Commission staff working document accompanying the Communication from the Commission to the European Parliament and the Council - Implementation of the European Neighbourhood Policy in 2008 - Progress Report Lebanon {COM(2009) 188 final} {SEC(2009) 511} {SEC(2009) 512} {SEC(2009) 513} {SEC(2009) 514} {SEC(2009) 515} {SEC(2009) 516} {SEC(2009) 517} {SEC(2009) 519} {SEC(2009) 520} {SEC(2009) 521} {SEC(2009) 522} {SEC(2009) 523}
Date: 2009-04-23
Institutions: European Commission
Subjects: European neighbourhood policy, Lebanon, impact study, the EU's international role

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 23.4.2009 
SEC(2009) 518 

COMMISSION STAFF WORKING DOCUMENT 

Accompanying the 

COMMUNICATION FROM THE COMMISSION  
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

Implementation of the European Neighbourhood Policy in 2008 

Progress Report Lebanon 

{COM(2009) 188 final} 
{SEC(2009) 511} 
{SEC(2009) 512} 
{SEC(2009) 513} 
{SEC(2009) 514} 
{SEC(2009) 515} 
{SEC(2009) 516} 
{SEC(2009) 517} 
{SEC(2009) 519} 
{SEC(2009) 520} 
{SEC(2009) 521} 
{SEC(2009) 522} 
{SEC(2009) 523} 

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1. 

BACKGROUND AND OVERALL ASSESSMENT 

Lebanon and the European Community first established contractual relations in 1977 through 
a  Cooperation  Agreement,  which  entered  into  force  in  1978.  The  Euro-Mediterranean 
Partnership  inaugurated  at  the  1995  Barcelona  Conference,  established  a  policy  with 
ambitious and long-term objectives. This partnership was reinforced in 2008 with the creation 
of the Union for the Mediterranean. The Association Agreement with Lebanon which entered 
into  force  in  2006,  sets  out  in  more  detail  the  specific  areas  in  which  the  relations  can  be 
developed  bilaterally.  On  this  basis,  the  EU-Lebanon  ENP  Action  Plan  was  adopted  in 
January 2007, for a period of five years. A first report was adopted in April 2008. 

Initial  institutional  cooperation  through  the  EU–Lebanon  Association  Council,  the  EU-
Lebanon Association committee and ten subcommittees, was established. Eight subcommittee 
meetings have already met, but only three of them during the course of 2008: the first meeting 
of  the  EU-Lebanon  “Research,  Innovation,  Information  Society,  Education  and  Culture” 
subcommittee  in  February;  the  second  meeting  of  the  EU-Lebanon  “Human  Rights, 
Governance and Democracy” subcommittee in November; and the third meeting of the EU-
Lebanon  subcommittee  on  “Justice,  Liberty  and  Security”,  also  in  November  2008.  The 
discussions  enabled  both  sides  to  exchange  views  about  latest  developments  and  advance, 
where possible, with the implementation of the Action Plan. 

This  document  reports  on  overall  progress  made  on  the  implementation  of  the  EU-Lebanon 
ENP Action Plan between January and December 2008, although developments outside this 
period  are  also  considered  when  deemed  relevant.  It  is  not  a  general  review  of  the  political 
and economic situation in Lebanon.  

After the end of the military conflict between Israel and Hezbollah in 2006, Lebanon entered 
a long political stalemate. In May 2008 an agreement was finally reached by the rival factions 
in  Doha  (Qatar)  marking  the  end  of  an  18-month  crisis.  The  Parliament  elected  Michel 
Suleiman  as  President  on  25  May  2008,  after  six  months  of  Presidential  vacancy  (President 
Lahoud’s mandate expired in November 2007) and 19 postponements of the voting session. 
Developments in Lebanon during the reporting period have to be assessed in the light of these 
developments. 

The  difficult  political  situation  throughout  2008  significantly  slowed  down  the  process  of 
implementation of the EU-Lebanon ENP Action Plan. Despite the institutional improvements 
(i.e.  appointment  of  the  National  Unity  Government  in  July),  draft  laws  adopted  by  the 
Government  prior  to  May  2008  were  not  debated  by  the  Parliament  due  to  a  legislative 
deadlock. The National Unity Government endorsed the “Paris III” reform agenda presented 
in January 2007, but little progress was achieved in putting these reforms in place. 

Progress  in  other  fields  (human  rights,  judicial  reform,  social  sector  reform,  and  regulatory 
and  administrative  reform)  was  also  slow.  This  situation  has  had  an  impact  on  the  overall 
social,  economic  and  political  situation  in  the  country  as  well  as  on  the  dialogue  in  the 
framework of the European Neighbourhood Policy. 

The  European  Commission,  through  its  Delegation  in  Beirut,  continued  to  organise  inter-
Lebanese fora enabling representatives of the parliamentary blocs and political parties and of 
the  civil  society  to  help  Lebanese  decision-makers  work  towards  a  common  vision  of 
development for Lebanon.  

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2. 

ENHANCED POLITICAL DIALOGUE AND REFORM 

Democracy and the rule of law 

Objectives in this area include: promoting the shared values of democracy and the rule of law 
including good governance and transparent, stable and effective institutions; fighting against 
corruption;  reform  of  the  electoral  law  and  the  electoral  framework;  enhancement  of  the 
independence and impartiality, the capacity and efficiency of the judiciary; and upgrading its 
quality and administrative capacity. 

In the area of electoral reform some progress was made. The electoral framework was revised 
in  view  of  the  next  parliamentary  elections,  scheduled  to  take  place  on  7  June  2009.  The 
legislation  adopted  in  September  2008  reverts  largely  to  the  districts  used  under  the  1960 
electoral  law.  While  the  new  law  introduced  some  improvements  (i.e.  creation  of  a  quasi-
independent body to supervise campaign financing and the media, voting in one day, abolition 
of voter cards and use of indelible ink to mark voters' hands), several important amendments 
proposed by the National Commission on electoral law headed by ex-Minister Fouad Boutros 
and  recommended  by  the  2005  EU  Election  Observation  Mission,  were  not  retained  (inter 
alia  pre-printed  ballot  papers,  creation  of  an  independent  electoral  commission,  women 
representation,  lowering  of  the  voting  age  to  18  years  or  allowing  Lebanese  citizens  living 
abroad to vote). In 2008, the European Union replied positively to an official request of the 
Ministry  of  Interior  and  Municipalities  by  granting  a  EUR  4  million  package  to  assist  the 
Lebanese authorities in implementing the electoral reform and help with the preparation of the 
electoral  process. The  EU  has  declared  its  readiness  to  deploy  an  EU  Election  Observation 
Mission  for  the  2009  parliamentary  elections.  The  Lebanese  government  has  indicated  it 
would welcome such a mission. 

As regards judiciary reform insufficient progress was made. Detention conditions are poor 
and the overcrowded prisons do not meet international standards. No progress was reported in 
the area of early release from prison. Nevertheless the position of a “juge d’application des 
peines” was created which should improve the situation. Lebanon has announced its decision 
to  complete  the  transfer  of  prison  management  from  the  Ministry  of  Interior  and 
Municipalities  to  the  Ministry  of  Justice  within  five  years  starting  from  2008.  The  EU  is 
involved in financing the initial phases of the project. The European Commission is preparing 
a project aimed at supporting the efficiency and independence of the judiciary. 

