Report from the Commission - (Humanitarian Aid Office-ECHO) - Annual Report 2003 {SEC(2004)1099}
Date: 2004-09-03
Institutions: European Commission
Subjects: ECHO, activity report

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 03.09.2004 
COM(2004)583 final 

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REPORT FROM THE COMMISSION 

(Humanitarian Aid Office-ECHO) 
Annual Report 2003 

{SEC(2004)1099} 

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TABLE OF CONTENTS 

1. 

2. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

3.6. 

3.7. 

3.8. 

3.9. 

4. 

General Policy Aspects ................................................................................................ 3 

Overview of ECHO’s Humanitarian Operations ......................................................... 4 

Horizontal issues .......................................................................................................... 5 

Contractual relations with partners .............................................................................. 5 

Relations with major humanitarian partners and non – EU donors ............................. 5 

Relations with other Community Institutions .............................................................. 5 

Strategic planning, policy management tools and information systems ...................... 5 

Cross-cutting strategic priorities: LRRD, children and disaster preparedness ............ 6 

Thematic Funding ........................................................................................................ 7 

Training and Studies .................................................................................................... 7 

Communication and Information ................................................................................. 7 

Budgetary and human resources, audit and evaluation................................................ 7 

Outlook and Perspectives............................................................................................. 8 

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1. 

GENERAL POLICY ASPECTS  

Following its needs-based approach to humanitarian crises ECHO adapted its funding patterns 
to  the  global  evolution  of  humanitarian  needs.  The  main  beneficiaries  of  ECHO  aid  were 
populations  in  Africa  (€  225  million),  followed  by  Asia/Latin  America  (€  224.  2  million). 
Important  funding  was  also  provided  to  the  Occupied  Palestinian  Territories  given  the 
deterioration  of  the  humanitarian  conditions.  As  for  the  Newly  Independent  States,  the 
humanitarian  situation  of  the  Chechen  population  had  not  improved.  Funding  levels  thus 
remained  high  (€26  million).  Low  funding  levels  for  operations  in  Europe  (€7.7  million) 
reflected, as foreseen, the phase-out in the Balkans.  

Programming  was  guided  by  the  global  needs  assessment,  a  ranking  across  130  developing 
countries1.  EU  Member  States,  other  donors  and  partners  broadly  shared  this  assessment. 
Applying  it  to  the  2003  budget  allocation,  64  %  (€  347.6  million)  of  ECHO’s  budget2  was 
spent in areas of highest needs, as compared with 49% in 2002. 

ECHO’s  annual  aid  strategy  2003  underlined  its  continued  focus  on  forgotten  crises  where 
there  is  little  interest  from  public  opinion  and  other  donors.  Forgotten  crises  identified 
included  Western  Sahara,  Democratic  Republic  of  Congo,  Myanmar/Burma,  Angola, 
Burundi, Northern Korea, Philippines, Northern Caucasus (Chechnya), Thailand, Uganda and 
Yemen.  The  total  support  allocated  to  those  crises  was  €119  million,  roughly  20  %  of  the 
budget (+ 4% compared to 2002). 

ECHO was a key player promoting the adoption of the “Principles and Good Practices of 
Humanitarian  Donorship”  by  the  world´s  leading  humanitarian  donors  and  organizations 
(Stockholm, June 2003). These principles confirm ECHO´s basic rationale that humanitarian 
funds  should  be  allocated  according  to  needs.  They  also  affirm  the  primary  role  of  civilian 
organisations  in  implementing  humanitarian  action,  calling  on  donors  to  support  the  1994 
Guidelines on the Use of Military and Civil Defence Assets in Disaster Relief and the 2003 
Guidelines  on  the  Use  of  Military  and  Civil  Defence  Assets  to  Support  United  Nations 
Humanitarian activities in Complex Emergencies (MCDA guidelines).  

