of apparently relevant measures,
which are considered, on a subjective basis, to be effective and to
have a positive impact, without there being any objective evidence
to support this.

43. After the contracts were signed, these projects in the Latin
American programme were further delayed because the Commis-
sion departments took several months to transfer the initial
advances while the organisations did not have the capacity to pre-
finance the activities. In some cases, planned activities were no
longer relevant or had been implemented by other means by the
date that EU funds finally arrived.

39. The lack of clearly defined project outputs and purposes
means that an assessment of project effectiveness is extremely dif-
ficult. As a consequence, the different monitoring instruments did
not provide information on effectiveness:

(a) most of the progress reports presented by the project manag-
ers were a chronological description of activities achieved with
little qualitative evaluation. Little or no attention was paid to
comparing achievements with what was planned, and rel-
evance and impact were not considered;

44. Similar problems to the above were also experienced in the
Phare and Tacis programmes examined during the audit.

Evidence from programme evaluations

45. The Commission has funded several evaluations of its human
rights and democracy programmes (2), all of which have in one
way or another examined the effectiveness of the programmes.
The general findings of these evaluations are positive: they find

(1)

It was applied for the Phare democracy programme, and for the main-
stream projects financed under financial and technical cooperation.

(2) See footnote 2 on page 8.

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that the activities of the EC have been appropriate and necessary,
and that they have made a significant contribution to the process
of supporting democracy and protecting human rights in the dif-
ferent areas of the world. These evaluations confirm that, with
few exceptions, the projects financed were relevant in the context
of the problems facing the countries concerned. They also found
that the Community programmes played an important role in
supporting and strengthening NGOs. The evaluation of the Phare
and Tacis democracy programmes from 1992 to 1997, and the
evaluation of EC measures supporting human rights and democ-
racy during the period 1991 to 1993 went on to find that these
NGOs had also played an important role in furthering democratic
reform and respect for human rights.

46. The evaluations, however, also confirm some of the criti-
cisms made by the Court, for example:

(a) the evaluation of the Central American programme found
that for the human rights and democracy programmes as a
whole, the objectives, which are ambitious, are defined too
generally, and imprecisely, and priorities amongst them have
not been established. This evaluation also found that the large
— excessive — number of budget headings made implemen-
tation confusing and uncertain;

(b) two evaluations point to the difficulty of assessing effective-
ness because of the lack of indicators and information on out-
puts and results at project level;

the 14 projects examined, the Court found only one project (Nica-
raguan land property project) where the B7-7 project was fol-
lowed by a long-term support programme of the Commission.
For the other projects, there was no evidence that project activi-
ties were continuing after the end of the Commission financing,
nor that follow-on activities were implemented. According to the
documentation in the files, little attention was paid to this aspect.

48. There are also examples of NGOs which have performed
well (1), which, for example, fulfil an important role as human
rights watchdogs, and yet are unable to obtain non-EU funds to
continue their work. These are often acclaimed initiatives, and the
issue is whether the EU should, from the point of view of achiev-
ing improvements in the human rights field, end its financial con-
tribution after one or two years.

49. Also in the cases where the Commission finances NGOs
which repair deficiencies in State provision, the dilemma for the
Commission is whether or not to continue to provide substantial
funding if the State is unable to take over. In such cases, the Com-
mission should aim to obtain a commitment from the authori-
ties progressively to take over an increasing share of the costs.
Otherwise, Commission short-term support for such projects is
a humanitarian response rather than a considered step to improve
the human rights situation by achieving a structural improve-
ment.

(c) there are too many small projects, the impact of which is
diluted: the Central American evaluation found that, although
the projects may have helped to strengthen NGOs, and rein-
force their role, which is in itself a positive result, there is little
evidence of impact on wider society;

Visibility

(d) the lack of management resources, unsatisfactory systems,
concentration on operational aspects and the fine detail of
contracts rather than on policy and strategy, and delays in
implementation and disbursements have adversely affected
the implementation of the programmes.

50. Although visibility is a common goal of the Commission’s
external aid policy, the objective of greater visibility needs to be
followed up by a carefully thought out strategy on how to obtain
it. In the case of the human rights and democracy programmes,
the Commission’s approach towards visibility was in the main
limited to trying to get organisations to give credit for EU financ-
ing in publicity material.

Sustainability

47. Achieving sustainable change and sustainable NGOs requires
a long-term commitment to problem solving and a continuation
of external grants in a context where there are limited alternative
sources of funding. In general, however, the Commission paid
insufficient attention to the question of whether the activities
would continue after its financing stopped. The approach of the
Commission was primarily focused on annual financing pro-
grammes, longer-term commitments were not entered into, and
the Commission did not seek to follow up activities once its
financing had stopped. In Central America, for instance, out of

51. The Commission did not pay sufficient attention to its image
as an important, creative donor who actively supports the
democratisation processes in the countries concerned, and it often
presented an image of disorganisation and inefficiency. Absence
of a coordinated and uniform approach between the EU pro-
grammes in a given country, slow and heavy administrative pro-
cedures and the involvement of many Commission managers
dealing with project matters at different times are all situations
which have created frustration for partner organisations.

(1) For example, Grazhdansky Kontrol — citizens’ watch, and the sol-
diers’ mothers of St. Petersburg, an NGO defending the legal rights of
conscripts in the Russian army.

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52. Many of the organisations visited expressed clearly their
frustration with the Commission. Whether or not the reasons the
organisations give for their frustration are justified, the important
thing from the viewpoint of the visibility of the EU and the Com-
mission is that the positive visibility resulting from interventions
in this area is quickly diminished by the negative perception of the
Commission as an inflexible and disorganised donor.

56. Between 1994 and 1997 the EHRF received EUR 7,8 million
to carry out four major tasks on behalf of the Commission:

(a) granting small subsidies to associations of all countries tack-

ling the human rights issue;

PROGRAMME MANAGEMENT BY THE COMMISSION

Organisation and management resources

53. During the period covered by the audit, the management of
the human rights and democracy programmes was spread across
several departments of the Commission. A department in DG I.
A (1) was responsible for the programmes in central and eastern
Europe and the new independent States and provided overall
coordination through an interdepartmental group. DG VIII had a
unit responsible for these measures in the ACP States, and, for
most of the period covered, was also responsible for human rights
and democracy measures in Asia. DG I. B managed the pro-
grammes for Latin America and the Mediterranean, and in 1998
took over from DG VIII responsibility for the human rights and
democracy measures in Asia.

54. The staff resources financed from administrative appropria-
tions (Part A of the general budget) devoted by the Commission
to these programmes, both in Commission headquarters in Brus-
sels and at the Delegations, were limited (for example, for the
Latin American programme there was at times only one official
with specific responsibility for it), and considerably below opera-
tional needs. As a result, the Commission made extensive use of
external organisations as TAOs for various administrative, finan-
cial and management functions.