Progress  on  the  implementation  of  the  administrative  reform  strategy,  prepared  by  the 
Minister  of  State  for  Administrative  Reform,  has  been  limited.  Nevertheless,  key  pieces  of 
legislation  have  been  drafted  on  Unlawful  Gain  of  Civil  Servants,  on  Creation  of  a  Public 
Procurement  Authority,  on  Conflict  of  Interest  and  an  Implementation  decree  for  the 
Ombudsman.  The  initiative  to  facilitate  citizens’  access  to  information  by  creating  special 
information desks (“bureaux d’acceuil”) in three ministries is stagnant.  

Parliamentary approval for ratification of the United Nations Convention against Corruption 
was  granted  in  October  2008.  However,  national  legislation  to  implement  the  convention  is 
still not in place and the ratification process is not completed. The development of a national 
anti-corruption strategy to address public and private sectors in line with commitments under 
the convention is awaited. 

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Some  progress  can  be  noted  in  the  area  of  regional  reform.  The  President  of  the  Republic 
reiterated  the  importance  of  decentralisation  for  the  sustainable  economic,  social  and 
environmental development of the country.  

Human Rights and Fundamental Freedoms 

Objectives in this area include: supporting freedom of the media and freedom of expression; 
supporting  freedom  of  assembly,  association  and  the  development  of  Civil  Society;  fighting 
against  torture  including  implementation  of  UN  Conventions;  promotion  of  the  rights  of 
women  and  children;  fighting  against  discrimination,  racism,  religious  intolerance, 
xenophobia and racial hatred discourse; and promotion of fundamental social rights and core 
labour standards. 

A comprehensive human rights strategy, although discussed by the Human Rights Committee 
of the Lebanese Parliament,  is still not finalised. Apart from the ratification of the Optional 
Protocol to the Convention against Torture and other Cruel, Inhuman or Degrading Treatment 
or  Punishment  (OPCAT),  the  ratification  of  a  number  of  international  human  rights 
conventions remained blocked. Lebanon has eight overdue reports of UN Treaty Bodies and 
it has not extended a standing invitation to all thematic special procedures. 

Although a law creating the office of an Ombudsman was adopted in 2005, the nomination 
of  an  office-holder  is  still  pending,  as  reported  last  year.  An  organizational  decree  was 
prepared  in  October  2008  regarding  the  modalities  (“modus  operandi”)  of  the  Ombudsman 
institution. The Council of Ministers still has to give its agreement on the decree. 

Lebanon maintained the existing de facto moratorium on executions, but a number of death 
sentences were issued in 2008. The Minister of Justice presented a draft law on abolition of 
the  death  penalty  to  the  Lebanese  government  in  August  2008,  but  its  adoption  is  still 
pending. In December 2008, Lebanon abstained from the vote on the 2008 UNGA Resolution 
63/168 calling for a worldwide moratorium on the use of the death penalty. 

The Lebanese penal code prohibits torture, but several alleged cases of torture, ill-treatment 
and  arbitrary  detention  were  reported.  In  order  to  promote  human  rights  and  prevent  their 
violations,  the  Lebanese  Internal  Security  Forces  (ISF)  issued  a  decree  in  March  2008 
establishing the first unit for Human Rights within the ISF. This unit has however not been 
given adequate resources. After the ratification of OPCAT in December 2008 (see above), the 
creation of a national prevention mechanism must follow.  

No  significant  progress  was  reported  in  the  area  of  freedom  of  expression.  Media  play  an 
important role in the country and their independence is generally respected, although cases of 
harassment  of  journalists  are  still  reported.  Investigations  into  killings  of  prominent 
journalists in the past years have not been completed. Media outlets were attacked during the 
events  of  May  2008.  Fair  reporting  will  be  crucial  for  a  balanced  coverage  of  the 
parliamentary campaign.  

In  the  area  of  social  integration  of  migrants,  little  progress  was  made  as  regards  migrant 
domestic  workers  that  are  excluded  from  the  labour  laws  and  often  face  exploitation  and 
abuse by their employers. A National Steering Committee chaired by the Ministry of Labour 
was  active  with  little  tangible  results.  Cases  of  frequent  mistreatment  and  high  rate  of 
unnatural fatalities amongst domestic workers were reported. The conditions in the temporary 
detention centre for refugees at Adlieh remain extremely poor, despite the efforts undertaken 

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by NGOs and General Security to improve the situation and decrease the number of detainees. 
Nevertheless  the  Ministry  of  Labour  passed  a  decree  after  the  reporting  period,  in  January 
2009, with the aim of regulating the employment agencies that bring migrant domestic help to 
Lebanon.  The  decree  has  been  followed  by  the  adoption  of  a  Unified  Contract  for  Migrant 
Domestic Workers. 

In  the  area  of  asylum  and  protection  of  refugees  progress  made  is  insufficient.  The  overall 
situation of Palestinian refugees in Lebanon1, more or less 400 000 registered at UNRWA, 
remained unchanged throughout the reporting period. Initial progress noted at the beginning 
of 2008 on regularisation of the status of “non-identified” refugees of Palestinian origin has 
been  halted.  The  Palestinian  refugees’  right  to  work  and  register  property  is  not  secured, 
which has negative implications for their welfare and security. 

Since  Lebanon  has  not  ratified  the  1951  Geneva  Convention,  refugees  and  asylum  seekers 
(mostly Iraqis, Sudanese and Kurds) do not receive any protection, except for those few who 
are temporarily recognised by UNHCR (3000). The vast majority of the 50 000 Iraqi refugees 
living in Lebanon (UNRWA estimates), are treated as illegal immigrants and a small number 
have  been  subject  to  arrest  (140  in  2008  according  to  UNHCR),  fines,  and  indefinite 
detention.  

The  lifting  of  reservations  to  the  Convention  on  the  Elimination  of  All  Forms  of 
Discrimination against Women (CEDAW) related to the personal status of women, to which 
Lebanon  is  a  party,  is  still  pending.  The  issue  of  transmission  of  nationality  by  women  has 
still  not  been  solved.  However,  the  Government  stated  in  August  2008  that  it  would  work 
towards ensuring equality between men and women, in particular by addressing all forms of 
violence  against  women.  The  Ministry  of  Social  Affairs  is  supporting  efforts  of  NGOs  in 
raising  awareness  on  gender-based  violence,  and  preparations  for  the  establishment  of  a 
national  committee  in  charge  of  drafting  a  law  for  domestic  violence  are  on-going. 
Furthermore,  Lebanon  is  working  on  amending  the  provisions  of  the  Penal  Code  related  to 
rape and honour crimes. 

With respect to rights of children, national data are lacking on the magnitude of the problem 
of  child  labour:  the  minimum  age  for  work  remains  13,  and  not  15  as  stipulated  in  ILO 
convention  182,  and  the  administration  has  poor  institutional  capacity  to  enforce  the 
legislation already in place. 

Despite the existence of juvenile courts and two juvenile prisons, not all children are tried by 
these courts and in many cases children are still detained together with adults. Although there 
is no confirmation of an active recruitment of children by armed groups, a significant number 
of youth and children (both Lebanese and Palestinian) have been seen participating in armed 
clashes. 

As far as fundamental conventions and core labour standards are concerned, Lebanon has 
not  yet  ratified  the  International  Labour  Organisation  (ILO)  Convention  87,  concerning 
Freedom of Association and Protection of the Right to Organise.  

