Special report No 3/2006 concerning the European Commission Humanitarian Aid Response to the Tsunami together with the Commission's replies
Date: 2006-05-11
Institutions: European Court of Auditors
Subjects: EU aid, Indonesia, aid evaluation, audit, coordination of aid, financing of aid, humanitarian aid, natural disaster

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I

(Information)

COURT OF AUDITORS

SPECIAL REPORT No 3/2006

concerning the European Commission Humanitarian Aid Response to the
Tsunami together with the Commission’s replies

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

(2006/C 170/01)

CONTENTS

Paragraphs

Page

LIST OF ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

The tsunami of 26 December 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Directorate-General for Humanitarian Aid (DG ECHO)

. . . . . . . . . . . . . . . . . . . . . . . . . .

Other Commission instruments involved in the response to the tsunami

. . . . . . . . . . . .

THE COURT’S AUDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reasons to carry out the audit

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scope and objectives of the audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Audit approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

OBSERVATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rapidity and appropriateness of the Commission’s response . . . . . . . . . . . . . . . . . . . . . .

Rapid response with an appropriate budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Selection of partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

High level of international funding exceeds financial needs of partners

Contrasting situations for accurate needs assessments . . . . . . . . . . . . . . . . . . . . . . .

Effectiveness of coordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Coordination of a large number of humanitarian organisations . . . . . . . . . . . . . . . .

Good coordination between DG ECHO and other Commission services except for
immediate response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Role of monitoring systems in ensuring relevance, timeliness and efficiency of implemen-
tation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A fairly comprehensive monitoring and control system . . . . . . . . . . . . . . . . . . . . . .

Adapting the initial response in order to ensure relevance . . . . . . . . . . . . . . . . . . . .

Delays resulting from saturation of capacity and other external constraints

. . . . . .

I-IX

1-7

1-3

4-5

6-7

8-11

8

9-10

11

12-44

12-21

12-15

16-17

18

19-21

22-26

22-23

24-26

27-39

27-33

34

35

Information on the efficiency of project implementation . . . . . . . . . . . . . . . . . . . . .

36-39

2

3

5

5

5

5

5

5

6

6

7

7

7

8

8

9

10

10

10

11

11

12

13

13

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Paragraphs

Achievement of results and adequacy of sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . .

40-44

Projects contributed to a successful overall response though some outputs and results
were less than planned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Adequate sustainability favoured by high level of funding . . . . . . . . . . . . . . . . . . . .

CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40-43

44

45-49

50-54

ANNEX: Map of impact of tsunami

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Page

14

14

15

16

17

18

19

LIST OF ABBREVIATIONS

BRR

Rehabilitation and Reconstruction Office

DG

ECHO Directorate-General for Humanitarian Aid

DIPECHO Disaster preparedness in DG ECHO

ECHO

European Community Humanitarian Aid Office

EU

European Union (EU)

FAFA

Financial and Administrative Framework Agreement

FPA

Framework Partnership Agreement

GAM

Free Aceh Movement

HIC

IDP

Humanitarian Information Centre

Internally displaced person

LRRD

Linking Relief, Rehabilitation and Development

LTTE

Liberation Tigers of Tamil Eelam

MIC

Monitoring and Information Centre

NGOs

Non-governmental organisations

TEC

UN

Tsunami Evaluation Coalition

United Nations

UNDAC

United Nations Disaster Assessment and Coordination

UNOCHA United Nations Office for the Coordination of Humanitarian Affairs

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EXECUTIVE SUMMARY

I.
On 26 December 2004, an earthquake off the west coast of Northern Sumatra triggered a massive tsu-
nami causing widespread destruction in many countries of the Indian Ocean, killing over 200 000 people. The
international community responded generously with over 5 billion euro of humanitarian aid (see paragraphs 1
to 3).

The European Commission has a specific Directorate-General, Directorate-General for Humanitarian
II.
Aid (DG ECHO), to respond to humanitarian crises. DG ECHO does not implement relief activities directly,
but through partners which consist of NGOs and international organisations, including the United Nations and
Red Cross. Following the tsunami, DG ECHO granted funding of 123 million euro of humanitarian aid (see
paragraphs 4 to 6).

III.
On the basis of an examination of documentation, interviews, on-the-spot visits and a review of other
audits and evaluations, the Court’s audit examined the Commission’s humanitarian aid response to the tsu-
nami. This included the emergency response and some short-term rehabilitation work consistent with DG
ECHO’s mandate, but did not include longer term reconstruction. The main questions addressed by this report
are (see paragraphs 8 to 11):

(a) Was the Commission’s response to the tsunami sufficiently rapid and appropriate?

(b) Were DG ECHO’s actions effectively coordinated with those of other Commission services, international

organisations and other countries?

(c) Were DG ECHO’s monitoring and control procedures designed to ensure that projects implemented by

partners were relevant, timely and efficiently implemented?

(d) Did projects implemented by DG ECHO’s partners achieve their expected results and were short-term reha-

bilitation actions adequately sustainable?

Commission procedures enabled a rapid response to the tsunami, granting 3 million euro the same day
IV.
as the disaster, followed by a further 20 million euro within five days. An additional 80 million euro was
granted in February 2005, followed by 20 million euro in December 2005, making a total of 123 million euro.
The high level of funding proved appropriate particularly due to the longer than expected transition from the
relief phase to the reconstruction phase (see paragraphs 12 to 15).

V.
DG ECHO had been working in Sri Lanka prior to the tsunami on projects with the conflict affected
population. Following the tsunami, DG ECHO chose to work with existing partners in Sri Lanka who knew
the situation well, enabling it to fund relevant projects in spite of the situation of over-funding and overcrowd-
ing caused by the large number of newly arrived NGOs. In Aceh DG ECHO did not have a presence in the field
before the tsunami. Due to difficult access and lack of reliable information some early project proposals were
a standard response to an emergency situation. Later project proposals from February 2005 onwards were
based on more reliable needs assessments (see paragraphs 16 to 21).

VI.
DG ECHO supported the coordination role of the United Nations and provided funding to address the
lack of reliable and accurate information on needs. The arrival of a large number of humanitarian organisa-
tions, often with large amounts of private funding, added to the difficulties of coordination resulting in varia-
tions in the level and quality of aid provided. Regarding coordination with other Commission services, there
has been good coordination to ensure a smooth link between short-term relief efforts and longer term recon-
struction. However, in both Indonesia and Sri Lanka coordination between DG ECHO and the Civil Protection
Mechanism, based in the Directorate-General Environment and responsible for the coordination of Member
States’ civil protection assistance, was problematic (see paragraphs 22 to 26).

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DG ECHO’s system for monitoring and controlling projects consists of monitoring visits of field
VII.
experts and desk officers, reports of partners, on-the-spot visits of the DG ECHO Finances and Audit Unit,
checks prior to final payment and later external audits. Procedures generally enabled projects to be modified
to meet evolving needs. However, there is scope to develop comparative cost information, to provide more
details on organisational arrangements and to quantify the achievement of project outputs (see paragraphs 27
to 39).

VIII.
Projects funded by the Commission have been implemented, though in some cases project outputs
have been less than planned due to inflation and difficulties in obtaining goods and recruiting qualified staff.
Projects managed by DG ECHO partners contributed to covering the basic needs of the population in terms of
shelter, food, water and sanitation, health, psychosocial support, child and family care and telecommunica-
tions. The Commission is also financing projects to support disaster preparedness. The audit work confirmed
the findings of other evaluations that the relief effort was effective, though poorly coordinated. The high level
of funding enabled DG ECHO to bridge the longer than expected transitional phase between relief and reha-
bilitation through quality interventions and to fund rehabilitation projects with a development orientation.
However, in terms of beneficiaries reached, the success of Commission projects was sometimes less than ini-
tially planned, mainly due to inaccurate needs assessments. In particular, the water and sanitation component
of a UN agency project in Aceh reached 100 000 people, representing only 5 % of the originally planned 2 mil-
lion beneficiaries (see paragraphs 40 to 44).

IX.

