Communication from the Commission to the Council and the European Parliament - EU Code of Conduct on Division of labour in Development Policy
Date: 2007-02-28
Institutions: European Commission
Subjects: European neighbourhood policy, coordination of aid, development aid, development policy, poverty, the EU's international role

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.2.2007 
COM(2007) 72 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

EU Code of Conduct on Division of labour in Development Policy 

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

EU Code of Conduct on Division of labour in Development Policy 

Introduction ................................................................................................................................ 3 

1. 

1.1. 

1.2. 

2. 

2.1. 

2.2. 

3. 

3.1. 

3.2. 

An unprecedented window of opportunity................................................................... 3 

The challenges.............................................................................................................. 4 

The opportunities ......................................................................................................... 4 

A complex set of intertwined concepts ........................................................................ 5 

The various dimensions of complementarity ............................................................... 5 

Principles for implementation ...................................................................................... 6 

The way forward: A more effective division of labour................................................ 7 

The approach: pragmatic and informed ....................................................................... 7 

The method: A Code of conduct .................................................................................. 8 

3.2.1.  Nature........................................................................................................................... 8 

3.2.2.  Scope ............................................................................................................................ 9 

3.2.3.  Principles...................................................................................................................... 9 

3.2.4.  Follow-up ...................................................................................................................11 

Conclusion................................................................................................................................ 12 

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INTRODUCTION 

European citizens want a stronger Europe, capable of improving the living conditions of the 
world's  poorest.  A  Europe  that  delivers  more,  better  and  faster  in  the  fight  against  global 
poverty. A more vocal Europe, with a political impact that matches the level of its financial 
generosity.  

But European citizens also want a more effective and efficient Europe. Over the last decade, 
the  multiplication  of  development  aid  activities  and  structures  has  led  to  a  complex  and 
expensive aid industry. In each developing country there are, on average, 350 donor missions 
per year. Too many donors are concentrating on the same countries and the same sectors. In 
Mozambique,  for  example,  there  are  no  less  than  27  donors  fighting  HIV.  As  a  result, 
developing  countries  can  often  hardly  cope  with  the  many  missions,  the  unnecessary 
administrative costs, the overlaps and duplications, and the differences in donor requirements, 
rules and conditionalities. This situation reduces transparency and increases the potential for 
corruption.  Other  countries,  such  as  the  Central  African  Republic  or  Somalia  suffer  on  the 
contrary from so-called donor fatigue, leaving them almost entirely up to themselves.  

A consensus is emerging that this opaque and complex situation is not sustainable and that the 
European Union (EU) should take the lead in addressing the problem. The emergence of new 
EU  donors  and  the  pledge  to  double  EU  aid  has  raised  further  awareness  that  radical 
improvement is necessary. With the adoption of the European Consensus for Development in 
20051, the EU created a new momentum. For the first time ever, the Council, the Parliament 
and the Commission agreed on a set of common values, principles and objectives for the EU's 
development  policy,  positioning  it  as  world  leader  in  development.  A  few  months  later,  in 
April 2006, the EU agreed on a package of measures to deliver more, better and faster aid.  

Time has come to move from rhetoric to action. Who does what is the essential question the 
EU  needs  to  address  if  it  is  to  make  progress  in  implementing  the  EU's  new  development 
policy. The objective of this Communication is therefore to present a set of concrete measures 
to  enhance  complementarity  and  division  of  labour  amongst  EU  donors.  To  achieve  this 
objective,  the  EU  must  analyse  the  main  challenges  and  opportunities  ahead  (part  1)  and 
redefine  the  concepts  and  principles  for  EU  action  (part  2).  On  this  basis,  the  EU  should 
define a way forward (part 3). 

1. 