1 

Without prejudice to the settlement of the Palestinian question in the framework of the regional peace 
process. 

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Cooperation  on  foreign  and  security  policy,  regional  and  international  issues,  conflict 
prevention and crisis management 

Objectives  in  this  area  include:  cooperation  on  foreign  and  security  policy,  regional  and 
international issues, conflict prevention and crisis management and common security threats 
in  accordance  with  national  law;  non-proliferation  of  weapons  of  mass  destruction  (WMD) 
and  their  means  of  delivery  and  illegal  arms  exports;  and  cooperation  on  preventing  and 
combating terrorism. 

Dialogue  in  this  area  has  so  far  mainly  focused  on  implementation  of  the  major  UNSC 
Resolutions relevant for and relating to Lebanon, such as UNSC Resolution 1559, 1701 and 
the establishment of the Special Tribunal for Lebanon. 

The  work  of  the  International  Independent  Investigation  Commission  continued  throughout 
the  reporting  period  with  its  mandate  being  extended  until  the  end  of  February  2009.  The 
European Commission provided political and financial support to the creation of the Special 
Tribunal for Lebanon in The Hague.  

The first step towards a normalisation of relations with Syria was taken in October 2008, by 
the  official  establishment  of  diplomatic  relations.  Concrete  work  on  other  issues  as  agreed 
between the Presidents of the two countries in a joint communiqué issued in August 2008 is 
also expected. This should include the appointment of ambassadors and opening of embassies 
in both countries, the renegotiation of bilateral agreements and a genuine dialogue on the fate 
of the Lebanese and Syrian disappeared. The reactivation of the Joint Committee on Border 
Delimitation  and  stronger  cooperation  in  border  control  and  management  should  also  take 
place. A dialogue with Syria on these issues started in 2008 and should aim at a more efficient 
management of the common border. (More on border control in section 5).  

Discussions on a national defence strategy were launched during 2008 and have progressed, 
albeit at a slow pace. Limited progress was achieved within the reform of the security sector. 
Nevertheless,  capacities  of  the  security  forces  for  investigating  serious  crimes,  maintaining 
public  order  or  combating  terrorism  improved,  notably  thanks  to  contributions  by  different 
donors. 

Lebanon is still not party to the 1997 Ottawa Treaty on landmines. Lebanon was among the 
first  signatories  of  the  Cluster  Bombs  Treaty  in  Oslo  in  December  2008.  Lebanon  is  still 
contaminated  by  cluster  munitions  and  unexploded  ordnance  both  from  the  2006  military 
conflict and from the civil war. According to experts, the number of  casualties from  cluster 
munitions fell significantly in the last 2 years. In 2008, thanks to EC-funded projects 1 975 
491 square meters of land were cleared.  

3. 

ECONOMIC AND SOCIAL REFORM  

Macroeconomic framework and functioning market economy 

The Lebanese economy has so far been quite resilient to direct impact of the global financial 
crisis, in particular as regards the effects on the highly leveraged banking system. Lebanese 
banks  had  minimal  exposure  to  “structured”  products,  thanks  to  long-standing  directives  by 
the Banque du Liban supervisors. 

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The  latest  economic  indicators  suggest  however  a  slowdown  of  growth  in  Lebanon  in  the 
wake of the global financial crisis. The most recent estimates from the Lebanese authorities 
suggest real GDP growth of 3% in 2009, a strong deceleration from the 6% growth expected 
to  have  been  reached  in  2008.  Lebanon  is  exposed  to  the  crisis  impact  via  export  prospects 
and rapidly diminishing FDI, a decrease in the number of tourists (Arab citizens and Lebanese 
expatriates mainly) and via a reduction in remittance flows. 

Consumer prices (CPI), as measured by the Central Administration for Statistics, increased by 
5.5%  in  2008,  with  inflation  moderating  in  the  latter  part  of  the  year  on  the  back  of  falling 
commodity prices.  

However  inflation  risks  are  still  looming,  as  the  delayed  pass-through  of  commodity  price 
shocks  and  inefficiencies  and  high  mark-ups  in  the  distribution  chain  notably  add  to  the 
stickiness of inflation. The current account deficit widened to around 11% of GDP in 2008, 
from  7.2%  of  GDP  in  2007.  The  high  external  deficit  (for  a  large  part  financed  by  string 
remittance  inflows  now  under  strain)  and  heavy  debt  burden  make  the  Lebanese  economy 
vulnerable to a further deterioration in sentiment and financing conditions vis-à-vis emerging 
markets. 

As  regards  public  finances,  the  budget  balance  (including  grants)  is  estimated  to  have 
improved slightly in 2008, with a deficit of 10.2% of GDP (from 11.0% in 2007). As a result 
of  the  strong  increase  of  the  nominal  GDP  (8%  deflator  according  to  the  IMF);  the  total 
debt/GDP ratio is estimated to stand at around 160% of GDP at the end of 2008. A modern 
Debt Management Department was created in 2008 at the Ministry of Finance to improve the 
management  of  the  public  debt.  The  IMF  and  EU  Macro  Financial  Assistance  financial 
support should help alleviate the pressure on public finances. In this respect the Government 
should focus its attention on meeting the conditionalities attached to this budgetary support.  

In  2007  and  the  first  part  of  2008,  the  stalling  of  Parliament  activities  prevented  the 
implementation of the main economic reforms to which Lebanon had committed at the Paris-
III conference. Especially affected are the three main axes of the reform; fiscal consolidation, 
social reforms and privatisation. Beyond the privatization of main mobile telephony operators 
(over the future of which there is little consensus among political parties), other privatisation 
decisions are also adjourned due to the financial crisis. Many draft laws related to Lebanon’s 
WTO accession also remain pending. 

Employment and social policy 

As  mentioned  in  the  first  section,  many  social  reforms  foreseen  under  Paris  III  have  been 
delayed. It is not expected that there will be any breakthrough before the general elections of 
June 2009 and the constitution of a new government.  

The socio-economic situation of Lebanese citizens considerably worsened over the reporting 
period, in particular due to the increase in international food prices. In order to mitigate the 
impact of this situation, the Government maintained control of the price of a standard package 
of bread, despite the international rise in the price of wheat. The Government announced in 
May 2008 an immediate cancelling of all import duties levied on many basic food products 
not produced in Lebanon, notably varieties of frozen meats, milk powder, rice, vegetal oils, 
pastas,  tea,  coffee,  sugar,  etc.  The  difficult  socio-economic  situation  led  to  several 
demonstrations  and  social  tensions.  This  led  the  Government  to  take  the  decision  in 

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September  2008,  to  increase  the  minimum  wage  (the  first  increase  since  1996)  and  public 
sector wages. Around 28% of the population lives under the poverty line. 

As regards employment, the lack of labour policy and the lack of regulations on the labour 
market  continue  to  favour  the  inflow  of  unprotected  and  unqualified  migrant  workers, 
constituting 20% of the work force and competing with local unqualified workers, a situation 
that  remains  an  issue  of  concern.  The  administrative  capacity  of  the  National  Employment 
Office  is  being  strengthened.  Lebanon  participated  in  the  first  Euromed  Conference  of 
Employment and Labour Ministers in November 2008.  