55. For the Phare and Tacis programmes, a large part of the
management and monitoring of the LIEN and Democracy macro-
projects was subcontracted to the Centre Européen du Volontariat
(CEV) (2) and the European Human Rights Foundation (EHRF)
respectively. These organisations were in charge of the preselec-
tion process, the preparation of contracts, the monitoring and the
pre-approval of progress and final formal reports. The Commis-
sion kept responsibility for the selection decision, the signature of
contracts and the making of payments after approval of the
reports.

(1) As part of the reorganisation of the Commission departments in
1999, a part of DG I. A and DG I. B became part of DG external rela-
tions and DG VIII became DG Development.
International association, established to coordinate, at a European
level, national organisations of volunteers for development aid.

(2)

(b) management of the ‘democracy’ macro-projects under the

Phare and Tacis programmes;

(c) making office accommodation and support staff available to

the Commission departments;

(d) payment of subsidies to NGOs which were active in the field

of human rights in Bosnia-Herzegovina.

57. All the contracts with the EHRF for this period were made
without following any invitation-to-tender procedure, even where
they involved services of a more or less commercial nature. The
Commission did not perform any audit of the EHRF’s administra-
tive expenditure, even though the latter’s legal situation remained
muddled, in particular as regards the systems it used for recruit-
ing and remunerating its staff, and its mechanisms for presenting
its accounts, especially to the Belgian authorities. Lastly, between
1994 and 1998, the statutory administrative bodies of the EHRF,
which acts virtually solely on behalf of the Commission, were not
subjected to any regular supervision, thus allowing its manage-
ment too much leeway.

58.
In November 1997 a contract was signed between the Com-
mission and a consulting company, IBF, for technical assistance
for three horizontal programmes under Phare and Tacis (3). The
tasks of IBF include concluding co-financing contracts with grant
recipients, making payments to them, the administrative follow-up
of projects, and the production of information material. Most of
the tasks contracted to IBF are thus similar to those entrusted to
the Joint Service for External Relations (SCR).

59. The Commission also established Civil Society Development
Foundations (CSDFs) in most Phare countries as independent
in-country funders. The CSDFs have, as their main activity, the
delivery of grants to local NGOs. The board of the Foundation is
typically composed of people active in civil society, and each
member is approved by the government. In Slovakia and Bulgaria,
the respective Delegations of the Commission have subcontracted
the management of the Democracy and LIEN micro-project
schemes to the CSDFs.

(3) Phare and Tacis democracy programme, Phare and Tacis LIEN pro-

gramme, Phare partnership programme.

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60. An evaluation of the CSDFs (1) found that these organisa-
tions typically had not developed strategies for achieving their
mission, nor provided a showcase for the output of the projects
that they have funded. Initiative and momentum have come
mainly from outside. The Directors of the CSDFs also need man-
agement training.

In the case of Central America, the ‘Instituto Relaciones
61.
Latino-Americanas’ (IRELA) was awarded several contracts for
studies and various activities of coordination, project identifica-
tion and monitoring covering the Commission’s human rights
and democracy programme. The resources of these contracts,
which totalled more than EUR 1 million, were used to fund dur-
ing the period 1992 to 1998 what in practice was a coordination
and monitoring unit based in the Costa Rican Delegation of the
Commission.

62. For South America, the Commission signed two service con-
tracts with a non-profit-making organisation which provided for
the production of studies and press bulletins and the organisation
of expert meetings and a seminar. In practice, however, the main
subject of these contracts was to conduct on-the-spot project
identification and monitoring missions and to assist the Brussels-
based programme unit.

63. The subcontracting of additional resources helped the imple-
mentation of the Latin American, Phare and Tacis programmes.
However, there are a number of areas of concern relating to the
Commission’s subcontracting practices:

(a) by these practices the Commission was able in effect to con-
vert budget appropriations for the programmes into staff and
other operating resources which it was denied by budgetary
constraints. In some cases, the budgetary remarks on the
headings concerned were not compatible with the terms of
the contracts;

(b) these contracts were awarded by private treaty. The Commis-
sion incorrectly applied Articles 112 to 118 of the Financial
Regulation to justify not submitting the contracts to the ACPC;

(c) persons engaged under the contracts were frequently pre-
sented to the organisations concerned by the Commission
departments. Some of them had previously been working on
temporary contracts in the departments concerned (2);

(d) by contracting out the tasks of project identification prepara-
tion and monitoring over a long period, the Commission
departments risk not acquiring a sufficient depth of knowl-
edge of the implementation of the programmes, and becom-
ing dependent on the knowledge and expertise of external
personnel;

(e) because of the lack of competitive pressure and the depen-
dence of partners on Commission financing, there is a risk of
overpricing. Indeed, in certain cases, amounts were claimed
by these organisations and paid on a lump-sum basis without
the partner providing the necessary supporting documents,
and it was found that ineligible expenses were claimed and
paid. The Commission is carrying out a detailed review of one
of these organisations (IRELA) as a result of the Court’s find-
ings.

Administrative rules, guidelines and procedures

Grants versus service contracts

64. The human rights and democracy programmes were mainly
implemented by means of grants awarded to civil society organ-
isations. However, during the period covered by the Court’s audit,
Commission rules on grant management were not well defined,
and it was found that in many cases the Commission had used
grants in circumstances where other mechanisms would have
been more correct, notably when goods or services were being
procured:

(a) many human rights and democracy projects involved the
organisation of conferences, meetings and training courses
and the production of studies. These are all areas in which it
is difficult to distinguish between grants and service contracts.
However, the Commission departments were insufficiently
aware of the need to distinguish between different contractual
and procedural forms;

(b) in its Special Report on the Palestinian elections (3), the Court
criticised the award by private treaty of contracts for the logis-
tical support of electoral observer missions. When reviewing
a sample of contracts for human rights and democracy projects
in Mozambique, Rwanda and Haiti, the Court found that six
out of the nine contracts examined were in reality service
contracts but, in all cases, contracts had been awarded by pri-
vate treaty;

(c) some of the projects examined had been given to NGOs
because it was considered that only NGOs have the appropri-
ate vocation for projects in this area. While this may well be
true for many human rights and democracy measures, it is
not necessarily the case when the measures consist of the pro-
vision of goods (such as office equipment) and services (such
as training and administration).

(1) Charities Aid Foundation (CAF), February 1997.
(2) Similar procedures were criticised by the Court in its Special Report

No 2/97 on humanitarian aid (OJ C 143, 12.5.1997).

(3) Special Report No 4/96 on the accounts of the European electoral
unit set up by the joint common foreign and security policy action
concerning the observation of the Palestinian elections (OJ C 57,
24.2.1997, paragraphs 24 to 25).

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Contracting and co-financing

operations through a single structure and organisation should, if
done properly, be a more economic, efficient and effective way of
implementing an internationally funded operation than parallel
operations.

65. Contract formats and provisions were diverse. Each Com-
mission department applied its own requirements to its partners
(accounting and reporting requirements, payment arrangements,
etc.). In some cases different contract types were used within a
Commission department to cover the same type of measures.