AN UNPRECEDENTED WINDOW OF OPPORTUNITY  

Complementarity is not a new political issue. International donors and organisations such as 
the  Organisation  for  Economic  Co-operation  and  Development,  the  United  Nations  and  the 
World  Bank  have  a  long  standing  experience  in  trying  to  improve  complementarity.  At 
European  level,  the  Communications  and  Council  Resolutions  of  19952  and  19993,  many 

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OJ C 46, 24.2.2006. 
Communication from the Commission to the Council and the European Parliament on Complementarity 
between  the  Community’s  Development  Cooperation  Policy  and  the  Policies  of  Member  States, 
Brussels,  May  1995.  Resolution  of  the  Council  on  complementarity  between  the  Community’s 
Development Cooperation and Member States' policies and actions, Brussels, June 1995. 
Communication from the Commission to the Council and the European Parliament on Complementarity 
between  Community  and  Member  State  Policies  on  Development  Cooperation  -  COM(1999)  218, 

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reports,  and  various  pilot  initiatives  indicate  the  EU's  commitment  to  promote  division  of 
labour. The Joint Policy Statement of November 20004 on Development Policy was the first 
attempt  to  achieve  operational  complementarity  between  the  Commission  and  the  Member 
States  by  defining  areas  of  recognised  added  value  for  Community  assistance.  However, 
many of these policy initiatives failed to be translated into field reality because of the political 
and operational difficulties such an approach raised. 

1.1. 

The challenges 

Politics  and  visibility.  Development  cooperation  is  part  of  donor  countries'  foreign  policy 
toolbox. Donor countries may be reluctant to give up cooperation in a given sector or country, 
as it may lead to reduced visibility for their action. Visibility also has a domestic dimension. 
Parliaments and the public may become reluctant to support measures to pull out of directly 
poverty reduction-related sectors (e.g. education, children's health). 

Operational  challenges.  An  optimal  division  of  labour,  even  when  politically  desired  by 
donors, still entails operational challenges. Experiences exist where commitments were made 
in  partner  countries  and  where  governments  did  promote  harmonisation  processes  and 
division of labour among donors. Local processes, including those often referred to as Joint 
Assistance Strategies, were being developed early 2006 in about 15 countries. However, these 
laudable  initiatives  did  not  necessarily  lead  to  much  practical  progress  because  of  the 
operational difficulties involved. 

Use  of  existing  expertise.  Any  strategy  for  a  division  of  labour  must  take  account  of  the 
significant  differences  between  EU  donors.  Some countries  have  provided  large  volumes  of 
Official  Development  Assistance  (ODA)  for  a  long  time.  Others  have  maintained  strong 
cultural  and  political  ties  from  their  colonial  past.  Other  countries  still  have  only  recently 
started  development  co-operation.  Every  EU  donor  has  specific  expertise  and  can  play  an 
active  role  in  a  division  of  labour,  which  should  not  be  lost  but,  on  the  contrary,  fully 
capitalised upon. Division of labour should not lead to rigid bureaucratic approach but leave 
room for flexibility. 

1.2. 

The opportunities 

Building  on  a  new  global  and  European  consensus.  In  2005,  all  donors  signed  the  Paris 
Declaration underlining the importance of complementarity and the need to make full use of 
each other's comparative advantages, while respecting the ownership of partner countries. The 
EU has gone one step further. In its contribution to the Paris Declaration, based on the Report 
of  the  Ad  Hoc  Working  Party  on  Harmonization5,  the  EU  agreed  to  develop  an  operational 
strategy towards complementarity. This commitment was thereafter made an integral part of 
the  2005  European  Consensus  on  Development  and  is  a  central  element  in  the  EU  Aid 
Effectiveness Action Plan presented in 2006. Following this proposal, EU ministers agreed to 
develop  operational  principles  on  how  to  better  organise  the  division  of  labour  in  a  partner 
country  or  between  countries.  The  present  Communication  –progressively  elaborated  since 
2004 over seven presidencies with the participation of experts of the Members States– should 
be seen in the light this framework. 

6.5.1999.  Resolution  of  the  Council  on  complementarity  between  Community’s  and  Member  States 
Development policies, Brussels, May 1999. 
Joint statement on EC development policy by the Council and the Commission - November 2000. 
Endorsed by the Council in November 2004. 