The  implementation  of  the  2007  social  action  plan  progressed  slowly.  A  strategy  to  fight 
poverty  is  under  preparation  at  the  Ministry  of  Social  Affairs  with  the  assistance  of  an 
external consultant.  

In 2008, the European Commission funded several projects on social inclusion and the fight 
against discrimination. 

No progress can be reported in the fields of pension reforms and social security system. 

On  social  dialogue,  Lebanon  drafted  a  new  labour  law  together  with  the  ILO,  but  the  draft 
has  not  been  yet  been  adopted  by  the  Council  of  Ministers.  Preparations  of  a  Decent  Work 
Country Programme within the ILO are on-going. No development took place as regards the 
active  functioning  of  the  economic  and  social  committee.  As  part  of  the  series  of  inter-
Lebanese fora, the European Commission organised a forum on social policies in April 2008, 
bringing 
together  representatives  of  all  Lebanese  parliamentary  blocs,  professional 
associations and the General Confederation of Lebanese Workers, to discuss employment and 
labour market issues, education, health and safety nets. 

At  a  Ministerial  statement  of  August  2008,  Lebanon  reiterated  its  commitment  to  enhance 
women’s participation in social, economic and political life. Three members of the General 
Assembly  of  the  National  Commission  for  Women’s  affairs  were  appointed  in  September 
2008. The draft electoral  law  aiming  at setting up  a minimum  number  of  female candidates 
per list, was rejected by the Parliament in September 2008.  

Work  on  land  use  planning  is  advancing  and  the  approval  of  the  “Schéma  directeur 
d’Aménagement  du  territoire  Libanais”  took  place  in  March  2009,  outside  the  reporting 
period. This comprehensive document could serve as the basis for a fully fledged sustainable 
development strategy. However, due to the political situation in the country no progress on 
this was reported during 2008.  

No progress can be reported on the implementation of the Action Plan commitment in the area 
of agriculture and fisheries. Although no sector strategy is being agreed at the level of the 
Government, the adoption of the land use planning (as reported above) would have an impact 
on the reform of the agriculture sector. 

4. 

TRADE-RELATED ISSUES, MARKET AND REGULATORY REFORM 

The EU remained the first trading partner of Lebanon. Bilateral trade in goods with the EU 
continued to grow, amounting to more than EUR 4.2 billion in 2008, with a significant trade 
deficit for Lebanon. Imports from the EU grew by 17.8%, while exports increased by 16.4%. 
Tariff  dismantling  as  a  whole  is  proceeding  as  foreseen  in  the  Association  Agreement. 

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However, some concerns remain on the treatment of goods originating in the EU that transit 
the Beirut port free zone before entering Lebanon. Negotiations on the liberalisation of trade 
in agriculture have not yet been launched. At the beginning of 2009 Lebanon announced its 
willingness to start discussions on the issue. 

Lebanon  continued  to  work  towards  its  accession  to  the  WTO.  However,  several  relevant 
draft laws have not yet been discussed by Parliament. In July 2008 Lebanon submitted several 
pieces of legislation to the WTO Secretariat, including on Intellectual Property Rights (IPR) 
and  Sanitary  and  Phyto-sanitary  Measures  (SPS).  The  WTO  Secretariat  held  a  6th  Working 
Party meeting in February 2009. 

In view of exploring areas with export potential to the EU and further identify the constraints 
facing Lebanon’s integration into the world trade system, the Ministry of Economy and Trade 
launched  a  Trade  Needs  Assessment,  in  December  2008,  with  the  support  of  the  European 
Commission. 

Substantial  progress  was  made  in  the  negotiations  concerning  the  establishment  of  a  new 
mechanism for the settlement of bilateral trade disputes in the framework of the Association 
Agreement,  with  the  view  to  concluding  these  negotiations  and  signing  the  Protocol  on  a 
bilateral Dispute Settlement Mechanism in 2009. Lebanon actively participated in the Trade 
Senior  Official’s  Working  Group  set  up  to  draw  a  Euromed  Roadmap  on  next  steps  in  the 
field of trade till 2010 and beyond. This roadmap is due to be adopted at the Euromed Trade 
Ministerial in autumn 2009. 

No progress can be reported on the implementation of the Action Plan commitment in the area 
of customs.  

On free movement of goods and on technical regulations, Lebanon made slow progress in 
preparing for the negotiations of an Agreement on Conformity Assessment and Acceptance of 
Industrial  Products  (ACAA).  The  priority  sectors  include  construction  products,  electrical 
appliances  and  pressure  equipment.  The  ACAA  National  Committee,  established  already  in 
2005, continued to review progress in transposition of European standards into Lebanese law 
in the selected priority sectors. The ‘ACAA action programme for the implementation of the 
Palermo Action Plan for the Free Movement of Industrial Products’ was prepared. It will be 
implemented by the ACAA National Committee. The work on the law on general conditions 
for  technical  regulations  and  conformity  assessment  is  progressing,  as  well  as  on  the 
Standardisation Law, but neither has yet been discussed by the Council of Ministers. The draft 
law on metrology is under preparation. 

In the area of sanitary  and  phyto-sanitary issues, Lebanon continued to  work towards the 
establishment of a food safety agency and prepared a draft law on animal quarantine, which 
awaits parliamentary approval. The draft food safety law was rejected by Parliament. Lebanon 
continued  its  participation  in  workshops  under  the  European  Commission’s  “Better  training 
for safer food” programme. 

Insufficient  progress  was  made  in  improving  the  business  climate.  However,  Lebanon 
continued  to  implement  the  2007  administrative  simplification  programme,  involving  the 
Lebanese post office LibanPost, with the aim of establishing one-stop shop in post offices to 
obtain  company  registration  and  developing  easily  accessible  standard  forms  for  business 
registration. This is still to be completed and extended to licensing procedures. Lebanon also 
worked on making its public register of companies available online. The third inter-Lebanese 

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forum  organised  by  the  European  Commission  Delegation  in  Beirut  on  the  issue  of 
competitiveness  emphasised  the  need  to  develop  a  comprehensive  policy  approach  towards 
building  a  stratum  of  small-  and  medium-sized  enterprises  (SMEs)  in  all  sectors  of  the 
Lebanese economy. 

As  regards  company  law  and  the  right  of  establishment,  accounting  standards  are  under 
review  and  the  draft  law  on  bankruptcy  remains  to  be  adopted.  The  draft  budget  law  2008 
provides  for  the  cancellation  of  import  license  fees  and  the  elimination  of  foreign  branches 
fees.  

Lebanon has taken part in the regional phase  of  negotiations on  the framework protocol for 
the liberalisation of services and right of establishment, as indicated last year, but the bilateral 
negotiations have not yet been launched. 

In  the  field  of  financial  services,  the  Central  Bank  continued  to  take  steps  to  improve  its 
operating procedures. It worked towards adopting International Financial Reporting Standards 
(IFRS)  through  an  implementation  roadmap  which  was  drafted  at  the  end  of  2008.  The 
Central Bank was also committed to implementing the Basel II principles despite the political 
and  security  developments  in  the  country.  The  insurance  sector  still  suffers  from  a  lack  of 
transparency and disclosure of operations. Meanwhile, Lebanon also continued to implement 
the recommendations of the IMF Financial Services Assessment Programme (FSAP).  

Other key areas 

The  Tax  Procedure  Code  was  adopted  in  October  2008  and  entered  into  force  in  January 
2009. It aims at simplifying tax procedures, reducing tax penalties and providing for a clear 
statute of limitation for tax controls as well as for a new appeal system for taxpayers. 

