Regulation (EC) No 1726/2000 of the European Parliament and of the Council of 29 June 2000 on development cooperation with South Africa
Date: 2000-06-29
Institutions: Council of the European Union, European Parliament
Subjects: South Africa, cooperation policy, development aid, economic reconstruction, financial cooperation, technical cooperation

4.8.2000

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(Acts whose publication is obligatory)

REGULATION (EC) No 1726/2000 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 29 June 2000

on development cooperation with South Africa

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

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

Having regard to the proposal from the Commission (1),

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

Whereas:

Since the elections of April 1994 and the establishment
of a democratic government, the Community has turned
for the policies and
towards a strategy of support
reforms undertaken by the South African authorities.

The Council adopted Regulation (EC) No 2259/96 of 22
November 1996 on development cooperation with
South Africa (3);
that Regulation expired on 31
December 1999.

The Agreement on trade, development and cooperation
between the European Community and the Republic of
South Africa stipulates in Chapter VII thereof that finan-
cial assistance in the form of grants is to be covered by a
special
the
Community budget, that the Community declares its
willingness to maintain its financial cooperation with
South Africa at a substantial level, and that it will take
the necessary decisions in this respect on the basis of a
proposal by the Commission.

established

financial

facility

under

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

Community development aid programme regarding
South Africa (1986 to 1996), development cooperation
with South Africa should be continued subject to adap-
tations, in particular as regards simplification of proced-
ures, greater focus on sectoral priorities and decentral-
ised decision-making.

Assistance provided under this Regulation should be
implemented in coherence with actions of other donors,
institutions.
including multilateral

The measures necessary for the implementation of this
Regulation should be adopted in accordance with
Council Decision 1999/468/EC of 28 June 1999 laying
down the procedures for the exercise of implementing
powers conferred on the Commission (4).

This Regulation lays down, for the entire duration of the
programme, a financial framework constituting the prin-
cipal point of reference, within the meaning of point 33
of the Interinstitutional Agreement between the Euro-
pean Parliament, the Council and the Commission of 6
May 1999 on budgetary discipline and improvement of
the budgetary procedure (5), for the budgetary authority
during the annual budgetary procedure.

Council Regulation (EC, Euratom) No 2988/95 of 18
the European
December 1995 on the protection of
a
establishes
Communities'
financial
common legal framework in all fields related to the
Communities' own resources and expenditure.

interests (6)

Council Regulation (EC, Euratom) No 2185/96 of 11
November 1996 concerning on-the-spot checks and
inspections carried out by the Commission in order to
protect the European Communities' financial
interests
against fraud and other irregularities (7) applies to all
areas of the Communities' activity without prejudice to
the provisions of the Community rules specific to the
different policy areas,

The abovementioned Agreement contains in Chapter V
thereof provisions on aims, priorities, methods and
implementation of development cooperation with South
Africa.

(10)

In the light of the implementation of Council Regulation
(EC) No 2259/96 and of Special Report No 7/98 of the
the European
Court of Auditors

in respect of

(1) OJ C 21E, 25.1.2000, p. 1.
(2) Opinion of the European Parliament of 5 May 1999 (OJ C 279,
1.10.1999, p. 192), Council Common Position of 28 February
2000 (OJ C 128, 8.5.2000, p. 51) and Decision of the European
Parliament of 16 May 2000 (not yet published in the Official
Journal). Decision of the Council of 13 June 2000.

(3) OJ L 306, 28.11.1996, p. 5.

(4) OJ L 184, 17.7.1999, p. 23.
(5) OJ C 172, 18.6.1999, p. 1.
(6) OJ L 312, 23.12.1995, p. 1.
(7) OJ L 292, 15.11.1996, p. 2.

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HAVE ADOPTED THIS REGULATION:

Article 1

Aims

The Community shall
financial and technical
implement
cooperation with South Africa to support the policies and
reforms carried out by the South African authorities in a
context of policy dialogue and partnership.