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The EU: possible leadership, necessary responsibility. This increased European awareness is 
linked to its special responsibility, accounting for 52 % of worldwide ODA and 80% of the 
scheduled scaling up of aid. All EU donors share common development objectives, a common 
vision,  values  and  principles.  This  vision,  enshrined  in  the  European  Consensus  on 
Development, provides the basis on which to build shared responsibilities. Moreover, on the 
ground,  the  Commission  and  Member  States  already  have  country-level  coordination  and 
constant  dialogue.  EU  joint  programming  is  emerging.  The  European  Consensus  has 
recognised  budget  and  sector  support,  as  a  preferred  aid  modality,  offering  an  additional 
opportunity to further promote coordination, harmonisation and division of labour. 

Improving  performance.  The  EU  Donor  Atlas  has  identified  the  gaps,  duplications  and 
unnecessary  administrative  costs  that  limit  the  impact  of  aid  provided  by  EU  donors  and 
increase the burden put the partner countries. Reinforcing the complementarity of EU donors’ 
activities is a key factor in increasing Europe's performance as a donor of reference. 

2. 

A COMPLEX SET OF INTERTWINED CONCEPTS 

Complementarity  covers  a  wide  range  of  principles  and  concepts.  The  EU  must  assess  and 
clarify  all  these  dimensions  carefully.  Indeed,  agreeing  on  the  conceptual  framework  is  a 
prerequisite for joint action. At this stage, there are no clear internationally agreed definitions 
of  complementarity,  only  briefly  sketched  by  the  Paris  declaration.  It  is  therefore  important 
for  the  EU  toofferto  the  international  community  the  definition  of  key  concepts  and 
principles. 

2.1. 

The various dimensions of complementarity 

Complementarity is a concept of an organisational nature. It must be seen in terms of donors 
acting  in  complete  and  balanced  unison,  rather  than  being  merely  an  additional  planning 
exercise.  Complementarity  starts  with  co-ordination,  but  goes  much  further:  it  implies  that 
each actor is focusing its assistance on areas where it can add most value, given what others 
are doing. Hence, complementarity is the optimal division of labour between various actors in 
order to achieve optimum use of human and financial resources. Complementarity can take 
place in the five following dimensions which, all interact with each other and must be seen as 
a whole. 

In-country  complementarity:  as  set  out  above,  aid  fragmentation  leads  to  an  increased 
administrative burden and transaction costs in partner countries, diffuses policy dialogue and 
may  misallocate  resources.  Some,  often  politically  attractive  sectors  may  receive  excessive 
funding  while  some  other  -not 
important-  sectors  remain  under-funded.  The 
pharmaceutical  pathways  to  purchase  drugs  in  Kenya  involving  20  donors  through  13 
procurement  bodies  are  a  perfect  illustration  of  how  irrational  the  system  can  turn  out  (see 
Annex 7). 

less 

Cross-country  complementarity:  too  many  donors  focus  on  some,  often  success,  countries, 
while  leaving  too  often  aside  other,  often  fragile,  countries.  This  tendency  leads  to  an 
increasing  gap  between  "aid  darlings"  and  "aid  orphans".  Interesting  experiences  are  being 
developed to ensure a minimum of international support in countries where partnerships are 
difficult and domestic capacity limited. The EU has a special role to play in this respect: The 
EC  is  a  global  player  with  global  presence,  Member  States  have  close  linkages  with  all 
developing countries and the EU has formal agreements with almost all of them. 

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Cross-sector  complementarity:  not  all  donors  need  to  build  capacity  in  all  sectors.  Some 
donors  have  developed  specific  know-how  that  should  be  fully  used.  For  example,  the 
European Consensus on Development has stated the sectors and themes where the European 
Commission  should  globally  focus  its  activities  on.  Other  donors  have  taken  full  benefit  of 
their comparative advantage at agency level and established priority areas. The EU as a whole 
should be able to provide a complete “tool box” of thematic and sector operations, building on 
the specific expertise of individual donors. 

Vertical  complementarity:  the  emergence  of  global  aid  initiatives  and  of  regional 
organisations as major actors has established a complex set of development assistance layers. 
There are several areas where similar activities are undertaken simultaneously at the national 
(including  sub-national),  regional  or  international  levels.  New  synergies  need  to  be  thought 
through.  For  example,  cross-border  activities,  large-scale  projects  or  capacity  building 
projects are often planned both at national and regional levels.  