The  new  draft  of  the  competition  law  is  still  not  adopted.  However,  preparatory  work 
continued for the establishment of an independent national competition council, and TAIEX 
training  was  provided  by  the  EU.  Continued  capacity-building  and  awareness-raising  on 
competition  matters  remain  priorities  in  Lebanon.  Lebanon  has  established  a  list  of  existing 
state aids but still needs to define categories of compatible state aid.  

Lebanon prepared a number of key legislative acts in the area of intellectual property rights 
which have not yet been discussed by the Parliament. In October 2008, the Government took 
the  decision  to  recruit  100  persons  for  consumer  protection,  some  of  whom  will  also  deal 
with IPR enforcement. No funds have however been identified to finance these posts. 

The  public  procurement  law  as  well  as  the  draft  Public  Procurement  Management  Law 
drafted in 2007, still await parliamentary approval. The general conditions of contract, dating 
back to 1943, are also under review.  

Lebanon  continued  its  activities  on  statistics  in  the  framework  of  the  Euro-Med  regional 
MEDSTAT  II  programme  to  further  approximate  with  EU  standards.  This  programme  also 
included  the  provision  of  training  and  equipment.  In  October  2008,  Lebanon  presented  a 
national  master  plan  for  statistics.  Its  implementation  and  funding  modalities  remain  to  be 
defined.  Further  efforts  are  needed  to  enhance  inter-agency  cooperation  and  to  broaden  the 
coverage and the availability of statistics data. 

On external audit, the role of the Court of Accounts as an ex post agency was not revived to 
oversee  public  expenditure  in  relation  to  budgetary  allocations,  thus  weakening  efforts  to 

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enhance capacity to oversee public finances in the context of the fight against corruption and 
conflicts of interest. A draft law on illicit gain and disclosure of wealth by public servants is 
being examined by the Constitutional Council. 

In the area of public internal financial control insufficient progress was achieved to improve 
transparency  and  accountability  of  public  administration.  Nevertheless  the  required  controls 
for public expenditure monitoring were put in place in most Ministries, under the supervision 
of the Ministry of Finance. Central audit and compliance teams were formed to develop a new 
audit strategy based on risk management criteria with reference to international standards and 
methodologies.  The  implementation  of  the  principle  of  managerial  accountability  and  the 
development of financial management and control systems was not yet a focus. As during the 
last  reporting  period,  a  Central  Audit  Coordination  Unit  within  the  Ministry  of  Finance 
remains to be established.  

On enterprise policy, the 2008 assessment of the implementation of the Euro-Mediterranean 
Charter for enterprise shows some progress in the areas of access to finance, innovation and 
public-private consultation. The Government has not yet established an overarching strategy 
for enterprise policy, but some coordination efforts have been made, in particular as a result of 
the  competitiveness  forum  organised  by  the  European  Commission  in  October  2008.  The 
integrated small and medium-sized enterprises (SME) support programme, designed in 2005, 
has supported the creation of three business development centres that operate in some regions 
of the country targeting the development of SMEs.  

5. 

COOPERATION ON JUSTICE, FREEDOM AND SECURITY 

The first EU-Lebanon subcommittee on Justice, Freedom and Security was held in November 
2008, which provided the opportunity to exchange views about the latest developments in this 
field. 

In December 2008 the Council of Ministers approved a decree regarding a border control and 
border management strategy, creating a special Borders' Steering Committee chaired by the 
PM and composed of the Ministers of Defence, Public Works and Transport, Foreign Affairs, 
Finance and Interior and Municipalities. The decree provides for the extension of another 70 
km eastward of the work carried out in the north by the Common Border Force. A report on 
lessons learned in the ‘northern border pilot experience’ has been presented to donors.  

As  regards  migration,  no  progress  is  reported  on  the  exchange  of  information  on  transit 
migration,  readmission,  consular  affairs,  the  management  of  migratory  flows,  and  on  the 
movement of persons. No progress has been made as regards the  issue of  migrant  domestic 
workers, as reported in the section on Human Rights. 

No  developments  took  place  with  regard  to  implementation  of  new  national  legislation 
following  ratification  of  the  United  Nations  Convention  against  Transnational  Organized 
Crime  and  its  three  Additional  Protocols  at  the  end  of  2006.  In  November  2008,  Lebanon 
signed  a  bilateral  agreement  with  Turkey  against  terrorism,  drug-trafficking  and  organized 
crime.  In  an  attempt  to  combat  cybercrime,  a  draft  law  on  Internet  use  for  commercial  and 
criminal purposes – including provisions on electronic signature – is under preparation. 

The  Second  Additional  Protocol  to  the  United  Nations  Convention  against  Transnational 
Organized  Crime,  the  UN  Convention  on  the  Rights  of  the  Child  and  its  2000  Additional 

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Protocol  on  the  Sale  of  Children,  Child  Prostitution  and  Child  Pornography,  ratified 
respectively  in  1991  and  2004,  constitute  the  reference  framework  in  the  fight  against 
trafficking in human beings. However, the absence of an express reference in the criminal 
code to the trafficking of human beings hinders prosecution as well as victim identification, 
underlining  the  need  to  develop  robust  legal  mechanisms  to  combat  trafficking  and  raise 
public awareness. Lebanon is a destination country for trafficked women from Moldova and 
other Eastern European countries. Discussions have begun on developing appropriate victim 
support  and  protection  services  in  Lebanon  and  on  their  return  in  cooperation  with  civil 
society and UNODC. Child trafficking is also a growing phenomenon, although an absence of 
official statistics hinders full assessment of the situation.  

Lebanon is a party to all three UN conventions on narcotic drugs and psychotropic substances 
and  cooperates  regionally  in  the  fight  against drug  trafficking  in  line  with  its  international 
agreements. The National Council on Drugs has not yet designed an anti-drugs strategy nor a 
national action plan. Lebanon is not a  major illicit  drug  producing country, though a steady 
increase  in  hashish  cultivation  in  the  Beqaa  region  was  registered.  The  improvement  in 
relations  with  Syria  impacted  significantly  on  curbing  drug  trafficking  across  the  national 
borders. In the area of rehabilitation, comprehensive treatment is only provided by one civil 
society  organization.  Lebanon  cooperated  with  the  Regional  Near  East  Dublin  Group  on  a 
national  narcotics  situation  report  in  December  2008  (see  Sector  Report).  Lebanon 
participated actively in the regional Euromed Police II programme on drugs cooperation. 

Lebanon  continued  to  develop  a  system  against  money  laundering  and  the  financing  of 
terrorism,  incorporating  Financial  Action  Task Force  (FATF)  recommendations  in  line  with 
the 2001 and 2003 Laws. The Special Investigation Commission (SCIC) within the Bank of 
Lebanon, which serves as a Financial Intelligence Unit (FIU), reported increased inter-agency 
cooperation  with  the  police  and  customs.  In  October  2008,  the  Parliament  adopted  a  law 
giving the SCIC the power to lift bank secrecy and freeze bank accounts in corruption-related 
cases.  Improvements  to  the  reporting  system  and  supervision  of  financial  transactions, 
including  cash  transfers,  would  be  required  alongside  provisions  for  the  confiscation  of 
proceeds  of  money  laundering  in  line  with  international  practice.  A  system  of  on-line 
reporting for banks would also require attention. 