The aim of the Community cooperation programme, entitled
the ‘European Programme for Reconstruction and Develop-
ment in South Africa’ (EPRD), shall be to contribute to South
Africa's harmonious and sustainable economic and social
development, through programmes and measures designed to
reduce poverty and encourage economic growth which benefits
the poor, and to its continued integration into the world
economy, and to consolidate the foundations laid for a demo-
cratic society and a State governed by the rule of law in which
human rights and fundamental freedoms are fully respected.

This will be achieved through support for international targets
and policies for sustainable development based on UN conven-
tions and resolutions, thereby contributing to the target of
reducing by at least one half the proportion of people living in
extreme poverty by 2015.

Article 2

Areas of cooperation

the needs of

1.
Programmes shall focus on the fight against poverty, take
the previously disadvantaged
into account
communities and integrate gender and environmental dimen-
sions of development. In all these programmes special atten-
tion shall be paid to the strengthening of institutional capaci-
ties.

Development cooperation to be carried out under this

2.
Regulation will focus mainly on:

(a) support for policies, instruments and programmes aiming
at the continued integration of the South African economy
into the world economy and trade, for employment crea-
tion, development of the private sector, regional coopera-
tion and integration. In this latter context, special attention
will be given to providing support
for the adjustment
efforts occasioned in the region by the establishment of the
free-trade area under the Trade, Development and Coopera-
especially in the Southern African
tion Agreement,
interest
Customs Union. Promotion of mutual general
cooperation between the European Union and South
African businesses may also be considered;

(b) improvement of living conditions and delivery of basic

social services;

(c) support

to democratisation,

the protection of human
rights, sound public management,
the strengthening of
local governments and the involvement of civil society in
the development process.

Dialogue and partnership between public authorities and
3.
non-governmental development partners and actors will be
promoted.

Article 3

Eligibility of cooperation partners

Cooperation partners eligible for financial assistance under this
Regulation shall be national, provincial and local authorities
and public bodies, non-governmental organisations
and
community-based organisations,
regional and international
organisations, institutions and public or private operators. Any
other body may be eligible if so designated by both parties.

Article 4

Means, expenses,

information on the programme and

coordination

1.
The means that may be deployed under the cooperation
operations referred to in Article 2 shall include in particular
studies, technical assistance, training or other services, supplies
and works, and also evaluation and monitoring audits and
missions.

Community financing in local or

foreign currency,
2.
depending on the needs and nature of the operation, may
cover:

(a) government budget expenditures to support reforms and
policy implementation in the priority sectors identified
through a policy dialogue, using the most appropriate
instruments including the form of direct targeted budget
support in specific sectors where appropriate conditions
(e.g. accountability for, and transparency of, the govern-
ment budget, sound procurement procedures) are met;

(b) investment and equipment;

(c) in duly justified cases,

and in particular where

a
programme is implemented by a non-government partner,
taking into account the fact that the programme has to aim
as much as possible at long term sustainability, recurrent
expenditure (including administrative, maintenance and
operating costs).

Part of the financing may be channelled towards targeted final
beneficiaries (e.g. emerging entrepreneurs) through specialised
financial institutions, including the European Investment Bank,
in the form of risk capital or other instruments. The resources
made available under this Regulation shall not be used in a
manner that will permit unfair competition.

A financial contribution from the partners referred to in
3.
Article 3 shall in principle be required for each cooperation
operation. That contribution will be requested in accordance
with the possibilities of the partners concerned and depending
on the nature of each operation. It shall be sought in particular
is designed as a start-up for an
in cases where a project
open-ended activity,
in order to ensure the sustainability of
such projects after Community funding has ceased. It may be
in kind. In specific cases where the partner is either a non-
governmental organisation or a community-based organisation,
the contribution may not be required.

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The Commission may take any appropriate step to ensure
4.
that the Community character of aid provided under this Regu-
lation is made known.

Opportunities may be sought for potential co-financing
financing with other donors, particularly the

5.
and parallel
Member States.