Cross-modalities and instruments complementarity: some initiatives involve a combination 
of various modalities or instruments, whose synergies need to be strengthened. For example, 
the  choice  is  often  on  how  to  complement  grants  with  loans  or  private  capital  flows.  Some 
donors  are  also  specialised  in,  or  have  a  favoured  type  of,  modalities  or  instruments  (i.e. 
budget support, project, technical assistance, or support to NGOs).  

2.2. 

Principles for implementation 

Ownership: The primary leadership and ownership in country-level division of labour should 
first and foremost lie with the partner country government. If such leadership and ownership 
do  not  exist,  the  EU  should  advance  such  a  process.  In  both  cases,  the  EU  should  play  an 
active  role  in  promoting  complementarity  and  division  of  labour.  All  initiatives  need  to  be 
built  on  existing  processes  whenever  possible,  and  readily  transferred  to  the  government 
whenever appropriate. The EU should provide capacity building support to partner countries 
to enable them to take responsibility6. 

Impact on aid flows: It is essential that division of labour is not implemented at the expense 
of global aid volumes or aid predictability . Increased volatility can pose major challenges for 
the recipient country's economy. The scheduled scaling up of aid provides an opportunity in 
this  context  but  EU  donors  should  avoid  sudden  aid  disruption.  Policy  changes  should  be 
introduced in collaboration with the partner countries. 

EU and donor-wide dimensions: As mentioned above, the EU has a special responsibility as 
provider  of  more  than  50%  of  worldwide  ODA.  Moreover,  the  EU's  shared  vision  and 
development objectives as well as its common political aspirations provide the ideal platform 
for an enhanced division of  labour. Therefore, the EU has first  and foremost to  organise  its 
own division of labour. This enhanced EU leadership and complementarity will also provide a 
basis for a better international division of labour. The European Consensus on Development 
established  the  principles  on  how  to  interact  best  in  those  two  mutually  reinforcing 
dimensions. 

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Conclusions of the Council and of the representatives of the governments of the Member States meeting 
within the Council on EU guiding principles on complementarity and division of labour (17/10/2006) - 
General principles. 

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Comparative  advantage  and  added  value:  Complementarity  should  be  based  on  the 
comparative advantage of donors in supporting partner governments (see definition in Annex 
2). EU donors should make full use of their respective comparative advantages to (i) enhance 
division  of  labour,  (ii)  deepen  concentration  of  activities,  and  (iii)  develop  delegated 
cooperation. Comparative advantage can be found also in sub-sectors or niche themes within 
sectors.  Examples  could  be  inclusive  education  within  the  education  sector,  fishing  within 
natural resource management, local administration in public sector reform, etc. The European 
Consensus defined the roles through which the Commission will aim to provide added value 
(paragraphs  46  to  55).  In  addition  to  its  role  as  a  donor,  the  Commission  has  a  recognized 
added  value,  in  developing  strategic  policies,  promoting  development  best  practices,  and  in 
facilitating coordination and harmonisation (paragraphs 50 and 51), as well as in the external 
dimension of internal Community Policies. 

Lead  donor  and  delegated  cooperation:  Delegated  cooperation  is  a  practical  arrangement 
where one donor (a “lead” donor) acts with authority on behalf of one or more other donors 
(the  “delegating”  donors  or  “silent  partners”).  The  practical  implementation  modalities 
including  those  related  to  the  issue  of  visibility  need  to  be  defined  between  leading  and 
delegating authorities. The level and form of delegation vary, ranging from responsibility for 
one element of the project cycle (e.g. a particular review) to a complete sector programme or 
even country programme7.  

European Neighbourhood & Partnership Policy (ENP): The ENP aims to build privileged 
partnerships  with  neighbouring  countries,  using  appropriate  –  including  development  – 
instruments  to  promote  effective  management  and  implementation.  Therefore  the  ENP  and 
the relevant financing instruments contain specific provisions for programming EU support at 
overall, country and regional levels, for political and sector dialogues, for the mobilization of 
particular  strengths  of  the  Member  States  (e.g.  through  twinning  programmes),  and  for 
coordination  by  the  Commission.  In  the  application  of  the  Code  to  these  provisions,  and  in 
accordance with Article 62 of the European Consensus, appropriate account will be taken of 
the broader political framework and the technical nature (approximation to the EU ‘acquis’) 
of the ENP. 