Financial monitoring

66. Each Commission department applied its own rules for
assessing the eligibility of costs and whether to provide core fund-
ing to organisations. In general, however, the departments sought
too often to fund what they considered to be discrete projects,
even when in practice the activities were the normal activities of
the organisation and would have been more appropriately financed
as institutional support. This led to inappropriate earmarking of
the Commission contribution and to budget and financial report-
ing requirements which shifted the focus from controls on output
to input oriented controls.

67. Within the human rights and democracy support programme
for ACP countries, the Commission made substantial financial
contributions to international operations in which several donors
participated. The Court has already highlighted the difficulties for
the Commission in the design of its projects when it is not the
sole provider of funds and has recommended that it should avoid
inappropriate earmarking (1). The cases examined during this
audit confirm the Court’s previous observations.

70. A number of significant weaknesses were identified in the
financial monitoring of the contracts by the Commission. The
rather paradoxical situation was found that, while one of the most
common and strongly expressed criticisms of the Commission by
the implementing partners concerned the heavy administrative
and financial management burden imposed on them by the Com-
mission’s procedural requirements, these same procedures failed
to avoid the following weaknesses:

(a) project budgeting was poor and did not follow standard for-
mats or definitions: this rendered monitoring and control
more difficult for the Commission departments;

(b) the rules on subcontracting and procurement were insuffi-
ciently clear; for example, the contracts managed by the depart-
ments responsible for the Latin American and Mediterranean
programmes referred only to the need to obtain three offers
for the purchase of goods and equipment, which was a mar-
ginal component for most contracts. No rules were specified
for engaging experts or project staff, or subcontracting such
matters as printing. Several examples of unsatisfactory staff
engagement policies and subcontracting were found (2);

68. The Commission department responsible explained its reluc-
tance to participate in UN trust funds because it finds such par-
ticipation’s difficult to monitor and not visible. The case of the
UN trust funds for the elections in Mozambique gave ground for
such reluctance: the financial reports were not sent until three
years after the end of the Onumoz mission and the financial state-
ments produced were summary and showed unspent balances
without indicating what would happen to unused funds. No nar-
rative report on the implementation of the elections was provided
to the Commission.

(c) budgeted amounts were treated by partners as flat rates or
lump sums for which no supporting documentation other
than declarations of expenditure needed to be supplied to the
Commission. Neither the central departments of the Commis-
sion nor the delegations, nor consultants hired by the Com-
mission to monitor the implementation checked whether
expenditure had in fact been incurred as declared. In Central
America, for instance, the Court’s auditors identified eight
projects (out of 14 examined) where final payments were
erroneous or could not be explained;

69. Despite this particularly bad case of poor performance and
failure to respect contractual obligations, the Commission should
not abandon this type of funding mechanism. As a major source
of funds for such operations, the Commission should use its
financial leverage — supported by the Member States — to ensure
that the UN establish appropriate reporting, accountability, and
auditing mechanisms with which it can be satisfied. Co-financing

(1) Annual Report concerning the financial year 1995 together with the
institutions’ replies (OJ C 340, 12.11.1996, paragraphs 11.29 to 11.57).

(d) financing of ineligible expenditure: the Commission financed
expenditure incurred before the date of signature of the con-
tract, expenditure on items not provided for under the con-
tract.

(2) For example, in one country, it was found that the same individuals
were office holders in one beneficiary organisation and were engaged
as project staff in another. One project concluded a contract with a
printer for the full budgeted amount for printing (ECU 45 000), with-
out obtaining any competitive quotes or specifying what was to be
provided under the contract. This was not identified by the Commis-
sion.

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In response to the Court’s findings in respect of the above
71.
irregularities in the Central American programme, the Commis-
sion promised to re-examine the final claims approved by the
monitoring unit. Further, in respect of a number of contracts with
one organisation, it also started in March 1999 an in-depth audit
of all the contracts awarded to this organisation, and of the sub-
sidy which the organisation had received to support its adminis-
trative expenditure.

both as an item of conditionality and as an area of intervention,
with, if necessary, additional more detailed guidelines outside the
regulation.

Improve the selection of projects and partners

72. The above findings highlight the inappropriateness of the
approach of the Commission in trying to manage the implemen-
tation of a large number of small and medium-sized contracts by
means of relatively detailed controls focused on inputs. The Com-
mission had neither the staff resources nor the systems to do this
effectively.

76. The European Union has been at the forefront in declaring
protection and promotion of human rights and democracy as pri-
orities of its development programmes and has confirmed this by
introducing these objectives within its Treaties. It needs, however,
to take further steps to put this into practice.

Feedback

73. The Commission has carried out a number of evaluations of
its human rights and democracy measures (see paragraph 45).
The evaluation of the Central American programme formed the
basis for the Commission’s revision of its approach in this area,
which resulted in the adoption of a multiannual programme at
the end of 1998. However, it is not yet clear whether the impor-
tant criticisms in this evaluation concerning the lack of prioritisa-
tion, the confusing nature of the large number of budget head-
ings under which human rights and democracy measures can be
financed, the lack of performance indicators, and the many prob-
lems resulting from the insufficient management resources and
inappropriate administrative and financial rules, have been effec-
tively addressed.

77. First, soundly based country assessments are needed in order
to define clear country strategies that lay down a framework for a
balanced and targeted project portfolio. Secondly, priorities need
to be defined to avoid scattering resources too thinly. Thirdly,
improved project and partner selection procedures need to be
consistently applied. As regards the fixing of priorities, the call for
proposals in July 1999 for the 1999 programme is an important
step in the right direction.

Define programme and project success indicators and follow
up their achievement

78. The Commission should establish objective monitoring sys-
tems both at programme and project level. For this purpose, it
should determine how it will judge whether the measures it
finances are successful or not, and develop appropriate and quan-
tifiable indicators. Progress should then be measured on a regular
basis.

74. The Court found no evidence that the evaluation of the Phare
and Tacis democracy programme published in March 1998 had a
major impact on the policy review undertaken by the Commis-
sion at the same time.

Emphasise the long-term impact of the EU support by
ensuring that measures are sustainable

CONCLUSIONS AND RECOMMENDATIONS

Simplify the legal and budgetary framework

79. Programmes that promote and protect human rights and
democracy need a medium- or long-term commitment. The Com-
mission should, therefore, move from its current practice of
financing individual, annual measures and provide a more con-
tinuing and long-term support to organisations which have the
potential to improve effectively the human rights and democracy
situation of the country.

75. The Commission should propose to the Council and the
European Parliament a simplification of the current budgetary
and regulatory framework for external aid. It would, for example,
be possible to have a limited number of ‘mainstream’ regulations
for the major programmes (e.g. MEDA, ALA, Tacis) which include
such aspects as the promotion of human rights and democracy,

80. When approving and implementing grants, the Commission
should also ensure that the beneficiary bodies strengthen their
organisational, administrative, financial and technical structures
sufficiently to allow them to continue their activities in an effec-
tive way after the EU’s financial support has stopped.