The  draft  Constitutional  Treaty  provided  for  a  specific  provision  on  humanitarian  aid.  It 
became part of the European Council’s agreement on the Constitutional Treaty of June 2004, 
reaffirming  that  humanitarian  aid  operations  shall  comply  with  international  law  and  the 
principles of impartiality, neutrality and non-discrimination.  

While  maintaining  a  broad  dialogue  with  the  humanitarian  NGOs  on  crucial  humanitarian 
issues, ECHO demonstrated its commitment to close donor co-ordination by participating in 
the UN Consolidated Appeal Process (CAP) and supporting International Red Cross and Red 
Crescent  Movement  Appeals.  In  2003  ECHO  chaired  the  annual  meeting  of  the  principal 
donors of ICRC and hosted the launch of the UN CAP in Brussels.  

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2 

For details cf. http://europa.eu.int/comm/echo/information/strategy/index_en.htm 
Under  this  methodology  8%  of  ECHO’s  total  budget  in  2003  is  allocated  to  other  activities/priorities 
which  support/complement  core  humanitarian  activities  (DPP,  thematic  funding,  technical  assistance, 
audits, evaluation, information). 

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2. 

OVERVIEW OF ECHO’S HUMANITARIAN OPERATIONS 

The global humanitarian situation in 2003 remained bleak. Civilians continued to be the main 
target and victim of conflicts. The number of IDPs remained at 25 million globally. Although 
refugee  numbers  dropped  after  the  return  of  2  million  civilians  to  Afghanistan,  this  did  not 
lead to lower humanitarian needs, as returnees also require assistance. With respect to natural 
disasters,  the  World  Disasters  Report  2003  concluded  that,  globally,  the  number  of  such 
disasters  has  significantly  increased  since  1990.  Although  the  number  of  people  killed  by 
natural disasters decreased, there were more people affected and in need of humanitarian aid. 

ECHO  response  to  humanitarian  crises  was  channelled  through  100  funding  decisions 
amounting to € 600.3 million, € 586.2 million financed through the Commission budget and € 
14.1  million  drawn  from  EDF  funds.  Based  on  an  available  amount  of  €600.7  million  this 
reflects  a  99%  implementation  rate  of  commitment  appropriations.  The  table  below 
summarizes the geographical distribution of funding decisions in 2003: 

Unit/Region 

Amounts (´000 €) 

% (rounded) 

Echo-1: Africa, Caribbean, Pacific 

225,285 

38 % 

Horn of Africa 

Great Lakes 

West Africa 

Caribbean, Pacific, Indian Ocean 

Southern Africa 

50,700 

88,000 

33,185 

1,400 

52,000 

Echo-2: Eastern Europe, NIS, Mediterranean, Palestinian Territories 

94,003 

16 % 

NIS (Chechnya, Caucasus, Tajikistan, …) 

Western Balkans 

Palestinian Territories 

Mediterranean countries 

Echo-3: Asia, Iraq, Latin America 

Asia 

M. East/North Africa/Iraq 

Latin America 

Dipecho- Disaster Preparedness 

Thematic funding 

Technical Assistance (experts & imprest accounts) 

Support Expenditure (audits, evaluation etc.) 

39,200 

7,660 

38,000 

9,143 

116,949 

97,139 

10,111 

224,199 

37 % 

12,000 

23,196 

16,917 

4,749 

2 % 

4 % 

2 % 

1 % 

TOTAL 2003 

600,349 

100 % 

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3. 

HORIZONTAL ISSUES 

3.1. 

Contractual relations with partners  

ECHO’s  relationships  with  its  partners  became  governed  by  new  legal  frameworks  that 
comply  with  the  Financial  Regulation  in  force  since  1  January  2003  and  focus  on  clear 
objectives and indicators to measure the results of funded operations. The EC/UN Financial 
and Administrative Agreement (FAFA) covering contractual relations between ECHO and the 
UN and the Framework Partnership Agreements (FPA) with non-governmental organisations 
and international organisations (ICRC, IFRC) were finalised and entered into force.  

As of 31 December 2003, 177 partners had signed or were in the process of signing the FPA. 

3.2. 