(a)

The recommendations made on the basis of the Court’s observations and conclusions are the following:

the Commission should consider the role it could play in helping affected governments to manage donor
coordination more effectively;

(b)

the roles of DG ECHO and DG Environment (Civil Protection Mechanism) should be clarified to ensure a
coherent approach;

(c) a longer timeframe for emergency operations should be considered in order to provide sufficient time for

implementation;

(d) DG ECHO should strengthen its monitoring system in order to include written feedback to partners fol-
lowing monitoring visits, the development of comparative cost information, an explanation of the imple-
menting arrangements and information on what has been done where;

(e)

the difficulties of access to documentation of projects implemented by UN agencies should be taken into
account in the context of the Financial and Administrative Framework Agreement (FAFA).

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INTRODUCTION

The tsunami of 26 December 2004

1.
On 26 December 2004, an earthquake off the west coast
of Northern Sumatra triggered a massive tsunami causing wide-
spread destruction in many countries of the Indian Ocean, killing
over 200 000 people. The Indonesian province of Aceh suffered
the worst of the devastation where over 160 000 people were
dead or missing and over half a million were displaced. In Sri
Lanka, the second worst affected country, some 35 000 people
were dead or missing and half a million were displaced. The map
in the Annex summarises the impact of the tsunami.

2.
Governments and individuals responded with overwhelm-
ing generosity. By January 2006, the global level of humanitarian
assistance in response to the tsunami had reached some 5,1 bil-
lion euro, of which 3,4 billion euro (67 %) came from private
donors (1). Including the longer-term reconstruction aid, a total of
over 11 billion euro has been pledged (2).

3.
The tsunami hit both Aceh and Sri Lanka against a back-
ground of long-standing conflicts between the Government and
separatist organisations. In Aceh a 30-year conflict between the
Government of Indonesia and the Free Aceh Movement (GAM)
had claimed 15 000 lives. In Sri Lanka there has been on-and-off
civil war between the Government and the Liberation Tigers of
Tamil Eelam (LTTE) since 1983 leaving 60 000 people dead. After
three years of ceasefire and the return of 400 000 people to their
places of origin, there are still an estimated 400 000 cases of
displacement.

Directorate-General for Humanitarian Aid (DG ECHO)

of aid to its partners which consist of non-governmental organi-
sations (NGOs) and international organisations (e.g. International
Committee of the Red Cross, International Organisation for
Migration and United Nations (UN) organisations). The roles and
responsibilities of NGOs and international organisations (other
than UN) which have been assessed as suitable partners are
defined in Framework Partnership Agreements (FPAs). The gen-
eral legal framework for relations between DG ECHO and UN
organisations is defined in the Financial and Administrative
Framework Agreement (FAFA).

Other Commission instruments involved in the response to the
tsunami

Complementing DG ECHO interventions, other Commis-
6.
sion instruments were involved in the response to the tsunami,
including, at the initial stage, the Civil Protection Mechanism, set
up by Council Decision 2001/792/EC of 23 October 2001 (4)
and based in DG Environment. Through its Monitoring and Infor-
mation Centre (MIC) the Civil Protection Mechanism appointed
teams of experts and sent them to the tsunami affected region to
help assess the situation and coordinate the arrival and distribu-
tion of civil protection assistance offered by Member States.

7.
Longer term rehabilitation, reconstruction and recovery
are under the responsibility of the Directorates-General for Exter-
nal Relations (RELEX) and European Aid (AIDCO), whilst DG
ECHO is responsible for the humanitarian response consisting of
emergency relief and short-term rehabilitation. The grey area
between short-term relief and longer term development
is
addressed by the process of linking relief, rehabilitation and devel-
opment (LRRD) (5). The Rapid Reaction Mechanism, set up by
Council Regulation (EC) No 381/2001 of 26 February 2001 (6)
and based in DG RELEX, is designed to assist in this process by
allowing the Commission to respond, in a rapid and flexible man-
ner to crises, by helping to create the conditions under which
longer term development can be pursued.

The European Commission has a specific Directorate-
4.
General, DG ECHO, to respond to humanitarian crises. DG
ECHO’s mandate is described in Council Regulation (EC)
No 1257/96 of 20 June 1996 concerning humanitarian aid (3)
and includes saving and preserving life during emergencies, car-
rying out short-term rehabilitation work, helping those affected
gain a level of self-sufficiency, taking long-term development
objectives into account where possible and ensuring preparedness
for risks of natural disasters.

THE COURT’S AUDIT

Reasons to carry out the audit

5.
Average annual EU humanitarian aid funding is in the
order of 600 million euro. Although Regulation (EC) No 1257/96
allows for the direct implementation of relief activities by the
Commission, in practice DG ECHO entrusts the implementation

(1) Source: UN Financial Tracking Service.
(2) Source: UN Office of the Special Envoy for Tsunami Recovery.
(3) OJ L 163, 2.7.1996, p. 1.

In view of the high level of funding by institutions and indi-
8.
viduals in the response to the tsunami, and given the interest
shown by the European Parliament and the Council, the Court
decided to audit the EU humanitarian response.

(4) OJ L 297, 15.11.2001, p. 7.
(5) Commission Communication COM(96) 153 on Linking Relief, Reha-
bilitation and Development (LRRD) and COM(2001) 153 on Linking
Relief, Rehabilitation and Development — An assessment.

(6) OJ L 57, 27.2.2001, p. 5.

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Scope and objectives of the audit

9.
The scope of this audit is limited to the Commission’s
humanitarian aid response. This includes the emergency response
and some short-term rehabilitation work, consistent with DG

ECHO’s mandate, but does not include longer term reconstruc-
tion. The financial decisions corresponding to the audit scope are
shown in table 1. The audit has also examined entities on the
periphery of DG ECHO, such as the Civil Protection Mechanism,
when they impact on DG ECHO’s humanitarian response.

Table 1

Humanitarian aid granted by Commission

Decision

Allocation of funding

Date

Duration

Amount

Regional

Indonesia

Sri Lanka

India

Maldives

Thailand

(million euro)

26 December 2004

3 months

30 December 2004

6 months

31 December 2004

6 months

9 February 2005

18 months

15 December 2005

18 months

3,0

10,0

10,0

80,0

20,0

3,0

13,7

Total decisions

123,0

16,7

10,0

30,5

10,0

50,5

Total contracted by December
2005

Total disbursed by December
2005

Source: DG ECHO.

102,6

16,7

40,2

32,5

10,0

78,8

13,6

31,3

24,8

6,5

2,2

8,3

1,7

24,3

10,0

1,0

0,5

8,0

2,0

40,6

12,0

2,7

2,7

0,5

0,5

0,4

10.
The key questions addressed by this report with the
objective of identifying useful lessons for future large-scale disas-
ters are:

(d) Did projects implemented by DG ECHO’s partners achieve
their expected results and were short-term rehabilitation
actions adequately sustainable?

(a) Was the Commission’s response to the tsunami sufficiently

Audit approach

rapid and appropriate?

(b) Were DG ECHO’s actions effectively coordinated with those
of other Commission services, international organisations
and other countries?

(c) Were DG ECHO’s monitoring and control procedures
designed to ensure that projects implemented by partners
were relevant, timely and efficiently implemented?

11.
The audit was based on an examination of documenta-
tion, on interviews, on on-the-spot visits and on a review of other
audits and evaluations. DG ECHO’s management, monitoring
and control systems were assessed at HQ level and corroborated
by visits to DG ECHO’s field offices, partners and projects in Sri
Lanka and Indonesia. Table 2 shows projects and partners visited
on the spot. Projects for on-the-spot visits were selected accord-
ing to criteria of sector, location, amount, stage of implementa-
tion and type of partner in order to obtain a reasonable overall
picture. Projects which had already received an on-the-spot veri-
fication by DG ECHO’s Finances and Audit Unit were not
revisited.