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81. Further, the Commission should continue to follow up the
activities of organisations after its financial support has ended.
This not only allows the Commission to evaluate the sustainabil-
ity of its support but can also provide direct local information on
the human rights and democracy situation.

and which provide reasonable assurance that the funds are used
correctly for the purpose for which they were granted. For medium
and larger projects, the supervision, monitoring and control func-
tions should be primarily decentralised to the delegations, which
should have the authority to contract local auditors with appro-
priate mandates to check financial implementation.

Adopt appropriate procedures to manage the grant
programmes

82. The human rights and democracy programmes consist
mainly of a relatively large number of small and medium-sized
contracts with a wide variety of organisations all over the world.
By their nature, many of the implementing partners have rela-
tively undeveloped financial management and control systems.
While the Commission is responsible, under the terms of the
Financial Regulation, for ensuring that regular and sound use is
made of the funds it grants, it is not feasible for it to exercise
detailed control over financial implementation. Nor is a solution
which relies on the use of TAOs satisfactory.

83. The Commission needs to adopt procedures which focus
more on what is achieved by the partners with the funds received,

84. For micro-grant programmes the Commission should make
use of local bodies, with the participation of the delegation for
their management. These bodies, which would have a good under-
standing of the local situation, would appraise applications and
award grants. The beneficiary organisation would report on its
use of the funds, and if the body was not satisfied, it would not
grant it funds in the future. The Civil Society Development Foun-
dations in most Phare countries provide a good example which,
if the weaknesses noted in paragraph 60 are overcome, can be
replicated elsewhere.

85. Finally, where the Commission participates in international
operations co-financed by several donors, it should encourage the
use of unified financing structures and organisation. It should use
its financial leverage, preferably supported by the Member States,
to ensure that sufficient unified reporting, accounting and audit-
ing mechanisms are built in.

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 18 May 2000.

For the Court of Auditors

Jan O. KARLSSON

President

C 230/16

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Official Journal of the European Communities

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ANNEX 1

Overview of external human rights and democracy support measures of the EU in the period 1994 to 1998

Commitments

1994

1995

1996

1997

1998

Total

Central and eastern Europe
New independent States
Human rights and democracy
Latin America
Other measures
MEDA
International Criminal Tribunal
Asian countries

14 886 616
10 000 000
14 000 000
12 999 978
8 100 000

21 977 384
10 000 000
18 993 388
14 000 000
10 903 215

24 679 401
11 000 000
19 000 000
13 980 000
13 000 000
9 000 000

24 464 547
10 000 000
16 983 120
12 620 500
12 999 900
8 000 000
3 000 000

14 731 553
7 623 789
21 380 936
10 800 000
14 498 260
9 394 072
1 849 029
2 272 681

100 739 501
48 623 789
90 357 444
64 400 478
59 501 375
26 394 072
4 849 029
2 272 681

Total

59 986 594

75 873 987

90 659 401

88 068 067

82 550 321

397 138 370

(EUR)

Payments

1994

1995

1996

1997

1998

Total

Central and eastern Europe
New independent States
Human rights and democracy
Latin America
Other measures
MEDA
International Criminal Tribunal
Asian countries

1 329 912
279 647
10 850 056
9 189 937
6 447 744

12 223 776
4 513 489
12 143 499
8 648 277
9 532 220

20 790 952
6 307 897
13 943 211
12 846 092
10 960 319
397 760

10 680 170
8 597 457
12 678 707
10 625 000
9 018 786
4 998 240
1 524 453

20 508 042
11 843 718
13 844 180
5 310 159
7 602 180
4 982 026
1 662 546
184 751

65 532 853
31 542 208
63 459 652
46 619 464
43 561 249
10 378 026
3 186 999
184 751

Total

28 097 296

47 061 262

65 246 230

58 122 812

65 937 603

264 465 203

Evolution of payments relating to the commitments of each year (1994 to 1998)

Central and eastern Europe

1994

1995

1996

1997

1998

Committed

Paid in 1994
Paid in 1995
Paid in 1996
Paid in 1997
Paid in 1998

Total paid

14 886 616
1 329 912
5 739 953
4 377 606
1 401 998
262 968
13 112 438
88 %

21 977 384

24 679 401

24 464 547

14 731 553

6 483 823
6 598 592
4 858 103
1 143 932
19 084 451
87 %

9 814 754
3 784 068
4 914 005
18 512 827
75 %

636 000
13 667 138
14 303 138
58 %

520 000
520 000
4 %

Total

1 774 178

2 892 933

6 166 574

10 161 409

14 211 553

New independent States

1994

1995

1996

1997

1998

Committed

Paid in 1994
Paid in 1995
Paid in 1996
Paid in 1997
Paid in 1998

Total paid

10 000 000
279 647
4 019 488
2 766 705
1 142 503
446 710
8 655 053
87 %

10 000 000

11 000 000

10 000 000

7 623 789

494 001
3 541 192
3 491 015
920 332
8 446 540
84 %

—
3 543 570
4 428 431
7 972 001
72 %

420 368
6 048 244
6 468 613
65 %

—
—
0 %

Total

1 344 947

1 553 460

3 027 999

3 531 387

7 623 789

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Human rights and democracy

1994

1995

1996

1997

1998

Committed

Paid in 1994
Paid in 1995
Paid in 1996
Paid in 1997
Paid in 1998

Total paid

14 000 000
6 755 994
3 338 193
1 643 436
220 874
54 816
12 013 314
86 %

18 993 388

19 000 000

16 983 120

21 380 936

6 528 538
6 480 664
1 290 081
1 125 165
15 424 449
81 %

5 434 052
5 434 052
2 248 065
13 116 169
69 %

4 463 622
7 267 256
11 730 878
69 %

3 101 381
3 101 381
15 %

Total

1 986 686

3 568 939

5 883 831

5 252 242

18 279 555

Latin America

1994

1995

1996

1997

1998

Committed

Paid in 1994
Paid in 1995
Paid in 1996
Paid in 1997
Paid in 1998

Total paid

12 999 978
5 247 995
3 891 510
2 043 084
356 872
39 455
11 578 916
89 %

14 000 000

13 980 000

12 620 500

10 800 000

3 765 776
5 446 340
1 671 127
403 334
11 286 578
81 %

5 219 547
4 174 781
1 583 373
10 977 700
79 %

4 422 220
3 283 997
7 706 217
61 %

—
—
0 %

Total

1 421 062

2 713 422

3 002 300

4 914 283

10 800 000

Other measures

1994

1995

1996

1997

1998

Committed

Paid in 1994
Paid in 1995
Paid in 1996
Paid in 1997
Paid in 1998

Total paid

Committed

Paid in 1994
Paid in 1995
Paid in 1996
Paid in 1997
Paid in 1998

Total paid

8 100 000
6 366 104
1 335 091
178 620
7 000
14 503
7 901 318
98 %

10 903 215

13 000 000

12 999 900

14 498 260

8 095 705
1 533 471
321 839
125 381
10 076 396
92 %

9 248 228
2 345 614
743 848
12 337 690
95 %

6 344 333
4 532 234
10 876 567
84 %

2 186 214
2 186 214
15 %

Total

198 682

826 819

662 310

2 123 333

12 312 046

MEDA

1994

—

1995

—

1996

1997

1998

9 000 000

8 000 000

9 394 072

397 760
3 896 219
2 370 750
6 664 729
74 %

1 102 021
2 611 276
3 713 297
46 %

—
—
0 %

Total

2 335 271

4 286 703

9 394 072

International Criminal Tribunal

1994

1995

1996

1997

1998

Committed

Paid in 1994
Paid in 1995
Paid in 1996
Paid in 1997
Paid in 1998

Total paid

Source: Sincom.