3. 

THE WAY FORWARD: A MORE EFFECTIVE DIVISION OF LABOUR 

Improving  complementarity  requires  changes  in  the  attitude  of  both  donors  and  recipient 
countries.  It  impacts  heavily  on  the  planning  processes  and  the  long-term  partnerships  in 
countries and in sectors. This will not happen overnight. A long-term perspective and a multi-
stage approach are therefore needed. 

3.1. 

The approach: pragmatic and informed 

Analyse and build on existing experiences. Improved complementarity and division of labour 
has been an objective of a number of national development policies and is under way. Lessons 
can  be  learned  from  good  practices,  but  also  from  those  initiativeswhich  have  not  led  to 
expected results (see Annex 3).  

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Definition  of  the  DAC  Guidelines  and  Reference  Series:  Harmonising  Donor  Practices  for  Effective 
Aid Delivery, Good Practice Papers. 

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Establish a political mandate. Development cooperation is based  on  political decisions and 
aid budgets are subject to parliamentary scrutiny. Changes are highly political decisions and 
work should be guided by a clear political mandate from the top level.  

Establish appropriate operational modalities. Complementarity is very much linked to how 
donors  organise  themselves  in  the  policy  planning,  programming  and  implementation  of 
development cooperation. Topics covered in on-going work regarding methodologies for aid 
delivery  include  the  roles  of  lead  and  active  donors  as  well  as  delegating  partners,  joint 
programming and joint financing arrangement. 

Have a pragmatic approach to implementation. Promoting complementarity should be based 
on a pragmatic approach aiming at concrete and tangible results. The extensive discussions in 
recent years on in-country complementarity should make an an early implementation possible. 
As  for  cross-country  and  cross-sector  complementarity,  further  political  discussions  are 
needed  to  guide  implementation.  At  all  stages  working  methods  should  remain  rational, 
transparent, and well balanced. 

Build  effective  monitoring  systems.  For  the  signatories  of  the  Paris  declaration,  the 
Organisation  for  Economic  Co-operation  and  Development/Development  Assistance 
Committee  (DAC)  monitoring  systems  provide  a  good  basis  for  permanent  monitoring  of 
progress.  In  other  countries,  existing  national  systems  should  be  utilised  with  as  few  new 
systems  established  as  possible.  The  EU  Donor  Atlas  and  the  annual  reporting  on 
implementation provide overviews at European level. 

3.2. 

The method: A Code of conduct 

It is proposed to adopt a Code of conduct that sets out operational principles with a view to 
ensuring better division of labour between EU donors. Based on good practices from the field, 
it has been drafted in close collaboration with Member States experts. The Code is embedded 
in the principles of ownership, alignment, harmonisation and management by results entailed 
in  the  Paris  Declaration  as  well  as  the  additional  objectives  and  values  highlighted  by  the 
European Consensus. 

The European Commission will apply this code on the basis of the objectives and principles 
laid out in the legal framework applicable to its development and external assistance policy, 
namely the Development and Cooperation Instrument and the European Development Fund. 

3.2.1.  Nature 

The Code is voluntary, flexible and self-policing. It is a 'soft' law to guide policy and actions, 
and  to  encourage  consistency  with  our  commitments.  The  Code  provides  principles  and 
standards  applicable  to  EU  development  aid  but  may  be  incorporated  and  form  part  of  any 
other similar local or international agreed code of conduct when such a code is developed. 

The Code is a dynamic document. It establishes targets, which EU donors will endeavour to 
reach progressively. It will be evaluated and revised periodically as information accumulates 
through its implementation and the monitoring of its progress. 

The Code is generic in nature and focuses on broad guidelines. It is elaborated on the basis 
of  desired  outcomes,  rather  than  a  prescriptive  set  of  procedures  to  attain  those  outcomes. 

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This approach allows flexibility for balancing the need for rapid results with the constraints 
that some EU donors will face in implementing those principles. 

The Code is directed towards all EU decision-makers who may be engaged in any form of 
definition and implementation of development assistance. Their compliance with the Code is 
encouraged. 