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Humanitarian aid projects visited on the spot in Indonesia and Sri Lanka

Table 2

Financial decision

Type of partner

Project description

Commission funding (euro)

INDONESIA

UN agency

Response to children, water and sanitation

4 000 000

10 million euro

80 million euro

NGO

NGO

NGO

NGO

NGO

Total value of projects visited in Indonesia

10 million euro

NGO

NGO

NGO

80 million euro

International
organisation

Psychosocial support

Safe water

Enhancing community care and support

Recovery of fisheries livelihoods

Water and sanitation

SRI LANKA

Water and sanitation

Water, sanitation, food and non-food

Psychosocial support

Shelter, registration and livelihood

UN agency

Fisheries and agriculture

Total value of projects visited in Sri Lanka

528 798

550 000

484 820

476 792

1 336 266

7 376 676

571 534

1 200 000

672 720

2 067 480

3 900 000

8 411 734

OBSERVATIONS

Maldives on 30 December 2004 and a further decision for 10 mil-
lion euro for Indonesia on 31 December 2004, both with a times-
cale of six months, bringing the total aid to 23 million euro.

Rapidity and appropriateness of the Commission’s response

Rapid response with an appropriate budget

12.
Procedures for streamlining humanitarian decisions were
adopted by the Commission in 2001 (1) giving the Director-
General of DG ECHO the power to take decisions for primary
emergency humanitarian aid up to 3 million euro for a period of
three months. The Commissioner responsible for humanitarian
aid was given the power to take emergency decisions up
to 30 million euro directly for operations
lasting up to
six months. These procedures, combined with DG ECHO’s sys-
tem of permanent cover during holiday periods, enabled the
Commission to respond rapidly to the tsunami. A primary emer-
gency decision for 3 million euro with a three-month timescale
was taken on 26 December 2004, the same day as the disaster.
This decision covered the emergency response for shelters, non-
food aid and medical supplies to be provided by the International
Federation of Red Cross and Red Crescent Societies. This was fol-
lowed by a decision of 10 million euro for Sri Lanka and the

(1) SEC(2001) 873.

13.
On 6 January 2005, the Commission pledged an addi-
tional 100 million euro for humanitarian aid at the Jakarta Tsu-
nami Aid Conference and therefore requested this amount from
the budgetary authority (Parliament and Council). This amount
was approved on 19 January 2005 enabling an 80 million euro
decision to be taken on 9 February 2005, and a 20 million euro
decision to be taken on 15 December 2005, both with an
18-month timescale.

The first 23 million euro was used to fund emergency
14.
activities including health care, medical supplies, shelter, epidemic
early warning systems, safe water and sanitation facilities, food
relief items, psychosocial assistance, child protection and logisti-
cal support such as satellite phone services. The subsequent
80 million and 20 million euro decisions are funding short-term
rehabilitation including emergency and transitional shelter, relo-
cation of internally displaced people, livelihood recovery, food
security, water and sanitation facilities, logistical and technical
assistance and disaster prevention. Pictures in the report illustrate
some of the different types of aid funded by DG ECHO.

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The Good Humanitarian Donorship Principles, agreed in
15.
Stockholm in June 2003, state that humanitarian funding should
be allocated in proportion to needs and on the basis of needs
assessments. However, following the tsunami, real needs were not
clear from the information available, and it was essential to bal-
ance the desirability of an informed response with the necessity
for a rapid response. In this uncertain context the Commission’s
pledge demonstrated its commitment, and the high level of fund-
ing proved appropriate, due partly to the following factors:

(a)

the financial decision for 20 million euro taken on
15 December 2005 was to meet remaining needs for
18 months from January 2006. The transitional phase
between relief and reconstruction, initially expected to be
over before the end of 2005, was longer than expected
because the major part of the reconstruction work had yet to
start at the end of 2005;

(b)

in August 2005 the 80 million euro decision was modified
to include also the conflict affected population (see box 1).

arrangement enabled DG ECHO to fund the implementation of
relevant projects in spite of the situation of overfunding and over-
crowding caused by the large number of newly arrived NGOs
with private funding determined to start a project in districts
overwhelmed with aid.

In contrast to Sri Lanka, DG ECHO did not have a pres-
17.
ence in Aceh prior to the tsunami as access to international staff
of humanitarian organisations (with the exception of a few rep-
resentatives of UN organisations and the Red Cross) was not
allowed under the civil emergency status declared by the Indone-
sian Government. Following the tsunami, free access to Aceh was
allowed from 28 December 2004. DG ECHO therefore selected
partners able to work immediately in the field and with expertise
in the different areas to be covered, such as UN agencies in child
protection, water supply, sanitation and health. All the agree-
ments with partners for the two 10 million euro emergency deci-
sions had been signed by 18 January 2005 for Sri Lanka and by
27 January 2005 for Indonesia.

Box 1

High level of funding helps to meet the need for a conflict
sensitive response

The armed conflict
in Sri Lanka caused the displacement of
800 000 people between 1983 and 2002. A massive wave of
return started after the ceasefire in February 2002 resulting in
almost 400 000 returnees by the time of the tsunami at the end of
2004. However, only about 15 % of the conflict affected popula-
tion were directly affected by the tsunami and could therefore benefit
from the generous response of the donor community to the tsunami.
The quantity of aid provided to the tsunami affected population was
much higher than the aid provided to the conflict affected popula-
tion in the same area. The cost of a tsunami related temporary shel-
ter, for example, was in the order of 450 euro compared with
125 euro for a conflict related temporary shelter. Monthly food sup-
port for a tsunami affected family was 70 euro compared with
10 euro for a conflict affected family. This discrimination caused
resentment and tension among communities.

In order to avoid discrimination against vulnerable people displaced
prior to the tsunami, the Commission modified the 80 million euro
decision in August 2005 to include also the conflict affected popu-
lation living in the tsunami districts.

Selection of partners

High level of international funding exceeds financial needs of
partners

18.
The high level of international funding available in
response to the tsunami exceeded the absorption capacity of
some partners (see box 2). Over 360 humanitarian organisations
arrived in Sri Lanka and 450 in Indonesia with large amounts of
private funding. The competition for resources contributed
to inflation and difficulties in obtaining goods and in recruiting
qualified staff. The Rehabilitation and Reconstruction Office
(BRR (1)) report one year after the tsunami described how prices
and wages in Aceh rose by 30 to 40 % in 2005.

Box 2

General context of funds exceeding partners’ financial needs

In Sri Lanka, because of the high level of private funding, some of
DG ECHO’s existing partners have not had the capacity to absorb
available Commission funding. For example, a project of only
570 000 euro was agreed with an NGO although DG ECHO ini-
tially intended to allocate 1 million euro of the 10 million euro deci-
sion to them. Despite increasing their capacity in Sri Lanka since the
tsunami this NGO has not submitted a proposal in the context of
the 80 million euro decision. From October 2005, DG ECHO
therefore worked with four partners new in Sri Lanka (out of a total
of 21 partners).

16.
After coordinating with the UN and other donors, DG
ECHO decided to work with existing partners mainly in the north
and east of Sri Lanka where it had been working with the conflict-
affected population prior to the tsunami since 1994. This

(1) The BRR (Badan Rehabilitasi dan Rekonstruksi) was established in
April 2005 by the Government of Indonesia to help coordinate the
rehabilitation and reconstruction of Aceh and Nias.

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One NGO had a strong team on the ground in Sri Lanka and good
knowledge due to their presence there during over 20 years of con-
flict.

Another NGO was already present in eastern Sri Lanka, implement-
ing a DG ECHO funded project in relation to the conflict.

20.
In Indonesia, accurate needs assessments were difficult in
the situation immediately following the tsunami due to the gen-
eral confusion and lack of reliable information. The lack of access
to affected areas, mainly because of the large scale destruction and
partly because of the security situation, slowed the deployment in
the field of humanitarian organisations. It was not until the end
of January that most organisations were well established on the
west coast of Sumatra, which had an impact on the quality and
timeliness of needs assessments. Some project proposals financed
under the 10 million euro emergency decision presented a stan-
dard emergency response proposal rather than a response to spe-
cific findings based on a more accurate needs assessment. In
June 2005, the UN Office for the Coordination of Humanitarian
Affairs (UNOCHA) held a regional workshop on lessons learned
from the tsunami which highlighted the lack of consultation with
communities regarding relief and recovery work undertaken by
the humanitarian community as a whole.

21.
The needs assessments of projects agreed from Febru-
ary 2005 were more reliable due to the availability of more infor-
mation and more time to prepare proposals. For example, in pre-
paring their boat building project in Aceh, an NGO worked
closely with the community and succeeded in designing a project
which met the needs of the beneficiaries.