6.
In order to achieve the objectives of coherence and
complementarity referred to in the Treaty and with the aim of
guaranteeing optimal effectiveness of the aid, the Commission
shall take all necessary coordination measures, notably:

(a) the establishment of a system for the systematic exchange
of
information on actions financed or planned to be
financed by the Community, the Member States and the
EIB;

(b) on-the-spot coordination of

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

7.
The Commission, in liaison with the Member States, will
seek to take any steps necessary to ensure adequate coordina-
tion with other donors concerned and to encourage an increas-
ingly active role of the beneficiary country in the aid coordina-
tion process.

Article 5

Form of financial support

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

Article 6

Programming

1.
Triennial indicative programming shall be carried out in
the context of close contacts with the South African Govern-
ment and taking account of the results of the coordination
referred to in Article 4(6) and (7). The indicative programming
process will fully respect the principle of recipient-led program-
ming.

2.
In order to prepare for each programming exercise, in the
context of
increased coordination with the Member States,
the Commission shall draw up a
including on the spot,
Country Strategy Paper in dialogue with the South African
government. This Country Strategy Paper shall
take into
account the results of the most recent overall evaluation of
operations financed under Regulation (EC) No 2259/96 and
under this Regulation and of other regular evaluations of
operations. It will be linked to a problem-oriented analysis, and
integrate cross-cutting issues such as poverty reduction, gender
equality, environment and sustainability. A draft of the Trien-
Indicative Programme will be annexed to the Country
nial
Strategy Paper. A limited number of sectors of cooperation
based on the areas identified in Article 2 of this Regulation will
be selected. For these sectors, modalities and accompanying
measures will be set out. As far as possible performance indica-
tors will be developed in order to facilitate the implementation
of the objectives and its evaluation of impact.

The Country Strategy Paper and the draft Triennial Indicative
Programme will be examined by the Committee referred to in
Article 8(1), hereafter referred to as the ‘Committee’.

The Committee shall give its opinion in accordance with the
procedure in Article 8(2).

3.
The Triennial Indicative Programme, will be negotiated
and signed by the Commission and the South African Govern-
ment. The final result of the negotiations will be sent to the
Committee for information.
If requested by one or more
Committee members, this document will be discussed by the
Committee.

4.
The Committee shall once a year review the functioning,
results and continued relevance of the Country Strategy Paper
and the Triennial Indicative Programme. If evaluations or other
relevant developments so indicate, the Committee may invite
the Commission to negotiate with the South African Govern-
ment amendments to the Triennial Indicative Programme.

5.
The Committee shall once a year, on the basis of a
presentation by the Commission, discuss the general guidelines
for the operations to be carried out in the year ahead.

Article 7

Procedures

1.
The Commission shall be responsible for appraising,
taking decisions on and managing operations conducted under
this Regulation, in accordance with the budgetary and other
procedures in force, notably those laid down in the Financial
Regulation applicable to the general budget of the European
Union.

In the specific case of contribution of

2.
the EPRD to
regional programmes in the Southern African Development
Community area financed from the European Development
Fund,
this contribution may be utilised following Lomé
Convention modalities, provided that the provisions of the
Financial Regulation applicable to the general budget of the
European Union are respected.

In order to ensure transparency and achievement of the
3.
objectives referred to in Article 4(6), the Commission shall
forward project information sheets to the Member States and
their local representatives for all projects as soon as the
decision to appraise them has been taken. The Commission
shall subsequently update the project information sheets and
forward them to the Member States.

4.
All financing agreements or contracts concluded under
this Regulation shall provide for on-the-spot checks by the
Commission and the Court of Auditors in accordance with the
usual arrangements established by the Commission pursuant to
the rules in force, in particular those laid down in the Financial
Regulations applicable to the general budget of the European
Union.

The measures taken by the Commission in accordance with the
in Article 8 shall provide for adequate
procedure set out
protection of
the Community in
conformity with Regulation (EC, Euratom) No 2988/95.

the financial

interests of

5. Where operations give rise to financing agreements
between the Community and South Africa, such agreements
shall stipulate that taxes, duties and charges shall not be borne
by the Community.