The Code is a contribution to the international agenda. It is hoped that donors around the 
world  will  find  it  useful  and  will  want  to  commit  themselves  publicly  to  abiding  by  it. 
Governments and donor bodies may want to use it as a yardstick against which to judge the 
conduct of those agencies with which they work. And partner countries have a right to expect 
those who seek to assist them to measure up to these standards. 

3.2.2. 

Scope 

Civil society activities and cooperation with private foundations represent an important part of 
the aid delivered in a given country, but enhanced complementarity between the private and 
the  public  spheres  belongs  to  another  debate.  Therefore,  while  fully  acknowledging  the 
importance of this dimension, this Code focuses only on the complementarity between public 
authorities. 

At  this  stage,  while  referring  to  the  five  components  highlighted  above,  the  proposed  Code 
will mainly focus on the first three dimensions of complementarity, i.e. on division of labour 
between  EU  donors  and  how  EU  donors  can  complement  each  others’  work  (in-country, 
cross-country and cross-sector). It will nevertheless reaffirm the need to address the remaining 
dimensions within other relevant contexts. 

Finally, this Codes addresses operational complementarity. It does not intend to touch upon 
any  institutional  set  up.  Nevertheless,  further  progress  on  division  of  labour  implies  change 
and  redeployment  of  activities  and  working  methodologies,  and  even  potential  structural 
adjustments. They need to be promoted and sustained by supporting measures. 

3.2.3.  Principles 

It  is  proposed  that  the  EU  donors  commit  themselves  to  the  following  principles  (further 
detailed in Annex 1): 

•  Guiding principle 1 - Concentrate their activities in-country on focal sectors 

EU  donors  will  focus  their  activities  on  two  focal  sectors  on  the  basis  of  their  respective 
comparative advantages. The partner countries will be encouraged to play an active role in the 
identification of the focal sectors. The European Consensus defined the roles through which 
the Commission will aim to provide added value (paragraphs 46 to 55). This is completed by 
the Treaty which recognizes the added value in the external dimension of internal Community 
Policies.  In  addition  to  the  two  focal  sectors,  which  should  absorb  the  bulk  of  available 
funding,  donors  can  provide  general  budget  support,  where  conditions  permit  to  do  so,  and 
finance activities in other areas such as support to civil society, research, or university/school 
co-operation. 

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Box 1: The European Commission Country Strategy Papers, as launched in 2001 and revised 
in  2005  define  the  strategic  programming  of  the  Commission's  aid  allocation  for  all 
developing countries. The concentration of activities and financial assistance on two sectors is 
a key principle of these Strategy Papers and has greatly increased the focus and efficiency of 
the Commission's cooperation. 

•  Guiding principle 2 - Redeploy their other activities in-country 

EU donors will redeploy aid activities that are not in their focal sectors, by either remaining 
engaged 
lead-donors  arrangements  and  delegated  cooperation/partnerships, 
redeploying into general budget support, or exiting in a responsible manner. 

through 

a) Sub Principle 2 a – Lead donorship arrangement 

EU donors will seek to establish lead donorship arrangement based on a substantial mandate. 

b) Sub Principle 2 b – Delegated cooperation/partnership 

If  a  given  sector  is  considered  strategic  for  the  partner  country  or  the  donor  and  there  is  a 
financing  gap,  EU  donors  may  enter  into  a  delegated  cooperation/partnership  arrangement 
with another donor. 

Box  2:  In  South  Africa,  the  UK  Department  for  International  Development  (DFID)  has 
delegated the implementation of its support to land reform to Belgium. In Rwanda, Sweden 
has delegated the monitoring and auditing of funds in support to the education sector to the 
DFID which is providing general budget support. 

•  Guiding principle 3 - Ensure an adequate EU presence in strategic sectors 

EU  donors  should  ensure  that  at  least  one  EU  donor  is  actively  involved  in  each  strategic 
sector considered relevant for poverty reduction. EU donors will furthermore seek to limit the 
number of active donors to a maximum of 3 per sector by 2010. 

•  Guiding  principle  4  -  Replicate  practices  in  the  cooperation  with  partner  regional 

institutions 

Taking into account the increasing/scaling up of aid volumes and activities at regional level, 
the  EU  donors  will  apply  the  above  principles  of  in-country  division  of  labour  also  in  their 
work with partner regional institutions. 