In Indonesia, a UN agency did not have the capacity to spend all
Commission funds during the six-month implementing period of the
emergency decision. Many usual partners of DG ECHO did not sub-
mit project proposals in Indonesia because the funding they had
received from other donors already exceeded their absorption capac-
ity.

This analysis concerning the lack of capacity to absorb available
funding is reinforced by the position of one NGO which stressed that
its programmes should be driven by need alone, not by a desire to
spend surplus funds. Although it stopped accepting funds for vic-
tims of the tsunami less than a week after the disaster, it neverthe-
less received 110 million euro compared with the 25 million euro
needed to run tsunami programmes for 2005. Donors were asked
for their permission to remove restrictions on donations so that they
could be used for other emergencies, and 99 % agreed. By the end of
2005, 65 million euro of donations originally intended for the tsu-
nami had been used to meet needs elsewhere such as the nutritional
crisis in Niger, the conflict in Darfur and the earthquake in Paki-
stan.

Contrasting situations for accurate needs assessments

19.
DG ECHO’s project cycle management approach empha-
sises the importance of project planning, design and needs analy-
sis in order to ensure that the project will meet the needs of the
target group. Project proposals submitted by partners were analy-
sed by the DG ECHO field expert (1) and also by the desk officer
in Brussels prior to their approval. DG ECHO’s decision to work
with existing partners in Sri Lanka ensured that project proposals
were prepared by organisations with knowledge of the country
who were well placed to carry out needs assessments (see box 3).
Some partners included a needs assessment as part of the project
itself.

Box 3

Partners in Sri Lanka were well placed to prepar eproject
proposals

A Red Cross organisation was ideally placed to prepare the psycho-
social support project because since 2003 it had supported the Sri
Lankan Red Cross Society to implement a psychosocial support pro-
gramme in the northern province of Jaffna, also supported by the
Commission, targeting the internally displaced people uprooted as a
result of the conflict.

(1) Field expert is the term used to refer to the Commission’s humanitar-

ian aid technical support personnel.

Livelihood assistance: fishing boats in Aceh, Indonesia
(Source: ECA)

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Effectiveness of coordination

Coordination of
organisations

a

large number of humanitarian

The UN Office for the Coordination of Humanitarian
22.
Affairs (UNOCHA) assumed the role of coordinator for the activi-
ties of aid agencies, supported by other UN agencies for the dif-
ferent sectors concerned. However, the UN encountered the fol-
lowing obstacles to effective coordination:

(a)

there was inadequate information on damages and needs and
also on relief action planned and in progress. The need for
accurate and reliable information as late as May 2005 con-
cerning the number and location of internally displaced
people (IDPs)
in Indonesia illustrates this problem. The
June 2005 UNOCHA regional workshop on lessons learned
highlighted the requirement for better information, a prob-
lem which the Commission recognised and worked to
address (see box 4);

(b) a large number of newly arrived humanitarian organisations,
many with large amounts of private funding, often operated
independently of available coordination mechanisms;

(c)

local authorities had been weakened by human and material
losses and there was no functioning system for registering
NGOs and ensuring their adherence to standards or partici-
pation in established coordination mechanisms. The points
for further discussion in the EU Council Presidency discus-
sion paper of December 2005 (1) concerning the EU’s
response to the tsunami focus on the question of what role
the international community and the EU can play to support
governments in managing donor coordination effectively.

Box 4

DG ECHO recognised and worked to address problems
of coordination

DG ECHO’s strategy in Indonesia and Sri Lanka was to support the
coordination role of the United Nations. In this context DG ECHO
granted 1 million euro to support UNOCHA’s Humanitarian Infor-
mation Centre (HIC) in order to provide information tools for plan-
ning, implementing and monitoring humanitarian assistance. A
joint OCHA and ECHO evaluation of the HIC in April 2005 made
recommendations to help it to provide a comprehensive overview of
the humanitarian response and to highlight gaps in needs.

DG ECHO provided funding to an NGO in Aceh to gather data
concerning internally displaced people and integrate them into the
Humanitarian Information Centre.

In Sri Lanka, DG ECHO funded a project implemented by an inter-
national organisation to establish a central beneficiary database
aimed to address the problem of lack of clear information. However,
although the project was originally encouraged by the Centre for
National Operations, established by the Government of Sri Lanka
to manage the response to the tsunami, it was not supported by the
government agencies which took over responsibility for relief and
recovery from February 2005. The database was therefore put on
hold until September 2005 when the registration process restarted
under the leadership of the Government of Sri Lanka.

23.
As a result of the difficulties of coordination, there have
been significant variations in the level and quality of assistance
provided by the international community. The Red Cross World
Disasters Report 2005 describes how some communities in Aceh
were overwhelmed with aid while others were neglected. There
was overprovision of aid in the health sector in Indonesia and in
the provision of boats in Sri Lanka and some aid was insuffi-
ciently complete, for example fishing boats without fishing nets.
Furthermore, in December 2005, one year after the disaster, some
67 000 people were still living in tents in Aceh.

Good coordination between DG ECHO and other
Commission services except for immediate response

24.
The Civil Protection Mechanism deployed teams of
experts to the areas most affected by the tsunami to help assess
the situation and coordinate the arrival and distribution of civil
protection assistance offered by Member States. The Memoran-
dum of Understanding of 16 March 2003 between DG ECHO
and the Directorate-General for Environment states that enhanced
coordination of Civil Protection and Humanitarian Aid interven-
tions, both at headquarters and in the field, is paramount to
achieve coherent synergies of Community action. Procedures
should ensure a mutual exchange of information at all stages of
the crisis and meetings in the field between DG ECHO and the
Civil Protection Coordination team should ensure that activities
are complementary. However, in both Sri Lanka and Indonesia
the Civil Protection Mechanism was insufficiently coordinated
with humanitarian aid.

(1) The EU’s contribution to the international response to the 2004 Asian
Tsunami: achievements, next steps and lessons learned. Discussion
paper for High-level Meeting Brussels, 20 December 2005, hosted by
the European Commission and the EU Presidency.

25.
The Humanitarian Aid Committee of 27 January 2005
focused on the weaknesses in coordination between DG ECHO
and the Civil Protection Monitoring and Information Centre (MIC)

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and considered that the MIC had not confined itself to civil pro-
tection activities, but had overlapped with the humanitarian field
which is beyond their role and given the impression that it was
coordinating all EU assistance (1).

Role of monitoring systems in ensuring relevance, timeliness
and efficiency of implementation

26.
Concerning the link with the reconstruction phase, DG
ECHO works with other Commission services to ensure there is a
smooth and effective link between short-term relief efforts and
longer term reconstruction. The high level of DG ECHO funding
helped to bridge the longer than expected transitional phase
between relief and reconstruction (see paragraph 15(a)). The strat-
egy for linking relief, rehabilitation and development (LRRD) in
Indonesia and Sri Lanka involves the use of the Rapid Reaction
Mechanism to provide satellite imaging of tsunami damages that
could be useful for reconstruction planning and disaster pre-
paredness. The Rapid Reaction Mechanism also helped finance
mediation efforts which led to a peace agreement in August 2005
between the Government of Indonesia and the Free Aceh Move-
ment (GAM), strengthening the foundations for reconstruction
efforts.

Sanitation assistance: latrines in Aceh, Indonesia
(Source: ECA)

(1) In February 2005, the UN Disaster and Assessment Coordination
(UNDAC) Advisory Board discussed the Civil Protection Mechanism
and viewed with concern the possible duplication of roles following
the tsunami. Consequently, the UN Office for the Coordination of
Humanitarian Affairs (UNOCHA) requested clear procedures for EU
Civil Protection Mechanism coordinators to work within the existing
internationally agreed mechanisms.

A fairly comprehensive monitoring and control system

In order to monitor and control project implementation,

27.
DG ECHO relies on the following mechanisms:

(a) DG ECHO field experts’ monitoring visits and reports supple-
mented by supervisory monitoring visits of desk officers;

(b) DG ECHO’s partners’ reports;

(c) on-the-spot visits of the DG ECHO Finances and Audit Unit;

(d) checks prior to final payment and later external audits of

partners.