Total

3 000 000

1 849 029

1 524 453
930 546
2 454 999
82 %

732 000
732 000
40 %

545 001

1 117 029

Analysis of measures to support democracy and human rights financed from the Phare and Tacis programmes (1993 to 1998)

ANNEX 2

Type of project

Awareness

Equal rights

Phare

Tacis

857
5 345

Ad hoc
Macro
Micro
Mainstream
Management

Phare total

6 201

Ad hoc
Macro
Micro
Mainstream
Management

1 000
1 375
26

1 498
2 046

1 253

4 798

536
1 350

Tacis total

2 401

Total

8 602

1 886

6 684

Human
rights

1 908

1 908

178
17

194

2 102

(1) This category includes programmes comprising interventions in different subsectors.
Source: Court of Auditors.

Media

433
2 214

NGO
develop-
ment

2 141

Activity

Public
administra-
tion

Parliamen-
tary practice

Security
forces

Support to
trade unions

Micro
projects

Miscel-
laneous (1)

Management

Total

(1 000 EUR)

402
4 701

180
382

411

3 110

507
4 349

500
6 500

6 970

300

5 427

2 806

6 487

1 679

113 078

3 434

4 377
33 107
6 970
131 031
3 434

2 947

3 392
1 801

5 193

8 139

7 568

0
1 441
19

1 460

9 028

7 909

7 049

545
2 214

3 752

6 510

14 419

1 167
101
9

1 277

8 327

4 789

6 970

117 934

10 434

178 919

411

232
553

1 424

430

3 578
8 898

22 695

1 819
4 729

1 748

8 296

12 269
24 063
500
26 446
1 748

65 026

785

1 196

1 424

6 213

430

35 171

7 400

153 105

18 730

243 945

C
2
3
0
/
1
8

E
N

O

f
f
i
c
i
a
l

J
o
u
r
n
a
l

o
f

t
h
e

E
u
r
o
p
e
a
n
C
o
m
m
u
n
i
t
i
e
s

.

.

1
0
8
2
0
0
0

10.8.2000

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ANNEX 3

Glossary of acronyms

African Caribbean and Pacific States party to the Lomé Convention

Advisory Committee on Procurements and Contracts

Centre Européen du Volontariat

Civil Society Development Foundations

Directorate-General

European Development Fund

European Human Rights Foundation

European initiative for democracy and the protection of human rights

European Union

Institut belge de formation

Instituto Relaciones Latino-Americanas

Link Inter European NGOS

Mediterranean partnership

Non-governmental organisation

ACP

ACC

CEV

CSDF

DG

EDF

EHRF

EIDHR

EU

IBF

IRELA

LIEN

MEDA

NGO

Onumoz

UN mission in Mozambique

Phare

Community aid programme for central and east European countries

PVDALA

Pays en voie de développement Amérique Latine et Asie

SCR

Tacis

TAO

UN

Service Commun Relex

Technical assistance to the Commonwealth of Independent States

Technical assistance office

United Nations

C 230/20

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THE COMMISSION’S REPLIES

EXECUTIVE SUMMARY

local NGOs. In this way, local civil society is able to grow
in strength and build up the social fabric necessary for
democracy.

The Commission considers the Court’s report on European Union
support for human rights and democracy in third countries to be
very helpful in assessing whether Community action is justified
and identifying obstacles which will have to be overcome in order
to ensure that such action is both more transparent and more
consistent.

— Achieving greater consistency:

(a) The Commission shares the view of the Court that there
should be more systematic assessment of the human rights
and democracy situation of each beneficiary country and
reference to this in each country strategy: a fresh frame-
work for this to be done more systematically is being pre-
pared. (See also the response to paragraphs 20 to 24).

Until now, in some parts of the world the Commission
has developed country strategies in relation to human
rights and democracy. Particular attention has been given
to:

— the applicant countries for EU membership (Europe
Agreements focusing on human rights and democracy
issues as specific accession requirements),

— the ACP countries (EDF-financed human rights projects
as part of country-specific strategies and indicative
programmes).

(b) A variety of complementary methods are used for project
identification to take account of the diversity of human
rights needs and the multiplicity of situations. These meth-
ods aim to match Commission priorities with NGO
demands, given that demand-driven projects are more
likely to match the real needs of the beneficiaries (pro-
vided that the demands are presented by actual and genu-
ine stakeholders) than supply-driven projects and have,
therefore, better chances of sustainability. (See also the
response to paragraphs 25 to 28).

(c) The Commission always tries to evaluate the capacities of
the organisations selected for project funding. Sometimes,
the choice of NGOs is very limited. (See also the response
to paragraphs 29 to 31).

(b) The Commission takes a keen interest in the use of indica-
tors to measure aspects other than merely the impact and
success of human rights projects. In March 1998, it pre-
sented a communication entitled ‘Democratisation, the
rule of law, respect for human rights and good gover-
nance: the challenges of the partnership between the Euro-
pean Union and the ACP States’, which identified a num-
ber of features which could serve as indicators.
Since then, it has sought to take this research further.
However, it should be noted that analogous research car-
ried out by other organisations such as the OECD and the
High Commissioner’s Office has not so far produced any
definitive results.
When the Commission first tried to evaluate human rights
projects in the ACP countries, it was faced with a serious
problem posed by the lack of appropriate indicators. It
was only over the course of many years and through con-
ducting many evaluation exercises that it was able to iden-
tify a number of suitable criteria. (See also the response to
paragraphs 32 to 39).

(c) Certain actions cannot be assessed in terms of their sus-
tainability, as they are, or should be, temporary. Where
circumstances permit, Community-supported projects will
seek to hold discussions with the government so as to
draw up a joint strategy for improving the human rights
situation. In such cases, the aim is that projects concern-
ing democracy, the rule of law and even human rights
should gradually come to be funded by the budget of the
government in question, in so far as that is feasible. To this
end, a number of instruments are provided, budget head-
ings, financial incentives, national indicative programmes
and political dialogue, which require the collaboration of
both parties. (See also the response to paragraphs 47 to
49).

(d) The Commission agrees with the Court’s comments on
the need to increase the visibility of EU action in this
domain. (See also the response to paragraph 50.)