•  Guiding principle 5 - Establish priority countries 

EU donors will reinforce their geographical focus, through a dialogue within the EU, taking 
into  account  the  broader  donor  engagement.  As  stated  in  the  European  Consensus, 
Community assistance will remain universal. 

Box 3: As an example, the Netherlands have gone through a drastic reduction in the number 
of core/priority countries (from over 70 to some 20 priority countries), by broadly speaking 
using three selection criteria: (i) poverty level, (ii) macroeconomic performance and (iii) good 
governance performance. 

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•  Guiding principle 6 - Address the "orphans" countries of aid allocations 

EU donors will strive to dedicate part of their aid budget to "under funded" countries. These 
are  often  'fragile  states'  whose  stabilisation  has  a  positive  spill-over  effect  for  the  wider 
region.  

Box  4:  The  European  Community  Humanitarian  Office's  (ECHO)  aid  strategy  strongly 
focuses on forgotten crises. In 2002, ECHO has set as a target to channel 10% of its funds to 
forgotten crises. Today this target has been largely achieved. Already in the course of the year 
2004 support totaling €239 million was allocated to forgotten crises (i.e. 42% of total funds). 

•  Guiding principle 7 - Analyse and expand global areas of strength 

EU  donors  will  deepen  self-assessments  of  their  comparative  advantages.  They  should 
specialise more, while maintaining the diversity of expertise for the EU as a whole. 

The  Commission  will  further  develop  its  expertise  and  capacities  in  the  areas  where  it  has 
comparative  advantages,  paying  particular  attention  to  building  the  necessary  capacity  and 
expertise at the country level. 

•  Guiding  principle  8  -  Pursue  progress  on  the  vertical  and  cross-modality/instruments 

dimensions of complementarity 

EU  donors  commit  themselves  to  advance  on  the  other  dimensions  of  complementarity 
primarily in the context of relevant international fora and partnerships. 

•  Guiding principle 9 - Promote jointly the division of labour 

EU  donors  will  increasingly  rely  on  joint  statements  to  clarify  purpose,  modalities  and 
outcome of division of labour, and achieve greater impact of EU collective contribution. 

•  Guiding principle 10 - Deepen the reforms of aid systems 

EU donors recognize that division of labour will imply real structural changes, reforms and 
staffing consequences. 

3.2.4.  Follow-up 

For the reasons set out above, it is proposed that this Code of conduct is first adopted by the 
EU  and  opened  in  a  second  stage  to  all  donors  willing  to  join  this  good  practice.  The 
successful implementation of the Code will depend on a collective effort by Member States 
and the Commission and requires clear instructions. The role of Commission delegations and 
Member States’ field offices will be key in its implementation. 

The implementation of the Code should be strongly promoted and monitored. It should be part 
of  an  annual  debate  on  the  orientation  of  EU  Development  Policy  and  be  based  on  three 
elements: an annual sampling of country cases, an EU Donor Atlas adapted to a more political 
use,  and  the  EU  Development  Report  under  preparation.  The  Code  should  be  reviewed  in 
2010. 

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CONCLUSION 

in  a  progressive  manner,  on 

The lack of effectiveness of donors' collective input has become unsustainable. The EU has 
the duty to be pro-active in addressing this challenge. There is today a unique opportunity to 
to  enhance 
the 
deliver, 
complementarity and organise a real division of labour between donors. EU donors are invited 
to  adopt  the  proposed  Code  of  conduct  and  to  start  immediately  the  implementation  of  its 
principles, both for ongoing and future scaled up activities. The Commission will monitor and 
evaluate  the  status  of  its  implementation  through  ongoing  annual  reporting  and  regular 
country samplings. 

long-standing  commitment 

The EU must now go beyond policy statements and translate words into acts. Agreements on 
a division of labour would increase aid effectiveness, strengthen the role of development co-
operation  in  EU  external  relations  and  contribute  to  the  construction  of  a  European  identity 
based on the values contained in the European Consensus on Development. The EU has both 
the potential and responsibility to act as an engine for a donor-wide division of labour. 

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