DG ECHO field experts carried out monitoring visits of
28.
projects being implemented by partners to ensure the relevance,
timeliness and efficiency of implementation. On the basis of
monitoring visits, appropriate action can be taken at local or
headquarters level. For example, the April 2005 monitoring
report of a psychosocial support programme in Sri Lanka high-
lighted problems in recruiting local staff. The DG ECHO desk
officer in Brussels therefore contacted the concerned Red Cross
headquarters to obtain assurance that a Memorandum of Under-
standing with the Sri Lanka Red Cross would be signed to allow
the recruitment of local staff for the next phase of the project.

Following the tsunami on 26 December 2004, DG ECHO
29.
staff were in Sri Lanka on 27 December 2004 and in Jakarta,
Indonesia on 28 December 2004. On 1 January 2005, the first
DG ECHO experts arrived in Aceh. DG ECHO redeployed tech-
nical assistants from other regions e.g. South America, Africa and
the Middle East in order to assist in the initial response to the tsu-
nami. The need for permanent field experts was identified in Janu-
ary 2005 and they were in place in Aceh by April 2005. Follow-
ing the tsunami, the Commission made a commitment to increase
the number of DG ECHO field experts from 69 to 150 (2). In Sri
Lanka, 23 monitoring visits were carried out for the nine projects
funded by the 10 million euro emergency decision. In Indonesia
13 monitoring visits were carried out for the 10 projects funded
by the 10 million euro emergency decision, mostly after the
arrival of the current field experts in April 2005. A monitoring
report was produced by the DG ECHO field expert after each
monitoring visit.

(2) COM(2005) 153 — Reinforcing EU Disaster and Crisis Response in

third countries.

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There are no specific guidelines for DG ECHO field
30.
experts for reporting the findings of monitoring missions. At the
end of each monitoring mission DG ECHO field experts have a
debriefing meeting with the partner’s field team. However, DG
ECHO does not systematically provide written feedback to the
partner showing matters arising during the monitoring visit and
action agreed. Written feedback would enable the partner to ben-
efit more fully from the advice and support resulting from DG
ECHO’s monitoring visits and may help resolve problems
identified.

31.
The information obtained from monitoring visits by DG
ECHO field experts is supplemented by information contained in
partners’ reports. For projects with a duration of six months, part-
ners are required to send to DG ECHO a preliminary final report
one month before the end of the project and a final report within
six weeks after the end of the project, or three months for UN
projects. For the 10 million euro emergency decisions in Sri
Lanka and Indonesia with a six-month duration, most partners
submitted their preliminary final reports on time, but there were
delays of one or two months for most of the final reports.

The final check prior to final payment is also carried out
33.
by the DG ECHO Finances and Audit Unit. This control takes into
account the comments of the DG ECHO field expert and desk
officer on the final report of the partner and their recommenda-
tion whether or not to proceed with payment. In addition this
payment control is also based on a list of expenditure, stock
details, procurement procedures, staff lists and copies of invoices
when considered appropriate. Furthermore,
the DG ECHO
Finances and Audit Unit arranges for an independent external
audit of project documentation at the partner’s headquarters for
a sample of projects. These external audits have proved to be an
effective tool for identifying ineligible expenditure for recovery,
due mainly to the lack of supporting documentation. However,
there is a considerable delay between the end of a project and the
external audit which DG ECHO aims to reduce by covering all
partners on a two-year cycle.

Adapting the initial response in order to ensure relevance

32.
In addition to the monitoring visits of DG ECHO field
experts and desk officers and the information contained in part-
ners’ reports, project implementation is also monitored by staff of
DG ECHO Finances and Audit Unit who carry out on-the-spot
checks of a selection of projects. In 2005, DG ECHO on-the-spot
checks focused on the tsunami response and the value of projects
examined in Sri Lanka and Indonesia was 19 million euro or 18 %
of the 103 million euro of projects contracted by DG ECHO relat-
ing to the tsunami response by the end of 2005. The on-the-spot
verification of the projects implemented by a UN agency in Indo-
nesia highlighted problems of access to documentation which,
although overcome, will need to be clarified in working meetings
on the Financial and Administrative Framework Agreement
(FAFA) (see box 5).

Box 5

Access to UN documentation

DG ECHO encountered problems in obtaining access to relevant
financial information requested for an on-the-spot control visit in
June 2005 of a UN agency project of 500 000 euro for emergency
health actions in Indonesia, contrary to the requirements of the
Financial and Administrative Framework Agreement (FAFA). Fol-
lowing discussions with the UN agency this matter was clarified and
DG ECHO gained access to the relevant documentation in Novem-
ber 2005.

34.
DG ECHO’s procedures recognise the need to be flexible
and Article 10 of the Framework Partnership Agreement contains
simple procedures for modifying projects to enable them to
remain relevant in response to evolving needs. Flexible proce-
dures generally enabled projects to be modified to meet evolving
needs and ensure the relevance of implementation (see box 6).

Box 6

Modification of projects to address evolving needs

In June 2005, in Sri Lanka a UN agency warned of the over-
provision of small fishing boats which could contribute to over-
fishing and long-term damage to the coastal fisheries resource. In
August 2005, their project was modified to reduce the number of
boats to be repaired or manufactured and to provide 15 000 sets of
fishing gear instead.

Within the first month following the tsunami it was clear that the
Government of Sri Lanka had received enough donations of medi-
cines to cover all existing needs. An NGO project funded by DG
ECHO was therefore amended in order to reallocate funding to psy-
chosocial support and support to the local health structures.

Another project in Sri Lanka included 21 500 dry rations of highly
nutritional biscuits for under-five children as part of a contingency
plan. These biscuits were not required and the 28 000 euro initially
planned for food security was reallocated to livelihood support.

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One partner in Indonesia replaced tents with kitchens in order to
respond to the evolving needs of beneficiaries.

An NGO project in Indonesia was modified when the large inter-
national response avoided a nutritional crisis. The emergency nutri-
tional programme was no longer required and was therefore replaced
with a nutritional education and supplementary feeding programme.

Delays resulting from saturation of capacity and other
external constraints

35.
Concerning the timeliness of project implementation,
DG ECHO helped to overcome some constraints identified in
monitoring reports. For example, in Indonesia the May 2005
monitoring report on a UN agency project highlighted the lack of
experts to implement activities. Action was therefore taken at the
level of headquarters in DG ECHO and the UN agency resulting
in the recruitment of the necessary staff. However, other delays
identified in monitoring reports were not addressed by the part-
ner during the timescale of the project (see box 7). There were
delays in implementation by partners due to competition for
resources between a large number of newly arrived humanitarian
organisations. In Sri Lanka delays were also due to other external
constraints such as the withdrawal of duty exemptions on
humanitarian goods in February 2005 and building restrictions in
the government imposed buffer zone, waived in late 2005 invali-
dating most of the assessments and many projects.

Box 7

Examples of delays in the implementation of projects
by partners

The water treatment plant at Pramuka, Jantho, Indonesia could not
function until June 2005, four months after its arrival, due to the
lack of chlorine tablets resulting from slow procurement procedures.

The provision of shelters in Sri Lanka was delayed due to scarcity of
suitable land for relocating communities forbidden to return within
the coastal conservation zone. Land allocated to an international
organisation for construction was later allocated by local authorities
to other actors.

The distribution of fishing nets by a partner in Sri Lanka was delayed
due to procurement difficulties and the time taken to define kits. By
the time the NGO was ready to distribute, some needs (e.g. for fish-
ing equipment) had already been met by other organisations. This
led to further delays because the NGO had to carry out new needs
assessments.

Information on the efficiency of project implementation

36.
Monitoring the efficiency of implementation requires
information on costs, organisational arrangements and on the
reality of outputs. Concerning costs, in order to enable a timely
response, the selection of partners’ proposals is not the result of a
competitive tendering procedure. The procurement procedures of
DG ECHO partners are examined during the external audits of
partners at their headquarters and in the course of on-the-spot
verifications of the DG ECHO Finances and Audit Unit. In addi-
tion, the analysis of project proposals by DG ECHO field experts
contains an analysis of unit costs as a factor in deciding whether
partners are offering goods and services at a fair price. However,
this analysis is of limited value in providing assurance on effi-
ciency and could be improved with comparative information and
systematic follow up monitoring. There is scope to further
develop comparative cost information and to monitor unit costs
during implementation. Particularly following an unpredictable
disaster, this information reinforces the assurance that goods and
services are being obtained at a fair price. In the meantime, DG
ECHO is developing its monitoring system so that it is intended
to automatically assist with the calculation of unit costs and the
ratio of direct costs to support costs.