— Achieving greater transparency:

(a) The human rights programmes which have the greatest
impact are rarely those set up by the major European
NGOs, but tend to be small-scale projects implemented by

(e) The evaluations undertaken by the Commission were gen-
erally positive and confirmed the significant contribution
made to the process of supporting democracy and pro-
tecting human rights. (See response to paragraph 46).

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— Improving management:

(a) The Commission always tries to take appropriate steps to
meet its needs in terms of skills and resources. Working
groups have been set up to study the various options
available for outsourcing these functions.

(b) The Commission notes the insufficient distinction which
exists between grants and other types of contracts, and
has shown its intention to clarify the distinction by intro-
ducing rules for grants in the planned modifications of
the Financial Regulation. (See also response to para-
graph 64).

(c) The Commission is now taking action to standardise con-
tract provisions and financial mechanisms. (See response
to paragraphs 65 and 66).

(d) Recent simplified standard rules for procurement provide
for payments of eligible real expenses only. (See response
to paragraphs 70 and 71).

(e) Since the Court conducted its audit, the conclusions from
the evaluation of projects implemented as part of the
Phare and Tacis democracy programmes have been incor-
porated into the new Regulations (EC) No 975/1999 and
(EC) No 976/1999 (OJ L 120, 8.5.1999) which were sub-
sequently adopted. The call for proposals launched in July
1999 also takes these conclusions into account in the con-
text of the new regulatory framework.

The Court proposes that the Commission should pay greater
attention to what is achieved by its partners and obtain reason-
able assurance as to the use of the funds for the purpose for which
they were granted. The approach proposed by the Court will
require changes in management methods; this is currently under
examination as part of the reform of the Commission. The key
issue is the mismatch between funds and human resources.

INTRODUCTION

The growth in importance of policy on human rights and
democracy

tions, but also in agreements with other parties, and most notably
in Article 5 of the revised version of the fourth Lomé Conven-
tion. This component has been further strengthened in the new
partnership agreement due to be signed in June 2000.

As a result, projects often functioned as experiments to determine
whether the thinking behind them was sound and whether they
were capable of meeting needs.

The European Commission has been highly active in this field. We
should mention certain decisions of strategic significance, which
have helped define overall objectives.

— In 1995, the Commission adopted two communications:

— one which set out to summarise achievements to date and
identify priorities for future action (The European Union
and the external dimension of human rights policy: from
Rome to Maastricht and beyond (COM(95) 567 final)),

— another proposing that every agreement should contain a
clause recognising the promotion and protection of these
rights as an essential constituent of external relations.

— In March 1998, the Commission adopted a communication
entitled ‘Democratisation, the rule of law, respect for human
rights and good governance: the challenges of the partnership
between the European Union and the ACP States’, which
sought to identify possible indicators in this domain.

— Two research projects were launched, which were carried out

by the European University Institute:

— one in 1998, which produced the first overview of the
European Union’s role in the field of human rights, and
sketched out a strategy for future action,

— the other in 1989, which analysed the legal, political, insti-
tutional and philosophical dimensions of the Union’s
actions, both internal and external, so as to identify the
most urgent matters which a Community action pro-
gramme on human rights should address.

1 to 5. Community policy on human rights has developed gradu-
ally over the years. Initially, it was virtually non-existent. The
notion of human rights is entirely absent from the Treaty of Rome.
It first appears in the preamble to the Single European Act, and
was subsequently incorporated into the text of the Maastricht
Treaty. With the Amsterdam Treaty, the whole range of the Union’s
activities was made answerable to these values. At the same time,
references to human rights began to appear not only in declara-

The European Commission is preparing a new communication
on this subject for the second half of 2000.

The Commission has always been well aware of how much was
at stake in this field, and consistently undertook research to identi-
fy priorities and define strategy long before October 1999, when
the ‘guidelines’ for implementing 2000 to 2006 Phare programmes
were laid down.

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Complexity of the legal and budgetary framework

of this chapter in the 2001 preliminary draft budget (PDB). The
existing mix of 11 geographical and thematic lines (12 including
children’s rights in Chapter B7-6) would be reduced to reflect the
activities envisaged under the Regulations on a thematic basis.

6 to 9.
In view of the importance of these issues, there has been
an increasing tendency for there to be provision on human rights
and democracy in geographically-based regulations, reflecting the
need to mainstream these issues in Community policies, and
improving the cooperation with the States in human rights activi-
ties. This cooperation in support of human rights and democracy
is an essential part of the strategy to be negotiated with each
country or region for Community support.

The Commission distinguishes between the use of the budget of
Chapter B7-7 and the use of geographical cooperation pro-
grammes not in terms of the theme but the nature of the inter-
vention. In particular where there are large scale interventions,
where the role of the State as partner in the implementation of an
activity is significant, when a pilot project has to be followed up
in the context of Chapter B7-7 and exceptional results justify the
project’s continuing, or where there is a carrying forward on a
larger scale of prior pilot activity, then it is entirely appropriate
that the geographically-based budget lines be called on in the
framework of their regulations. Where, in contrast, there are rela-
tively small activities and where non-governmental organisations
are central to the activity, then it is more appropriate to draw on
Chapter B7-7.

Following the entry into force of Regulations (EC) No 975/1999
and (EC) No 976/1999, it has become clear that all future election
assistance and observation will be funded under the first pillar.
This will be done on the basis of complementarity: funding of
action in favour of a specific country should come mainly from
cooperation instruments (Lomé Convention, PVDALA, Obnova,
Phare, Tacis, etc.). Funding of thematic actions, like training,
media, civic and voter education, should come from Chapter B7-7
0. Despite the inclusion in this chapter of a specific budget line in
support of democratic transition and the supervision of electoral
processes (B7-7 0 9), the funds allocated are not sufficient to
cover all electoral assistance and observation commitments the
Community is expecting to face in each financial year. The con-
tinued use of funds allocated to cooperation instruments is thus
an imperative. Furthermore, grants from Chapter B7-7 0 are pri-
marily intended to support NGOs as well as international organi-
sations. Additional funding may of course be provided by Mem-
ber States.

EU measures in support of democracy and for the defence of
human rights

10. The Commission notes that the Court accepts the broad
nature of the policy objective and the wide variety of situations
in which such nations need to be financed.

16. Human rights cooperation with ACP countries deserves spe-
cial consideration. Over the years, a successful approach has
evolved which seeks to promote democratisation on a country-
by-country basis using B7-7 budget funds as a top-up. This use of
top-up funding has become particularly common for elections.
An April 2000 communication to the Parliament and the Council
summarises past experience in this domain, and proposes new
guidelines for future action.

Scope of the audit

18. The Commission notes that the Court recognises the action
taken in response to earlier comments relating to programmes.

STRATEGY OF THE PROGRAMMES

Country strategies

20 to 24. The Commission agrees with the Court’s proposals
regarding the need to include an assessment of the local human
rights and democracy situation in those documents which define
national priority areas for intervention. A model strategy docu-
ment is currently being drafted which could be used by all depart-
ments involved with external relations.