Relations with major humanitarian partners and non – EU donors 

ECHO discussed strategic priorities with major partners in the framework of seven Strategic 
Programming Dialogues (SPD) held until December 2003.  

As U.S. and EU humanitarian aid together account for the lion´s share of global humanitarian 
assistance, well-functioning contacts and good co-ordination between ECHO and the relevant 
U.S.  authorities  are  essential.  Regular  exchanges  of  information  (telephone,  video-
conferences) between ECHO’s Director and her US counterparts have been established. 

3.3. 

Relations with other Community Institutions 

The European Parliament positively assessed ECHO’s progress towards effective aid delivery, 
simplification of procedures and sound financial management in the period 2000 - 2001 in a 
report  adopted  in  January  2003  (A5-0433/2002).  Following  the  commitment  to  regularly 
attend  parliamentary  meetings,  ECHO’s  Director  participated  in  6  meetings  of  the 
Development Committee and in one meeting of the Foreign Affairs Committee.  

Concerning  Member  States,  the  Humanitarian  Aid  Committee  (HAC)  provided  favourable 
opinions on 42 draft financial decisions and discussed around 55 strategy and/or policy issues. 
Various initiatives were also organised to integrate the acceding countries into the work of the 
HAC. In addition to its formal meetings, the HAC met twice in the capital of the respective 
EU Presidencies to informally discuss policy issues of general interest. 

3.4. 

Strategic planning, policy management tools and information systems  

ECHO  implemented  the  Commission  Strategic  Planning  and  Programming  cycle,  further 
integrating Activity Based Management principles into its planning process. ECHO lays down 
its strategic programming principles in its Annual Aid Strategy. This document results from 
an intensive consultation process, involving other Commission Services, Member States, the 
European Parliament and partners. Identified strategic priorities are translated into operational 
objectives/indicators  in  the  ECHO  Annual  Management  Plan.  In  2003  new  reporting 
guidelines  were  also  prepared  for  ECHO  field  offices,  following  performance-based 
management principles.  

ECHO  undertook  a  mid-term  review  (June  2003)  of  its  Annual  Aid  Strategy/Annual 
Management  Plan  to  have  a  systematic  feedback  on  progress  made  on  its  objectives.  Its 
results were fed back to ECHO staff during an annual staff seminar and to Member States. 

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For  the  third  consecutive  year  the  Global  Needs  and  the  Forgotten  Crises  Assessment  was 
used to guide the planning process. However, full methodologies enabling the assessment of 
the impact of child-related activities could not be developed as foreseen. The main reason for 
the delay lies in the shortage of human resources and on the conceptual challenges linked to 
impact  assessment.  Nevertheless,  ECHO  developed  interim  methodologies  for  reporting  on 
children.  

Work  on  the  “Humanitarian  Office  Local  Information  System”  (HOLIS)  project  led  to  the 
adaptation of the Information Technology (IT) environment for the decision procedures and 
the new FPA framework. NGOs can now submit their applications via internet. The upgrade 
of  the  IT  application  to  manage  information  on  Member  States’  financial  donations  (“14 
points”) now automatically integrates information on ECHO decisions and transfers it to UN-
OCHA. Work on the development of the “Fichop3” application progressed.  

3.5. 

Cross-cutting strategic priorities: LRRD, children and disaster preparedness  

Significant  progress  was  made  in  the  area  of  linking  relief,  rehabilitation  and  development 
(LRRD).  ECHO’s  phase-out  from  Former  Yugoslav  Republic  of  Macedonia,  Serbia, 
Armenia,  Kenya,  and  Mexico  was  completed  as  foreseen.  Partial  phase-outs  or  sectoral 
handovers  have  been  achieved  in  Afghanistan,  Cambodia,  Colombia,  DR  Congo,  India, 
Malawi, Sierra Leone, Sudan, and Tanzania. Set-backs such as in Eritrea were compensated 
by improvements in other areas (e.g. Malawi).  