Some monitoring reports provide insufficient details of
37.
the sometimes complex organisational arrangements to show
whether the partner is carrying out project tasks directly or
whether it has subcontracted activities to other NGOs or private
enterprises (see box 8). Since it is only signatories of the Frame-
work Partnership Agreements and the Financial and Administra-
tive Framework Agreement which have been assessed as suitable
partners, it is important to identify those organisations imple-
menting DG ECHO funded projects which have not been assessed
in this way.

Box 8

Organisational arrangements to be better explained
in monitoring reports

In Sri Lanka the boat repair activities of a UN agency were being
carried out by private enterprises and an ECHO partner’s water and
sanitation activities were undertaken by local NGOs.

In Indonesia, although the monitoring reports stated that one UN
agency used NGOs to implement projects, the NGOs concerned were
not identified.

These specific arrangements were not described in the monitoring
reports.

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DG ECHO’s monitoring aims to focus more on results
38.
than on outputs (i.e. number of homes occupied by families rather
than number of shelters constructed). Monitoring reports do not
systematically quantify the achievement of project activities nor
do they incorporate formal acceptance of finished works, such as
shelters, latrines or boats. It is nevertheless important to have
clear information on what has been done where, as a prerequisite
for reporting on results. Information on the reality of outputs is
necessary to ensure that goods and services were provided and to
the standard required (see box 9).

Box 9

Need to improve the information on outputs

In the case of a project in Indonesia it was difficult for DG ECHO
field experts to identify which activities had been financed by DG
ECHO. There were frequent changes in staff who were not able to
state precisely what had been done with DG ECHO funding. Despite
requests from DG ECHO field experts, the UN agency concerned did
not provide detailed information on activities undertaken until the
end of the project.

The interim financial report of a project in Sri Lanka allocated
1,45 million euro or 85 % of expenditure to the budget heading
‘fisheries’ without any further detail. The provision of detailed finan-
cial information would facilitate the effective monitoring of project
implementation.

Our audit also confirmed DG ECHO monitoring reports
39.
which considered that the visibility of DG ECHO funded actions
was generally satisfactory, though in some cases there was scope
for improvement. For example, DG ECHO visibility was poor at
the child care centre in Jantho, Aceh, and on water treatment
plants implemented by a UN agency. Analysing the overall inter-
national aid effort, the Tsunami Evaluation Coalition (TEC) initial
findings are critical of humanitarian agencies for focusing on
brand promotion and competing for visibility at the expense of
meeting the real needs of beneficiaries. However, visibility actions
do have the additional benefit of helping to reduce the risk of
double financing by clearly identifying who has financed what.

Water treatment plant in Aceh, Indonesia
(Source: ECA)

Achievement of results and adequacy of sustainability

Projects contributed to a successful overall response though
some outputs and results were less than planned

In terms of outputs, the projects financed by DG ECHO
40.
have been implemented, though in some cases inflation has
reduced the level of output and some activities could not be car-
ried out within the timeframe of the project due to difficulties in
obtaining goods and in recruiting qualified staff (see box 10).

Box 10

Some project outputs less than planned

In Sri Lanka, due to increased costs of materials and labour, a DG
ECHO funded project reduced the number of shelters constructed to
2 018 instead of the initially planned 2 500.

In Indonesia an NGO could not complete the distribution of
1 500 000 bottles of chemicals for treating water because of pro-
curement difficulties. Although an extension of three months was
agreed, at the end of the project in July 2005, 900 000 bottles still
remained to be distributed. The bottles were finally distributed at the
partner’s own expense.

41.
In terms of results, projects funded by the Commission
made substantial contributions towards covering the basic needs
of the population in terms of shelter, food, water and sanitation,
health, psychosocial support, child and family care and telecom-
munications (see box 11). Commission funded projects have also

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contributed to restoring livelihoods, for example through the pro-
vision of boats and fishing equipment and the rehabilitation of a
wharf. However, in terms of beneficiaries reached, the success of
projects was sometimes less than initially planned, mainly due to
an overestimation in needs assessments resulting from the need
for a rapid response (see paragraph 20). This was the case for a
water and sanitation project in Sri Lanka which reached some
37 000 beneficiaries instead of the 50 000 initially planned. In
particular the water and sanitation component of a UN agency
project in Aceh reached 100 000 people, representing only 5 %
of the initially planned 2 million beneficiaries. As a result of this
low coverage, combined with the difficulties in identifying the
outputs of the project during implementation, DG ECHO is con-
cerned about this partner’s operational capacity to assume coor-
dination for the water and sanitation sector.

evaluation conclude that overall the relief effort, although poorly
coordinated and inefficient, was effective at limiting suffering
through the provision of food, water and shelter. The Red Cross
World Disasters Report 2005 similarly concludes that, despite the
need for improved coordination, the enormous response suc-
ceeded in getting aid to most survivors and preventing further
hunger or disease. The visits to projects carried out in the course
of our audit and the interviews held with all local actors includ-
ing beneficiaries,
largely confirmed the conclusions of these
evaluations.

Regarding future developments, DG ECHO is financing a
43.
2 million euro project, with funds from the 80 million euro deci-
sion, to support a UN disaster preparedness project to strengthen
early warning systems in the Indian Ocean region. Both South
and South East Asia are benefiting from DIPECHO (1) action plans
and have been allocated some 11 million euro for community-
based disaster preparedness projects in 2005 to 2006. The UN
Office for the Coordination of Humanitarian Affairs (UNOCHA)
lessons learned workshop of June 2005 highlighted the need for
significant improvement in disaster preparedness mechanisms.

Box 11

Results of Commission’s humanitarian aid

The Commission has reported that its humanitarian aid to Indone-
sia, Sri Lanka, India, the Maldives and Thailand has contributed to
providing:

— clean drinking water and sanitation facilities

for over

720 000 people,

— weekly food aid rations to almost 900 000 displaced people,

— shelter materials for almost 140 000 people to repair or

rebuild their homes or to set up transitional shelters,

Adequate sustainability favoured by high level of funding

— health services and epidemiological data systems for the benefit

of 840 000 people,

— psychosocial assistance for over 260 000 people,

— income

generation and

livelihood

support

for

some

325 000 people.

42.
A major evaluation initiative is the Tsunami Evaluation
Coalition (TEC), to which DG ECHO is contributing. This is a col-
laborative effort by aid agencies to learn from the response to the
tsunami. It has carried out five thematic evaluations on the donor
response, coordination, needs assessment, the impact on local
and national capacities and the linkage of relief with rehabilita-
tion and long-term development. The initial findings of the TEC

44.
DG ECHO is responsible for the humanitarian response
consisting of emergency relief and short-term rehabilitation,
whilst longer term rehabilitation, reconstruction and recovery are
under the responsibility of DG RELEX and DG AIDCO. Because
of the involvement of different DGs, procedures and mandates for
these two phases, the grey area in between and the process of
linking relief, rehabilitation and development (LRRD) are particu-
larly important. The high level of DG ECHO funding made avail-
able for the tsunami has enabled DG ECHO not only to focus on
core relief sectors such as food and water, sanitation, health and
shelter, but also to bridge the longer than expected transitional
phase through quality interventions and, in some cases, to fund
rehabilitation projects with a development orientation (see
box 12).

(1) DIPECHO stands for Disaster preparedness in DG ECHO.

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Box 12

High quality interventions and development orientation help
ensure sustainability

In Sri Lanka, the high quality of latrine construction should ensure
they will last for a long time. Furthermore the establishment of
hygiene committees in camps is a sustainable approach to hygiene
promotion.