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Participation in invitations to tender and contracts shall
6.
be open on equal terms to all natural and legal persons in the
Member States, South Africa and the other ACP States. Partici-
pation may be extended to include other countries in duly
substantiated cases and in order to ensure the best cost-effec-
tiveness ratio.

7.
Supplies shall originate in the Member States, South
Africa or the other ACP States. In duly substantiated excep-
tional cases, they may originate in other countries.

8.
Except as otherwise indicated in this Regulation, contracts
shall be signed by the South African Government. In addition,
if a contract is not covered by a financing agreement, the
contract shall be concluded by the Commission.

Article 8

Committee

1.
The Commission shall be assisted as appropriate by the
geographically-determined committee competent for develop-
ment.

2. Where reference is made to this paragraph, Articles 4 and
7 of Decision 1999/468/EC shall apply, having regard to
Article 8 thereof.

The period referred to in Article 4(3) of Decision 1999/468/EC
shall be set at one month.

3.

The Committee shall adopt its rules of procedure.

the Commission shall

4.
In the case of programmes approved by the Committee
and financed through tranches relating to more than one
budget year,
take on a yearly basis
subsequent financing decisions, not exceeding the determined
maximum expenditure for
the approved programme and
within the limits of the financial resources made available by
the budgetary authority, without further communication to the
Committee.

5.
The procedure defined in this Article shall apply to
financing decisions which the Commission intends to take
concerning projects and programmes of a value of over EUR 5
It shall also apply to any adjustment of such an
million.
operation involving an increase of more than 20 % in the
amount initially agreed, and proposals arising for substantive
amendments in the execution of a project for which a commit-
ment has already been made.

6.
The Commission shall inform the Committee succinctly
of financing decisions it intends to take concerning projects
and programmes of a value up to EUR 5 million. Such infor-
mation shall be given at least one week before the decision is
taken.

Article 9

Monitoring and evaluation

1.
After each financial year the Commission shall submit an
annual report on implementation of this Regulation to the
European Parliament and the Council. The report shall set out

the budget turnout with regard to commitments and payments
and the projects and programmes financed in the course of the
year. It shall contain statistics on contracts awarded for imple-
menting projects and programmes.

In addition the Commission shall monitor progress against
each operation's objectives in terms of outputs and outcomes,
using objectively verifiable indicators.

The Commission shall

improving the effectiveness of

regularly evaluate operations
2.
financed by the Community to determine whether those opera-
tions' objectives have been reached and to establish guidelines
for
future operations. The
to the Committee referred to in
Commission shall submit
Article 8(1) a summary of the evaluations made. The evaluation
reports shall be available to any Member State, to the European
Parliament and to other interested parties.

The Commission shall submit to the European Parliament
3.
and the Council a mid-term review by 31 October 2003 at the
latest and an overall evaluation of the programme prior to the
expiry of this Regulation.

The mid-term review will bear on results of the first Triennial
Programme (2000 to 2002) implemented under this Regula-
tion. If necessary, the Commission will propose amendments to
this Regulation, taking into account the implications for South
Africa of the new ACP/EU arrangements.

The overall evaluation will make suggestions for the continua-
tion of development cooperation with South Africa.

Article 10

Financial reference amount

1.
The financial framework for the implementation of this
Regulation for the period from 2000 to 2006 is hereby set at
EUR 885,5 million.

The annual appropriations shall be authorised by the budgetary
authority within the limits of the financial perspective.

Each year the budgetary description will fix a ceiling
2.
within the annual appropriation for
technical assistance
contracts to be concluded by the Commission for the carrying
the
joint operations
out of
Community and of the beneficiary.

the mutual benefit of

for

Article 11

Duration

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

It shall expire on 31 December 2006.

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

Done at Luxembourg, 29 June 2000.

For the European Parliament

The President

N. FONTAINE

For the Council

The President

M. MARQUES DA COSTA