Lebanon  is  a  member  of  the  Egmont  Group  and  confirmed  that  it  would  be  evaluated  by 
Middle East & North Africa Financial Action Task Force (MENAFATF) in early 2009. 

In  the  area  of  police  and  judicial  cooperation,  Lebanon  participated  in  the  regional 
programmes  Euromed  Police  II  and  Euromed  Justice  II.  As  a  spin-off  to  its  participation  in 
the Euromed Justice II programme, it envisages the establishment of a Family Mediation and 
Arbitration  Centre,  in  order  to  contribute  to  resolving  international  family  law  disputes. 
Lebanon  is  committed  to  working  on  necessary  reforms  within  the  context  of  the  Hague 
Conference  on  Private  International  Law,  but  declines  to  formally  join  the  Conference.  The 
Higher Council for Women and the Council of the Child participate alongside the Ministry of 
Justice  in  the  dialogue  on  international  child  protection  and  family  law  issues  under  the 
“Malta Process” (also see the Sectoral Report).  

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6. 

TRANSPORT, ENERGY, THE ENVIRONMENT, THE INFORMATION SOCIETY, RESEARCH 
AND DEVELOPMENT 

faced 

Well-developed  plans  to  establish  a  land  and  maritime  transport  policy  suffered  a 
infrastructure 
considerable  delay.  Lebanon 
rehabilitation  and  upgrading  over  the  last  year,  yet  has  managed  to  reconstruct  most  of  its 
critical infrastructure needs, except for a large bridge on the Damascus Highway. The reform 
of road transport, which had started with a view to increase the efficiency of the road haulage 
sector, was halted. A draft law establishing a land transport authority was prepared more than 
three years ago, but the Authority is still not operational. 

important  challenges  as 

regards 

There is renewed interest in public transport and an urgent need to develop an action plan that 
will allow for the development of an integrated public (urban and intercity) transport system. 
However, overlapping jurisdictions present a major obstacle to such planning. The ministry is 
already  working  within  the  guidelines  of  the  draft  law  on  the  national  transport  policy,  by 
implementing parts of it by joint ministerial decrees as a general public license system for all 
operators. 

An autonomous Civil Aviation Authority, replacing the Directorate-General of Civil Aviation 
as a regulator, has still not been established, even though the sector is technically managed to 
high  international  standards.  After  the  signature  of  a  horizontal  agreement,  the  European 
Commission  was  granted  a  mandate  to  negotiate  a  Euro  Mediterranean  aviation  agreement 
with  Lebanon  in  October  2008,  aiming,  as  foreseen  in  the  Action  Plan,  at  aligning  the 
standards  applicable  in  the  field  of  air  transport  and  open-up  the  market  access  for  the 
respective air carriers. 

In order to increase the efficiency of its ports, Lebanon is planning to further improve the port 
management  in  Beirut  and  Tripoli.  A  privately  managed  container  terminal  is  operating 
successfully in the port of Beirut. There is an urgent need to address maritime safety issues in 
Lebanon  and  establish  the  foreseen  autonomous  Maritime  Transport  Authority.  Consistent 
failure  by  the  authorities  to  address  the  lack  of  Port  State  Control  and  flag  state 
implementation has resulted in the Lebanese fleet being classified on the black list of the Paris 
Memorandum of Understanding on Port State Control. 

Lebanon,  an  energy  dependent  country,  continued  to  suffer  from  a  high  energy  import  bill, 
subsidised energy prices and considerable debts to Electricité du Liban (EdL), which in itself 
represented  a  quarter  of  the  budgetary  deficit  in  2008.  This  situation,  as  well  as  the  regular 
power outages, impact negatively on the country’s socio-economic development and require 
swift reforms. Lebanon worked on the corporatisation of EdL, pursued the auditing of EdL’s 
accounts  and  is  reviewing  electricity  tariffs.  It  continued  the  development  of  an  electricity 
generation master plan and facilitated private sector involvement through independent power 
producers. Lebanon took preparatory steps to build, with private involvement, power plants in 
Beddawi and Deir Amman. Lebanon continued to prepare the establishment of the National 
Electricity  Regulatory  Authority.  Lebanon  pursued  the  rehabilitation  and  expansion  of  the 
electricity  networks  and  advanced  work  on  metering  electricity,  which  will  further  improve 
bill collection.  

Limited progress was made in the preparation of an electricity interconnection with Syria. In 
April  2008,  Lebanon  participated  in  an  EU-  Mashraq  Ministerial  meeting  which  promoted 
energy  cooperation  in  the  Mashraq  and  the  completion  of  the  Arab  gas  pipeline.  Lebanon 
participated in the EC supported Euro-Mashraq gas master plan project, which contributes to 
developing  a  Euro-Mashraq  natural  gas  market.  Ministers  of  Lebanon,  Egypt,  Jordan  and 

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Syria agreed to take steps to connect the Arab gas pipeline to the European network. Lebanon 
pursued Euro-Mediterranean energy cooperation through multiple projects.  

The  July  2008  Summit  of  the  Union  for  the  Mediterranean  endorsed  the  development  of  a 
Mediterranean  Solar  Plan.  The  country  took  steps  in  the  area  of  energy  efficiency  and 
renewable energy sources. The construction of a small wind power plant was also prepared. 
Lebanon became partner in the Regional Centre for Renewable Energy and Energy Efficiency 
for Middle East and North African countries. The Cairo-based Centre was inaugurated in June 
2008 and is supported by the European Commission, Denmark and Germany.  

In  the  field  of  climate  change,  Lebanon  continued  to  prepare  a  second  national 
communication,  a  greenhouse  gas  inventory  and  assessment  of  climate  impacts.  However, 
there were no developments as regards the preparation and registration of Clean Development 
Mechanism  (CDM) projects.  Lebanon  has  not  yet  adopted  a  formal  position  regarding  the 
post-2012 climate regime. 

There were no developments as regards the adoption of the national environment action plan. 
The legislative framework continues to require further development, in particular with regard 
to  implementing  legislation  on  environmental  impact  assessments,  access  to  environmental 
information and public participation. No new laws were  adopted in 2008, but legislation on 
strategic  environmental  assessment,  water,  ozone  depleting  substances,  rehabilitation  of 
quarries, protected areas, waste management, air quality and bio-safety is under preparation. 
Work  continued  to  implement  existing  strategies  and  plans,  but  continued  attention  is  still 
required.  

Implementing legislation establishing the mandate of the regional departments of the Ministry 
of Environment was prepared. Further strengthening of administrative capacity is still a major 
challenge at all levels of the country. Coordination between involved authorities also requires 
attention. Reform of the water sector is on-going, but further steps are needed to apply a fully 
integrated  water  resource  management,  including  related  institutional  responsibilities.  Some 
activities took place to integrate environment considerations into other policy sectors such as 
energy and agriculture. Some steps were taken to strengthen the enforcement of environment 
legislation.  However,  monitoring  as  well  as  enforcement  requires  special  attention.  There 
were no significant developments as regards the update of the 2002 state-of-the-environment 
report.  Lebanon  carried  out  some  activities  to  inform  and  involve  the  public,  but  access  to 
information  requires  further  improvement.  In  the  framework  of  environmental  impact 
assessments,  public  consultation  is  still  not  widely  ensured.  A  strategic  environmental 
assessment was carried out related to the Lebanon mountain trail project. 