In Indonesia, a project involving the construction of boats and a
wharf has a development orientation which emphasises sustainabil-
ity. Similarly a UN agency project in Sri Lanka aimed to improve
the efficiency of the Sri Lankan fleet through the construction of high
quality boats and through training in improved fishing techniques.

An NGO project in Indonesia for treating water with chemicals
funded under the 10 million euro emergency decision was followed
up by a second Commission funded project under the 80 million
euro decision concerning more sustainable water supply systems.

The sustainability of an NGO project in Indonesia is helped by the
fact that most activities in camps are organised by committee mem-
bers on a voluntary basis.

Assistance to homeless people: shelters in Sri Lanka
(Source: ECA)

CONCLUSIONS

45.
Following the tsunami of 26 December 2004 there was
a need to balance the desirability of a well planned intervention
with the necessity for rapid action. DG ECHO’s procedures per-
mitted a rapid response and the high level of funding of 123 mil-
lion euro proved appropriate, enabling DG ECHO also to meet

the needs of the conflict-affected population whilst in addition
helping to bridge the longer than expected transitional phase
between relief and reconstruction (see paragraphs 12 to 15).

46.
The decision to work with existing partners in Sri Lanka
allowed the Commission to fund the implementation of projects
despite the large number of newly arrived humanitarian organi-
sations with funds exceeding their needs. In Aceh DG ECHO did
not have a presence prior to the tsunami and there was a lack of
reliable information with the result that some projects agreed by
DG ECHO in the month following the tsunami were based on a
standard emergency response proposal rather than on an accu-
rate assessment of needs. The needs assessments of projects
agreed from February 2005 were more reliable due to the avail-
ability of more information and more time to prepare proposals
(see paragraphs 16 to 21).

The coordinating role of the United Nations was made
47.
difficult by the lack of reliable information on needs, the arrival
of a large number of humanitarian organisations and the lack of
capacity of local authorities, resulting in variations in the level and
quality of aid provided. Internal coordination between DG ECHO
and other Commission services has been good concerning the
link with the reconstruction phase. However, coordination with
the Civil Protection Mechanism was problematic in the initial
stages of the response (see paragraphs 22 to 26).

DG ECHO has a comprehensive system for monitoring
48.
and controlling projects which generally enable projects to be
modified to meet evolving needs. However, there is scope to pro-
vide written feedback to partners following monitoring visits, to
develop comparative cost information and to provide more
details on the sometimes complex organisational arrangements.
Monitoring reports do not systematically quantify the achieve-
ment of project objectives, and in the case of the a UN agency
project in Indonesia it was particularly difficult for DG ECHO to
obtain clear information on activities which had been carried out
(see paragraphs 27 to 39).

49.
The Commission funded projects have contributed
to covering the basic needs of the population in terms of shelter,
food, water and sanitation, health, psychosocial support, child
and family care and telecommunications. The Commission is also
financing projects to support disaster preparedness. However,
some project outputs have been less
than planned due
to increased costs and difficulties in obtaining goods and in
recruiting qualified staff. Some projects, in particular the water
and sanitation component of the UN agency project in Indone-
sia, reached fewer beneficiaries than initially planned mainly due
to an overestimation in the needs assessments. The sustainability
of projects has been helped by the high level of funding which has
enabled high quality interventions sometimes with a development
orientation (see paragraphs 40 to 44).

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RECOMMENDATIONS

50.
The Commission should consider the role it could play
in helping affected governments to manage donor coordination
more effectively to ensure that needs are met (see paragraph 22).

51.
The roles of DG ECHO and DG Environment (Civil Pro-
tection Mechanism) should be clarified to ensure a coherent
approach (see paragraphs 24 and 25).

A longer time-frame for emergency operations (e.g. nine
52.
months rather than six months) should be considered in order to
provide sufficient time for implementation (see paragraph 35).

53.
DG ECHO should strengthen its monitoring system in
order to include the following elements which could be incorpo-
rated in monitoring guidelines:

(a) written feedback to partners following monitoring visits (see

paragraph 30);

(b) development of
paragraph 36);

comparative

cost

information (see

(c)

explanation of
paragraph 37);

the

implementing arrangements

(see

(d)

information on what has been done where
paragraph 38).

(see

54.
The difficulties of access to documentation of projects
implemented by UN agencies should be taken into account in the
context of the Financial and Administrative Framework Agree-
ment (FAFA) (see paragraphs 32 and 41).

This report was adopted by the Court of Auditors in Luxembourg at its meeting of 11 May 2006.

For the Court of Auditors
Hubert WEBER
President

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Official Journal of the European Union

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ANNEX

MAP OF IMPACT OF TSUNAMI

Source: Tsunami Evaluation Coalition — Initial findings.

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THE COMMISSION’S REPLIES

EXECUTIVE SUMMARY

V.
It was inevitable that the Commission should accept some
standard emergency proposals in order to ensure that aid would
flow quickly to the victims. Accurate needs assessments only
became available in the second half of January 2005 and waiting
for these would have implied that humanitarian organisations
would not have received Commission funding until the end of
January which, under the circumstances, would have been clearly
unacceptable.

VI.
The Commission considers that, while there may have
been some specific difficulties at field level, the overall level of
coordination has improved compared to previous emergencies.
Within the critical period of the emergency, Commission services
kept one another regularly informed, with contacts at least twice
a day on average, and an exchange of information notes and situ-
ation reports.

(d) The Commission will reinforce the monitoring system to
accommodate the Court’s recommendations in the most
appropriate manner.

(e) Following discussions with the concerned organisations, this
matter was clarified and the Commission gained access to the
relevant documents. The verification of Commission funded
projects undertaken by UN Agencies is a subject that was
addressed within the April 2006 meeting of the EC-UN FAFA
working group.

INTRODUCTION

7.
As regards the Rapid Reaction Mechanism and the process
of linking relief, rehabilitation and development (LRRD), see the
Commission’s reply to point 26.

VII.
The Commission takes note of the Court’s suggestion to
further develop comparative cost information and retain more
details on organisational arrangements and quantification of
project achievements.

OBSERVATIONS

VIII.
In general, the international community’s initial relief
effort was not sufficiently coordinated. It was precisely for this
reason that, early on, the Commission placed great emphasis on,
inter alia, coordination activities and the reassessment of needs,
which led to the effectiveness of its relief effort. The original needs
assessment referred to in the example cited by the Court was
based on the initial calculation identifying a potential beneficiary
population of two million. The fact that the UN Agency only
reached 5 % of the beneficiaries does not mean that the remain-
ing 95 % have not received assistance but rather that they were
assisted by other agencies thus rendering UN’s aid unnecessary.

18.
The Commission’s policy is built on a needs based
approach. Where a partner is not able to benefit fully, then the
funding is reduced by the Commission even if the initial plan was
otherwise.

22. (a)
In both Sri Lanka and Indonesia, the Commission has
supported the relevant UN Agency in its role as sectorial leader
for livelihood recovery. As a result of these projects problems of
coverage, overlap, gaps and competition were mitigated and/or
limited in both countries.

IX.

(a) The Commission fully recognises the importance of the
national ownership on a disaster response and addresses this
issue both in its humanitarian assistance (requirement for
partners to coordinate with national and local authorities,
support to UNOCHA, field coordination by Delegations and
DG ECHO) and in its development programmes.

(b) The Commission fully endorses the Court’s recommendation
to clarify the roles of DG ECHO and DG Environment (Civil
Protection Mechanism) to ensure a coherent approach.

23.
The situation of overprovision of aid in some sectors and
not sufficient aid in others, as described in the special report, was
not related to the humanitarian aid provided by the Commission.

24 and 25.
While there may have been some specific coor-
dination difficulties at the field level, the overall level of coordi-
nation has improved compared to previous emergencies. Within
the critical period of the emergency, Commission services kept
one another regularly informed, with contacts at least twice a day
on average, and an exchange of information notes and situation
reports. The Commission will seek to further improve coordina-
tion between DG ECHO and the Civil Protection Mechanism as
recommended by the Court.

(c) The Commission had already identified the delays in some
project components mentioned by the Court and had taken
the required action (see paragraph 35). The Commission
considers that it is not appropriate to change the regulatory
base in order to extend the time-frame for primary emer-
gency and emergency humanitarian actions.