Project selection

To help clarify the distinction between Chapter B7-7 and Regula-
tions (EC) No 975/1999 and (EC) No 976/1999 and the geographi-
cal budget lines, the Commission is considering the restructuring

25 to 28. People’s needs relating to ‘human rights and democ-
racy’ are many and varied. To try and meet them all, a number of
project selection procedures should be used, which will vary not

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Official Journal of the European Communities

C 230/23

only according to the country in question (its history, culture,
etc.), but also according to the objectives pursued, which may be
conceived as short-medium- or long-term.

gets at the outset, and using verifiable indicators as a management
tool. Indeed a significant effort was made for most of the budget
lines of Chapter B7-7 in 1999 to introduce log-frame analysis into
financing proposals, in order to facilitate subsequent project man-
agement.

25.
It is important to give local communities the opportunity to
express their needs and priorities, within the context of a general
framework which embodies both the objectives of the relevant
Community regulations and the national priorities of the country
in question.

26. The method of calling for proposals works well in those
regions where there are many different forms of possible inter-
vention, from micro-projects to direct cooperation with national
authorities. In this context, the call for proposals allows projects
which focus on especially sensitive themes relating to the demo-
cratic context, the media and parliamentary government to be
identified now, even though their implementation is envisaged
only in the medium and long term.

27 to 28. The aim may be the same, whether in the candidate
countries, the nations of Latin America, the ACP countries or the
Mediterranean countries, namely, to help improve the human
rights situation. Yet the methods of intervention must be those
most appropriate to conditions on the ground, which will vary
widely. That is why the expert mission was chosen as the method
for identifying the particular needs of each particular situation.

Selection of implementing bodies

29 to 31. The call for proposals is a very useful approach. How-
ever, given the time required for preparation, publication, selec-
tion and approval, it is most appropriate when the projects identi-
fied are to be implemented over the medium or long term. Other
methods are also used to respond to human rights needs, espe-
cially when urgent, even immediate action is required.

With reference to central and eastern Europe in particular, the
new Phare access programme takes the development of local
NGOs into account, and requires the lead organisations with main
responsibility for the supported projects to be based in the Phare
candidate countries. European NGOs may be involved as comple-
mentary partners only.

OUTCOME OF THE PROGRAMMES

Effectiveness, relevance and impact of the measures

32 to 39. The Commission accepts that the quality of projects
and programmes may be improved by setting objectives and tar-

Whatever the value attached to verifiable indicators, it should be
emphasised that human rights projects are intrinsically difficult to
quantify.

A further virtue of focusing on project results is the bringing
together of the different partners in project implementation. It is
by discussing the project objectives between all the different
stakeholders that the ownership of the project design may be wid-
ened.

42 to 43. The Commission agrees that project implementation,
particularly in Latin America, has been slow. The problem has
been the shortage of human resources, and a failure to adapt pro-
cedures to the specific needs of the NGOs which worked on
human rights programmes.

Evidence from programme evaluations

46. The Court notes that the evaluations funded by the Commis-
sion have been generally positive; that they made a significant
contribution to the process of supporting human rights, and that
the projects were relevant and that they played an important role
in strengthening NGOs.

Sustainability

In general, the Commission has a keen interest in see-
47 to 49.
ing activities continue into the future, even after Community
funding has come to an end. It should be remembered that the
B7-7 budget line is intended for the implementation of strictly
limited interventions; only in exceptional cases would it provide
direct funding for a project’s ongoing running costs.

The Commission should certainly avoid creating situations in
which the work of grassroots organisations comes to be depen-
dent on Community action. Since the aim is to develop creativity
and support local actions in their early stages, the continued exist-
ence of such ‘pilot projects’ may best be ensured through other
more appropriate frameworks, such as cooperation.

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10.8.2000

These problems could be examined further in the near future in
the context of country strategies, and if necessary, solutions could
be formulated for the most worthwhile projects.

58. The tasks described as assigned to IBF were contracted before
the creation of the SCR. Since then, IBF’s contract has been modi-
fied, and the Commission, through the SCR, has taken responsi-
bility for concluding contracts and making payments.

Visibility

50. The Commission agrees with the Court that steps need to be
taken to raise public awareness of the Union’s activities in this
domain. These steps should include:

— firstly, harmonising the way these activities are presented, so
as to avoid confusion caused by the names of the different
programmes (Phare, Tacis, Obnova, etc.) and instead simply
referring to the European Union,

— secondly, making sure that there is a systematic strategy for
foregrounding the role of the Union in place while projects
are being negotiated and contracts drawn up, and also later on
when they are being implemented.

59. The boards of civil society development foundations should,
by definition, be independent of government, and the members
are not approved by the government (although the government
could nominate one of the board members).

60. Within the priorities identified by the Commission for Civil
Society Development Foundations, the programme is demand-
driven. Management training is already taking place but more is
certainly needed.

As fund-channelling mechanisms established by the Commission,
the CSDFs have mainly implemented civil society development
programmes approved by the Commission, for which reason it is
logical that ‘initiative and momentum have come mainly from
outside’.

PROGRAMME MANAGEMENT BY THE COMMISSION

62. Staff shortages led the Commission to make extensive use of
technical assistance contracts, and in general these were judged
useful for project identification, follow up and evaluation.

Organisation and management resources

53. The Commission agrees with the Court’s analysis of the
problems created in the past by the way in which the departments
dealing with human rights issues were organised. For this reason,
the Commission had already decided to create a single hierarchy
which would be responsible for all B7-7 budget lines, by fusing
the former Human Rights and ACP unit with the Human Rights
and Democratisation unit, within the framework of DG RELEX.

The problem of support for delegations will be examined in the
context of programming for Chapter B7-7 budget lines, and in the
communication on human rights strategy which the Commission
plans to adopt during the first half of the year.

54. The Commission fully agrees with the Court’s observations
on the insufficiency of staff resources. In September 1999, the
Commission decided to bring together in a single unit responsi-
bilities and human resources relating to Chapter B7-7, along with
those relating to human rights and democracy projects.

63.
In order to implement projects despite the shortage of human
resources, the Commission has always sought to make full use of
those means that are available to it, while taking care to comply
with all relevant rules.

The risk exists that excessive use of external consultants reduces
the extent to which the Commission services are involved in
project identification, preparation and monitoring, and that the
degree of dependence relates to the type and quantity of tasks
which have been externalised. The question is addressed in the
White Paper on reforming the Commission.

The Commission is currently carrying out an audit of IRELA
(Instituto de Relaciones Europeo). (See the response to para-
graphs 70 to 72).

Administrative rules, guidelines and procedures

Grants versus service contracts

55 to 57. The Commission is currently studying the best practi-
cable solutions which might enable sustainable externalisation of
certain types of assistance in the field of human rights which are
not the direct responsibility of the public authorities.

64. The Commission notes, as does the Court, that the distinc-
tion which exists between grants and other types of contracts is

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not clear. It has shown its intention to clarify the distinction by
introducing rules for grants in the planned modifications of the
Financial Regulation.