The  Lebanese  Parliament  ratified  the  amendments  to  the  Barcelona  Convention  for  the 
Protection of the Marine Environment and the Coastal Region of the Mediterranean and the 
Cartagena Protocol on Bio safety to the Convention on Biological Diversity. Lebanon did not 
make  significant  progress  in  ratifying  and  signing  remaining  relevant  Protocols  to  the 
Barcelona  Convention2. Furthermore,  the  implementation  of  already  ratified  agreements 
requires particular attention. Lebanon continued to participate in the Horizon 2020 Initiative, 
the  Mediterranean  Action  Plan  and  the  EU  Water  Initiative,  including  a  national  policy 
dialogue.  Lebanon  also  participated  in  the  December  2008  Euro-Mediterranean  Ministerial 

2

Lebanon has not ratified the amendments to the Barcelona Convention’s Protocols on Land-Based Sources and Dumping. It has 
not signed the new Emergency Protocol, the Specially Protected Areas and Biodiversity Protocol, nor the Integrated Coastal Zone 
Management Protocol. 

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Conference  on  Water,  launching  the  preparation  of  a  regional  water  strategy  for  the 
Mediterranean.  Cooperation  and  information  exchange  took  place  between  the  European 
Commission  and  Lebanon,  including  on  water,  integrated  coastal  zone  management, 
environmental reporting and civil protection. Other topics, such as further action in the field 
of water were identified for possible closer cooperation. 

the 

As  regards  the  Information  Society,  the  Ministry  of  Telecommunications  embarked  on  a 
campaign  against  illegal  international  communications  and  tried  to  recover  taxes  from  TV 
broadcasting  stations.  The  Telecommunications  Regulatory  Authority  (TRA)  adopted 
regulations  on 
identification  of  operators  with  significant  market  power,  on 
interconnection of networks, on type approval and on quality of service. Decisions have been 
issued  on  the  provision  of  services  with  Very  Small  Aperture  Terminals  (VSAT  satellite 
communications),  on  a  pilot  project  for  IP-TV  and  on  the  establishment  of  call  centres;  a 
national frequency table and a new numbering plan have been also published. A liberalisation 
roadmap,  a  statement  on  broadband  policy  and  regulations  on  licensing,  on  numbering,  on 
pricing,  on  consumer  protection  and  on  spectrum  management  have  been  finalised  for 
publication by the TRA in 2009. Furthermore, the TRA issued public consultation documents 
on  a  plan  for  spectrum  reforming  and  packaging,  on  a  regulation  to  facilitate  access  to 
information  and  on  the  improvement  of  FM  broadcasting,  including  a  digital  migration 
strategy.  The  Office  of  the  Minister  of  State  for  Administrative  Reform  implemented  an  e-
government  strategy  that  is  being  further  fine-tuned  by  a  ministerial  committee;  the  e-
government portal (www.informs.gov.lb) has already been set up.  

In view of the global financial crisis, the government postponed plans to privatise the mobile 
communications sector. Outside the reporting period, in January 2009, it concluded two new 
operator  contracts  for  one  year,  renewable  once.  No  progress  has  been  made  on  how  to 
proceed with the broadband licenses. 

Regarding  the  audiovisual  sector,  a  Memorandum  of  Understanding  has  been  signed  with 
two Cable –TV companies for an IP-TV pilot project. The Conseil national de l'audiovisuel 
still has only a consultative role and has not yet an autonomous status enabling it to regulate 
efficiently and independently.  

Research  and  innovation  activities  in  Lebanon  remained  limited  as  regards  their  potential. 
The successful participation of Lebanon in the fist two calls of FP7 was relatively low, and 
effective  actions  should  be  undertaken  to  improve  the  participation  of  Lebanese  research 
institutions  in  the  Research  Framework  Programme,  possibly  through  more  effective 
development of contact points. Through the improvement of its National Contact Point and an 
active participation in the FP7 Inconet MIRA project for example, Lebanon could increase its 
participation in FP7 in topics of regional interest. Five applicants out of 78 (2 of them in the 
ICT sector) have been main-listed. Two contracts have been signed so far. Innovation issues 
will need to receive adequate attention at government level in order for Lebanon to reach its 
full potential.  

7. 

PEOPLE-TO-PEOPLE CONTACTS, EDUCATION AND HEALTH 

Lebanon slowly continued implementing the national strategy on access to quality education, 
prioritising low income households and students with special needs. Ensuring ‘education for 
all’ remains a primary objective under the National Strategy for Education, which, following 
further  review,  is  expected  to  be  submitted  to  the  Council  of  Ministers  in  mid  2009.  In 
January 2008 the Ministry of Education and Higher Education approved the establishment of 

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an  education  reform  secretariat  as  part  of  its  internal  organizational  reform,  while  a  new 
school information system is being deployed.  

In  the  area  of  higher  education,  the  Ministry  of  Education  and  Higher  Education  prepared 
draft  laws  on  the  re-organisation  of  private  higher  education  and  on  the  University  of 
Lebanon,  but  their  adoption  is  not  yet  secured.  National  dialogue  between  educational 
partners continues regarding the establishment of a homogenous educational system under the 
auspices  of  the  Bologna  Promoters  Group.  In  this  respect,  ensuring  the  quality  and 
comparability  of  courses  and  diplomas  with  reference  to  ECTS  (European  Credit  Transfer 
System)  and  the  Bologna  Process,  as  well  as  national  accreditation  of  higher  education 
institutions,  are  key  areas  of  interest.  Concrete  legislative  proposals  however,  have  yet  to 
emerge. 

Lebanon  participated  actively  in  the  Tempus  IV  programme,  benefiting  from  four  projects 
under  the  first  Call  for  Proposals  for  the  academic  year  2008-9.  In  addition,  nine  Lebanese 
students and one scholar received scholarships under Erasmus Mundus for the academic year 
2008/2009. Student and academic mobility was further enhanced through the involvement in 
Erasmus  Mundus  External  Cooperation  Window.  In  addition,  three  Lebanese  students 
received scholarships in European integration studies at masters’ level for students from the 
ENPI region under a special pilot project for the academic year 2008-9. 

In  the  area  of  vocational  training,  no  specific  developments  were  noted.  The  ministerial 
decree  on  a  public-private  partnership  approach  to  vocational  training  still  cannot  be 
effectively applied due to legal restrictions. Policy dialogue focused on preparation of a future 
sector  budget  support  programme  for  general  education.  Significant  challenges  remain  with 
regard  to  governance  of  education,  resource  management  and  adequate  measures  to  tackle 
secondary school drop out and de-skilling of students.  

Lebanon continued its active participation in the Euromed Youth III programme, resulting in 
the approval of seven projects in the period 2007-8. In parallel, Lebanese young people and 
youth organisations could also benefit from the opportunities offered by the Youth in Action 
Programme.  The  Ministry  of  Youth  and  Sports  established  a  Euromed  Youth  Advisory 
Committee  to  improve  dialogue  on  the  future  youth  policy.  Public  support  for  youth 
leadership  development  programmes,  informal  education,  drug  prevention  and  youth 
information activities needs to be increased.  