26.
The Commission established, only a few days after the
tsunami an inter-service group (Tsunami inter-service taskforce
— TIST) to ensure that all aspects of EU assistance were coordi-
nated, in particular to link relief, rehabilitation and development
(LRRD).

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In addition to the projects mentioned by the Court, other Rapid
Reaction Mechanism funded projects included a civil society con-
sultation on post-tsunami reconstruction plans in the early stages
of the preparation of the blueprint by the national government
and a support to strengthening local government capacity in deal-
ing with reconstruction.

The Commission agrees with the Court that in the case of a UN
Agency, sufficient information was not available during monitor-
ing, but would like to highlight that action was taken by the Com-
mission both at field and headquarters level and as a result
detailed information on output was provided in the final report.

By the end of 2006, the Commission will have committed a total
including
of 350 million euro for the reconstruction phase,
12 million euro from the Rapid Reaction Mechanism.

30.
The results of the Commission’s humanitarian and tech-
nical support personnel monitoring missions are recorded in the
Commission’s computerised project monitoring system which is
maintained by desk officers. Where considered necessary, feed-
back on the project is communicated by DG ECHO (HQ) to the
Commission’s partners. Nevertheless, the Commission recognises
the need to collate existing instructions in the form of specific
guidelines.

The Commission was aware of the short delay in report-
31.
ing. However, given the magnitude of the disaster and the chal-
lenges faced by the implementing partners, these delays were not
considered to be significant.

32.
Concerning access to documents maintained by UN
Agencies, this problem has been addressed in the context of the
FAFA working group.

33.
In addition to the tsunami projects controlled in the field,
the Commission checks the supporting documentation when it is
restituted to the partner’s headquarters. Each partner is audited as
part of a two-year cycle of audits. Therefore the average lapse of
time between the end of the project and the conduct of the audit
or verification of supporting documentation relating to tsunami
projects at partners’ offices is one year.

35.
Some Commission partners incurred occasional delays in
the implementation of some project components. The cases iden-
tified by the Court had already been identified by the Commis-
sion’s humanitarian and technical support personnel
(field
experts) during project monitoring and resulted in actions taken
at headquarters level. In the case of the UN project mentioned in
box 7 the Commission did not reimburse the cost of the treat-
ment plant at Pramuka. The Commission has moreover requested
that the partner upgrade the slow procurement procedures which
caused the delay before applying for further emergency funding
for the water and sanitation sector.

37.
Organisational arrangements are usually described in the
project proposals and analysed in the Commission’s internal writ-
ten appraisal of the funding requests. Nevertheless, the Commis-
sion undertakes to see how improvements can be made.

38.
Information on what has been done where is provided in
partners’ interim, pre-final and final reports, instead of in the
monitoring reports.

The FAFA does not automatically oblige organisations to provide
information on specific activities financed by the Commission.

40.
The Commission agrees that occasionally some partners
have delivered fewer outputs than was originally anticipated due
to difficulties in obtaining goods. All these incidents were detected
by the Commission’s monitoring and have led to action being
taken by the Commission.

In the UN’s case the needs assessment had been carried
41.
out in the week following the tsunami when little information
was available but the need to deliver aid acute. As a result, the
assessment clearly underestimated the response by the interna-
tional community and identified the totality of the population liv-
ing in affected areas as beneficiaries. The fact that the UN Agency
only reached 5 % of the beneficiaries does not mean that the
remaining 95 % have not received assistance but rather that they
were assisted by other agencies thus rendering UN’s aid
unnecessary.

The Commission will wait for improvement to be made in project
management by the partner before providing further funding for
water and sanitation activities in emergencies. It should further-
more be highlighted that following discussions with the Commis-
sion field and headquarters the partner provided detailed infor-
mation on activities which have been implemented in the final
report.

42.
The Commission recognised the problem at a very early
stage and contributed to address it with specific actions like those
described in box 4. Further improvement of coordination of relief
aid needs to be addressed in discussions with the rest of the main
donors and players in the humanitarian field. In this sense, the
Commission is one of the main actors of the Good Humanitarian
Donorship Initiative and is also actively involved in the discus-
sions about the UN Humanitarian Review Process.

CONCLUSIONS

Due to the difficulty of accessing the most affected areas
46.
in Aceh, it proved impossible to obtain accurate needs assess-
ments so soon after the occurrence of the disaster. It was there-
fore inevitable that the Commission should accept some standard
emergency proposals in order to ensure that aid would flow
quickly to the victims. Accurate needs assessments became only
available in the second half of January 2005 and waiting for these
would have implied that humanitarian organisations would not
have received Commission funding until the end of January,
the circumstances would have been clearly
which under
unacceptable.

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The Commission considers that, while there may have
47.
been some specific difficulties at field level, the overall level of
coordination has improved compared to previous emergencies.
Within the critical period of the emergency, Commission services
kept each other regularly informed, with contacts at least twice a
day on average, and an exchange of information notes and situ-
ation reports.

48.
The Commission takes note of the Court’s suggestion to
further develop comparative cost information and retain more
details on organisational arrangements and quantification of
project achievements. The UN project in Indonesia is not an
example of a weakness in the monitoring system, but a weakness
of this particular partner when it came to putting in place an
appropriate project management. Following discussions with the
Commission field and headquarters the partner provided detailed
information on activities which have been implemented in the
final report.

49.
In the case of the project mentioned by the Court, the
partner’s needs assessment was carried out in the week immedi-
ately following the tsunami when little information was available
and the need to deliver aid was pressing. The fact that the UN
Agency reached only 5 % of the beneficiaries does not mean that
the remaining 95 % were left without assistance but rather that
they were assisted by other aid agencies thus rendering UN Agen-
cies’ aid unnecessary.

RECOMMENDATIONS

50.
The Commission fully recognises the importance of the
national ownership on a disaster response. In a crisis context, the
Commission works through the UN system and has been sup-
porting OCHA (financially and operationally) in their coordina-
tion role which includes liaising with the national authorities. Fur-
ther, at field level, the Commission coordinates and exchanges
information with the national authorities through its Delegations
and, on more technical matters, through Commission’s humani-
tarian and technical support personnel present in the field. In
addition, partners funded by the Commission are required
to coordinate with national and local authorities.

The Commission also recognises that the capacity of govern-
ments to handle donor coordination in emergencies is best sup-
ported beforehand through structural development programmes
(for instance in the context of improving the country’s prepared-
ness to cope with natural disasters).

The Commission fully endorses the Court’s recommen-
51.
dation to clarify the roles of DG ECHO and DG Environment
(Civil Protection Mechanism).

The roles of the two services were discussed in May 2002, and
lead to a Memorandum of Understanding between DG ECHO and
DG Environment in March 2003. In view of the experiences since
that date and of the Court’s recommendation, the following steps
will be taken:

firstly, the Commission will better inform the institutions and
organisations involved in international emergency assistance
about the respective roles and functions of the Community’s
humanitarian assistance, managed by DG ECHO, and the Com-
munity Civil Protection Mechanism, managed by DG Environ-
ment, and the additional and specific assets the mechanism can
provide to the victims affected by major natural disasters. In addi-
tion, a joint note from the relevant Commission services to EC
Delegations in third countries in that respect is being prepared;

secondly, the Commission is committed to take on board key rec-
ommendations made by both the HAC and Civil Protection Com-
mittee, notably as regards the need to further refine the terms of
reference for the MIC operations.

52.
The Commission had already identified the delays in
some project components mentioned by the Court and taken the
required action (see paragraph 35). The Commission considers
that it is not appropriate to change the regulatory base in order
to extend the timeframe for primary emergency and emergency
humanitarian actions.

The Commission will reinforce the monitoring system to
53.
accommodate the Court’s recommendations in the most appro-
priate manner.

(d) The Commission believes that while it is true that emphasis
for DG ECHO (and the rest of the humanitarian actors) has
moved towards the evaluation of results, achievements
and impact, this does not mean that DG ECHO does not
adequately monitor project activities.

Information on what has been done where is furthermore
provided in partners’
interim, pre-final and final reports
instead of in the monitoring reports.

The matter has been reported to the UN and was dis-
54.
cussed at the April 2006 meeting of the FAFA Working Group.