Apart from this, numerous improvements have been made, such as joint assessment missions 
with other Commission Services or awareness raising measures such as an LRRD workshop 
organized  by  ECHO,  involving  70  Commission  officials  and  participants  from  the  UN,  the 
Red Cross and NGOs. ECHO will also benefit from its engagement in an LRRD/DPP Inter-
Service Group established in 2003 suggesting practical steps for LRRD in eight countries and 
two regions. 

As regards ECHO’s activities in relation to children and disaster preparedness and prevention 
(DPP), an interim methodology to report on results was developed, which enables ECHO to 
highlight that out of 100 funding decisions in 2003 

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55 included support to child-related activities and 102 contracts focused on/included 
child  related  activities  (e.g.  therapeutic  feeding,  vaccination,  re-integration  of  child 
soldiers) for a total amount of € 85.7 million. In addition, research activities related 
to children were supported (children in armed conflict).  

24  included  support  to  disaster  preparedness  activities  and  63  contracts  focused 
on/included DPP related activities (e.g. early warning systems and capacity building 
of  local  communities)  for  a  total  amount  of  €  24.1  million.  In  addition,  ECHO’s 
disaster  reduction  policy  was  evaluated,  which  improved  priority  setting  and 
benchmarking within its DPP activities. 

The  FichOp  (Fiche  Opérationnelle)  is  ECHO’s  operational  tool  for  following  up  humanitarian  aid 
projects. 

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3.6. 

Thematic Funding 

Given  the  increased  need  to  promote  quality  humanitarian  aid  in  a  changing  environment, 
ECHO  started  to  pilot  a  thematic  funding  approach.  Four  thematic  funding  decisions 
supporting the special mandates of specific partners (UNHCR, ICRC, UNICEF, OCHA) were 
taken. Thematic contributions aim at strengthening the response capacity of the humanitarian 
community, including staff security.  

3.7. 

Training and Studies 

ECHO financed a study on man-made crises and their effects on displacement. Its results will 
be  used  to  facilitate  early  warning  and  the  design  of  exit  strategies.  A  second  phase  of  the 
SPHERE project was also financed.  

ECHO  remained  active  in  supporting  the  Network  on  Humanitarian  Assistance  (NOHA), 
offering a one-year multi-disciplinary post-graduate diploma in humanitarian affairs.  

The change of ECHO’s legal framework was accompanied by in-depth training to facilitate a 
smooth  transition  process.  Training  programmes  covered  headquarters,  field  and  partners´ 
staff.  

3.8. 

Communication and Information 

its  Communication  Strategy  2004-2005.  Its  key  objective 

to 
ECHO  developed 
communicate  the  values,  principles  and  achievements  of  EU  humanitarian  aid.  It  targets 
multipliers (opinion leaders, young people, media) and puts strong emphasis on audiovisual 
products and photographic images. Information products posted on the website included also 
45  press  releases,  14  eye-witness  accounts  from  the  field  and  five  ‘streamed’  videos.  12 
special web sections (“In the Field”) were developed covering primarily high-need areas such 
as Angola, Iraq, Sudan, Uganda and others. 

is 

Media events were organised in various capitals across the world to support this approach. All 
activities and products highlighted, explicitly or implicitly, ECHO´s strategic messages linked 
to its policy and mandate. 

3.9. 

Budgetary and human resources, audit and evaluation 

A sustained effort on risk management and the assessment of internal controls led to a greater 
appreciation  of  the  risks  inherent  in  funding  and  managing  humanitarian  aid.  A  readiness 
assessment was conducted to assess the level of implementation of the Commission’s internal 
control  standards´  baseline  requirements.  The  overall  conclusion,  confirmed  by  an  update 
carried out in early 2004, was that ECHO complies with these requirements. 

To  comply  with  the  new  Financial  Regulation,  ECHO  revised  its  financial  circuits  and 
contractual  tools  with  partners  (FPA).  Despite  the  high  inherent  risks  of  humanitarian  aid 
operations,  this  contributed  to  reduce  risks  to  an  acceptable  level  in  terms  of  regularity, 
legality and sound financial management. 