In the area of culture, Lebanon participated in a regional project under Euromed Heritage III 
on  the  creation  of  a  multi-media  transversal  data  base  to  valorise  shared  Mediterranean 
heritage  alongside  partners  from  Algeria,  Jordan,  Morocco,  Tunisia,  Spain  and  France.  The 
national network of the Anna Lindh Foundation funded some 20 projects enabling an increase 
in  the  number  of  training  activities  offered,  though  significant  scope  remains  for  additional 
development in this area. Under the regional MED-PACT programme, the cities of Beirut and 
El  Mina  alongside  partner  cities  in  Algeria,  Italy  and  France  implemented  the  Archimedes 
project which aimed to better plan urban regeneration in order to promote sustainable tourism 
and the valorisation of under-utilised cultural heritage. 

Lebanon  did  not  proceed  to  the  ratification  of  the  2005  UNESCO  Convention  on  the 
Protection and Promotion of the Diversity of Cultural Expressions. 

The  Ministry  of  Interior  and  Municipalities  improved  communication  channels  with  NGOs, 
but obstacles to the organization and registration of civil society organizations still persist. A 

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new law on NGOs still remains in draft form. As part of implementation of the 2007 law on 
consumer  protection,  the  Ministry  of  Economy  and  Trade  reactivated  the  Consumer 
Protection  Council  in  September  2008,  which  includes  private  sector  and  consumer 
association  representatives.  A 
twinning  project  on  consumer  protection  continues 
implementation. 

Reform of the health sector did not receive sufficient funding. The policy objectives include 
more  access  to  health  services,  particularly  for  the  vulnerable,  increased  efficiency  of  the 
sector  and  more  quality.  Lebanon  continued  the  hospital  accreditation  programme  and 
initiated  the  development  of  a  national  epidemiological  surveillance  programme.  In 
November  2008  Lebanon  participated  in  the  second  Euro-Mediterranean  ministerial  health 
conference, which opened new perspectives for regional health cooperation. Lebanon pursued 
participation in the EU network of competent authorities in health information and knowledge 
and  continued  participation  in  the  “EpiSouth”  network  for  EU,  Mediterranean  and  Balkan 
countries on communicable diseases. 

8. 

FINANCIAL COOPERATION – 2008 KEY FACTS AND FIGURES 

The  ENPI  financial  envelope  for  Lebanon  under  the  National  Indicative  Programme  2007-
2010 is EUR 187 million. As Lebanon’s socio-economic development was much affected by 
the  2006  hostilities,  the  European  Community  assistance  strategy  is  twofold.  Part  of  the 
support  provided  is  geared  towards  responding  to  the  reconstruction  needs  arising  from  the 
military conflicts and aims at reinvigorating the economy, while the rest focuses on the key 
policy objectives outlined in the ENP Action Plan.  

The  implementation  of  the  measures  covered  by  the  2007  Annual  Action  Programme  is 
underway.  The  bulk  of  the  EUR  50  million  assistance  package  was  devoted  to  address  the 
recovery  and  reinvigoration  of  the  economy  after  the  2006  military  conflict  between 
Hezbollah and Israel. A EUR 18 million package has been devoted to reconstruction mainly 
in the form of infrastructure projects promoting local development strategies. It allowed also 
the  work  on  the  reconstruction  of  the  Vessel  Traffic  System  destroyed  during  the  2006 
military conflict to proceed. In addition to that, EUR 4 million has been devoted to continue 
demining operations in the South launched immediately after the cessation of hostilities. The 
European  Commission  also  made  EUR  3  million  available  to  UNRWA  over  3  years  to 
finance  scholarships  for  Palestinian  refugees  in  Lebanon  (up  to  130  students).  A  EUR  10 
million reform oriented package allowed the Commission to assist the government agenda in 
social and economic reforms. 

The implementation of the bilateral assistance is, so far, advancing without delays. In 2008, 
the Commission continued to support the national reform efforts in Lebanon and programmed 
assistance  for  a  total  amount  of  EUR  50  million,  under  the  ENPI.  The  Annual  Action 
programme focussed on political and economic reforms with a project in the field of justice 
(EUR  10  million).  An  additional  envelope  of  EUR  32  million  was  allocated  to  assist  local 
stakeholders  in  their  reconstruction  and  recovery  efforts  (EUR  18  million)  and  to  support 
SMEs (EUR 14 million). Finally, EUR 8 million was provided to assist in the reconstruction 
of the Nahr el Bared Palestinian refugee camp.  

The  European  Union  remains  an  important  donor  in  the  reconstruction  effort  of  the 
Palestinian  refugee  camp  in  Nahr  el-Bared  destroyed  during  the  military  operation  of  the 
Lebanese  Armed  Forces  against  the  terrorist  organisation  Fateh  el-Islam  in  2007.  The  EU 

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provided  over  EUR 50 million  to  support  the  reconstruction  plan  and  cover  the  basic 
humanitarian needs of the displaced population (EUR 30 million from the community budget 
and an additional EUR 20 million from Member States). The lack of strategy for the adjacent 
areas, notably on the issue of property, hampers the reconstruction process which is already 
facing  difficulties  due  to  a  lack  of  appropriate  funding.  The  European  Commission  also 
funded EUR 9.4 million of humanitarian aid for Palestinian refugees in Lebanon in the health, 
water and sanitation, shelter and livelihood supporting activities sectors, through the DG for 
Humanitarian Aid  

The project based approach remained the dominant modality used for delivering assistance in 
Lebanon. Twinning is still underutilised and the administration has so far not been ready to 
engage  in  the  design  and  implementation  of  budgetary  or  sector  support  operations. 
Significant  work  was  done  to  introduce  public  finance  management  standards,  although 
improvements  are  still  needed.  Moreover,  the  absence  of  sector  strategies  approved  at 
government level has made it difficult to implement budgetary support type of assistance. 

Lebanon  also  benefits  from  cooperation  activities  financed  under  the  ENPI  multi-country 
(including the Neighbourhood Investment Facility) and regional programmes, and is eligible 
under  the  ENPI  Cross  Border  Cooperation  (CBC)  component.  Lebanon  participates  in  the 
CBC Mediterranean Sea basin programme (EUR 173.607 million for the whole programme in 
the  period  2007-13).  Through  this  programme  the  populations  of  the  maritime  regions 
bordering the Mediterranean Sea will receive funding for joint co-operation projects aimed at 
fostering sustainable development and enhancing human contacts.  

Other  Community  Instruments  supplement  the  ENPI  assistance  package.  Through  the 
Instrument for Stability, EUR 4 million were made available to help political stabilization and 
national reconciliation, via technical assistance to the Ministry of Interior and Municipalities 
and the provision of electoral equipment in anticipation of the elections of June 2009.  

The European Investment Bank has signed lending operations in 2008 for an amount of EUR 
52 million for the ‘Private Sector Facilities II Global Loan’, aimed at the partial financing of 
small and medium-sized investment projects, undertaken by private enterprises. 

The  European  Commission  Delegation  in  Beirut  chairs  the  EU  Development  Counsellors’ 
working group that discusses issues of complementarity and division of labour. Moreover, the 
European  Commission  ensured  coordination  among  international  donors,  as  well  as  the 
building  of  strong  relations  with  International  Financial  Institutions  active  in  Lebanon. 
Thematic donor groups were initiated to coordinate action in the fields of local development, 
water  and  energy,  private  sector  development,  justice,  and  education.  The  Government  has 
not yet developed the capacity to ensure donor coordination. 

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