The services concerned will seek for standard contract forms to
be used to cover the same type of measures. Standard rules for
assessing the eligibility of costs will be established.

Many projects carried out by NGOs in the various fields of exter-
nal aid, including human rights, require a certain proportion of
inputs in the form of purchases, services and/or works. Precisely
for that reason, the Commission generally included in grant con-
tracts with beneficiary NGOs obligations on procedures to be fol-
lowed in that respect.

(a) The Commission has generalised such procedures in the stan-
dard grant contract adopted by its services in November 1999
and, at the same time, brought those rules into line with the
new rules on contract procedures for supplies, services and
works contracts in the field of external aid, adopted by the

Commission on 10 November 1999.
Contracts with BATs for the LIEN and partnership programmes
have been concluded as regular service contracts, following a
competitive tendering procedure.

(b) It is true that logistical support for human rights observers in
Rwanda was provided by GTZ, on a private treaty basis. This
decision was justified by GTZ’s quality as an organisation. Not
only was GTZ already working in Rwanda, but they had the
skills required to carry out the operation successfully. This
judgment was vindicated by the evaluations conducted both
by the Commission and by the Office of the High Commis-
sioner for Human Rights.

In addition, the need for the observers to be in place as soon
as possible, and the fact that the length of the mission (ini-
tially planned for three months) could not be accurately fore-
cast, both militated in favour of the selection method employed.

68 and 69. The Commission is considering new procedures for
its participation in international operations, such as the UN trust
funds. These procedures will cover the use of unified financing
structures and organisation with unified reporting, accounting
and auditing mechanisms.

Financial monitoring

70 to 72. The Commission is trying to manage a large number
of contracts without the requisite staff resources and systems, and
suggests that it would have been better not to rely on controls
focused on inputs. There are some occasions when it may be
more difficult to focus on outputs, especially if these are not eas-
ily quantifiable.

Simplified standard rules for subcontracting and procurement are
included in the new Relex standard grant contract; which also
makes it clear that only real costs are considered as eligible and
clarifies which costs are eligible.

In the light of the Court’s observations, the Commission is now
carrying out an audit, the results of which will be available at a
later date.

Contracting and co-financing

Feedback

65 and 66. The Commission recognises the fact that contract
provisions and the financial mechanisms contained therein were
not sufficiently standardised. It has put an end to that situation by
introducing in November 1999 the abovementioned standard
grant contract, which became mandatory for its services from
1 January 2000.

As for core funding, the Commission is actively considering this
issue in the more general context of its relations with NGOs and
the financing of their activities, and will proceed to the necessary
clarification on that basis. There is a reference to this in para-
graph 3.1 of the discussion paper submitted to the Commission
by the President and Mr Kinnock on 18 January 2000, entitled
‘The Commission and non-governmental organisations: building
a stronger partnership’.

73. This evaluation inspired the extension to other regions of
some of the instruments applied in central and eastern Europe
under such programmes. It also inspired the modalities of their
implementation. It contributed to the design of the Access pro-
gramme and the assessment of the LIEN programme.

CONCLUSIONS AND RECOMMENDATIONS

Simplify the legal and budgetary framework

75. The Commission does not share the view that a simplifica-
tion of the current budgetary and regulatory framework should
limit the regulatory basis for human rights activity to that

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provided by the geographical regulations alone. Nor does it believe
that a regulation for human rights and democracy activities pro-
vides adequate cover for the efforts in this field which the Treaty
envisages. Both are required to give full effect to the Treaty provi-
sions. (See also the response to paragraphs 6 to 9).

the OECD and the Office of the High Commissioner for Human
Rights as well. It will require much careful thought, as the aim is
not simply to measure the impact and effectiveness of a particular
project, but also the evolution of the overall situation throughout
a given country.

Improve the selection of projects and partners

As previously stated, the Commission accepts that the quality of
projects and programmes may be improved by setting objectives
and targets at the outset, and using verifiable indicators as a man-
agement tool.

76 and 77. The Commission agrees with the Court that the
country-specific strategic approach should be extended. This could
be achieved by an ongoing dialogue with both government and
civil society in the case of democratic countries, following on
from an ex ante study of the situation.

The costs in terms of management of systemic monitoring can be
very great. The Commission believes that sound sampling sys-
tems are part of an appropriate monitoring system.

Calls for proposals should, as far as possible, be conceived within
the context of a country-specific strategy.

Emphasise the long-term impact of the EU support by
ensuring that measures are sustainable

The Commission believes that there is a delicate balance to be
struck between selection of projects on the basis of their priority,
and the use of calls for proposals as a way to improve project and
partner selection procedures. It is for this reason that it believes
that there should be a complementary set of instruments for the
use of Chapter B7-7. The call for proposals offers a transparent
way to mesh the priorities of the Community with the selection
of good projects ‘owned’ by the implementing partners. But the
projects selected can only be medium and long-term. This implies
that such projects should never be designed to meet short-term
needs.

79 to 81. The Commission agrees on the desirability of follow-
ing up the activities of organisations after EC financial support
has ended. In so far as resources permit, this will be borne in
mind in future.

Community policy vis-à-vis non-member States emphasises the
capacity of organisations to help create democratic structures. If
a contribution is made through a European NGO working in
partnership with local actors (co-financing), this can create oppor-
tunities both to build capacities and to provide training. This is
the Commission’s preferred mode of intervention, and we believe
its use should be extended further.

For particularly urgent activities, the selection of targeted projects
remains desirable: to take an example from ACP cooperation, the
allocation of funds from Chapter B7-7 may be used as an incen-
tive for larger amounts to be programmed for the same ends from
mainstream geographical programmes.

Adopt appropriate procedures to manage the grant
programmes

It would be difficult for the Commission to follow the Court’s
suggestion and apply the procedure of competitive tendering to
civil society projects proposed by small organisations working in
emerging democracies. This procedure is more suitable for large-
scale projects.

83. The Commission is considering further decentralisation of
supervision, monitoring and control functions to Delegations in
respect of medium and larger projects. The Delegations will be
able to obtain the authority to contract local auditors with appro-
priate mandates to check the financial implementation of the
projects.

Define programme and project success indicators and follow
up their achievement

84. The Commission is considering further measures to allow
Delegations to manage micro-grant programmes through local
organisations.

78. Creating reliable analytical indicators is a complex task, and
one which is currently exercising not only the Commission, but

85. The Commission is considering new procedures for EU par-
ticipation in international operations.

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82 to 85. The Commission believes that a varied approach has
been unavoidable in the circumstances, and has indeed been a
means of ensuring more fitting responses in particular circum-
stances.

There is no doubt that the Financial Regulation needs updating as
a tool for management of such projects.

The Court recognises that the Commission should focus more on
what has been achieved by its partners with the funds received.
Results-focused management, along with greater decentralisation,
may well be the way forward. However, the mismatch between
funds and human resources, in the face of the tasks undertaken,
remains a key constraint.