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ECHO continued to establish monthly reports on budgetary execution. These include variance 
analysis  with  the  initial  planning  for  each  country/region/action  in  order  to  allow  a  swift 
follow  up.  This  close  monitoring  contributed  to  high  rates  of  budgetary  execution,  and  a 
reduced level of payment delays and unsettled commitments. The implementation rate of the 
commitment  appropriations  amounted  to  almost  100%,  whilst  the  rate  of  implementation  of 
payment appropriations was 92%. This is a significant achievement given the fact that part of 
the budget had to be used for emergency decisions at the end of the year and the extraordinary 
size of the budget for the Iraq crisis. 

ECHO-funded  activities  implemented  by  external  parties  are,  as  part  of  the  control  activity, 
subject to financial audit. 2003 was the first full year of implementation of ECHO’s external 
audit  strategy  with  a  big  increase  in  the  number  of  partners  and  projects  audited  and  with 
good  geographic  coverage  being  achieved.  For  finalised  projects,  ECHO  audits  focus  on 
partners' headquarters. For ongoing projects they focus on the field. 

For headquarter audits ECHO uses external auditors to scrutinise ECHO partners over a two-
year cycle. In 2003, 96 such audits were completed with another 44 on-going. Following the 
2003 audits, an amount of € 2.3 million was provisionally identified as being recoverable. 16 
field  audits  were  carried  out  directly  by  ECHO  officials  on  projects  under  way.  6  ECHO 
office audits were completed.  

ECHO  contributed  to  the  implementation  of  modern  human  resources  policies  in  line  with 
Commission reform. Its priorities were twofold: to facilitate the change process by putting in 
place  appropriate  structures  for  the  reform  and  to  promote  a  result-based  and  performance 
culture to improve quality. In that context, training activities covered a wide range of issues 
including financial questions, decision-making procedures and a mid-term review seminar for 
all staff focusing on the discussions in the European Convention. The second objective was 
translated into a selection of training activities ranging from induction courses for newcomers, 
presentations by ECHO partners to specialised training on ECHO tools such as the FPA. 

Regarding evaluation, ECHO adopted a new orientation to fit this function more closely into 
its strategic planning and policy development cycle. As part of this re-orientation, it took part 
in a joint evaluation on IDP issues with some Member States and other humanitarian actors. 
ECHO  started  a  review  into  standards  and  practices  covering  the  security  of  humanitarian 
personnel as well as advocacy work to protect the “humanitarian space”.  

Evaluations  also  continued  to  cover  geographical  operations  and  partner  performance,  in 
particular  in  Serbia,  Sudan,  Angola  and  Afghanistan.  Finding  confirmed  that  the  actions 
financed by ECHO were in line with its mandate. ECHO also undertook an evaluation of its 
co-operation with UNICEF. 

4. 

OUTLOOK AND PERSPECTIVES 

This report is published during a period of institutional transition at European level and within 
a  political  context  characterized  by  debates  on  topics  linked  to  global  governance  and 
security, which may have an impact both on ECHO and the wider humanitarian community. 

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ECHO  will  remain  faithful  to  the  fundamental  principles  and  values  of  humanitarian 
assistance,  namely  neutrality,  impartiality  and  independence.  It  is  convinced  that  strict 
adherence  to  these  principles  is  more  important  than  ever,  given  today’s  trends,  both  in  an 
institutional  context  where  certain  political  forces  tend  to  regard  humanitarian  aid  as  an 
instrument of foreign policy or crisis management, and in the increasingly dangerous reality 
of  the  field  where  humanitarian  organisations  have  become  targets  of  warring  factions. 
Respect of these fundamental principles is a key requirement for the effective delivery of aid, 
for maintaining access to populations in need, and for safeguarding the lives and security of 
humanitarian personnel.  

For ECHO, the best way to preserve the "humanitarian space" is full implementation of the 
Good  Donorship  Principles,  continuous  commitment  to  high  quality  assistance  and  a 
transparent dialogue with other key players.  

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