Position (EU) No 4/2011 of the Council at first reading with a view to the adoption of a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation Adopted by the Council on 10 December 2010
Date: 2010-12-10
Institutions: Council of the European Union
Subjects: EU aid, aid system, cooperation policy, development aid, financing








CE2011007EN.01001701.xml










12.1.2011   


EN


Official Journal of the European Union


CE 7/17





POSITION (EU) No 4/2011 OF THE COUNCIL AT FIRST READING
with a view to the adoption of a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation
Adopted by the Council on 10 December 2010
2011/C 7 E/04
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 209(1) thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Acting in accordance with the ordinary legislative procedure (1),
Whereas:






(1)


The Union’s development policy aims to reduce and ultimately eradicate poverty.










(2)


The Union, as a member of the World Trade Organisation (WTO), is committed to mainstreaming trade in development strategies and to promoting international trade in order to advance development and reduce — and, in the long term, eradicate — poverty worldwide.










(3)


The Union supports the African, Caribbean and Pacific (ACP) Group of States on their path to poverty reduction and to sustainable economic and social development, and recognises the importance of their commodity sectors.










(4)


The Union is committed to supporting the smooth and gradual integration of developing countries into the world economy with a view to sustainable development. The main ACP banana-exporting countries may face challenges in the context of changing trade arrangements, notably liberalisation of the Most Favoured Nation (MFN) tariff in the framework of the WTO and the bilateral and regional agreements concluded, or in the process of being concluded, between the Union and Latin American countries. Therefore, an ACP Banana Accompanying Measures programme (the programme) should be added to Regulation (EC) No 1905/2006 of the European Parliament and of the Council (2).










(5)


The financial assistance measures to be adopted under the programme should aim at improving the living standards and living conditions of people in banana-growing areas and in banana value chains, specifically small farmers and small entities, as well as ensuring compliance with labour and occupational health and safety standards, and environmental standards, notably those regarding the use of and exposure to pesticides. The measures should also support the adaptation and including, when relevant, the reorganisation, of areas dependent upon banana exports through sector-specific budget support or project-specific interventions. The measures should aim to provide for social resilience policies, economic diversification or investment to improve competitiveness, where this is viable, taking into account the results of and experiences gained through the Special System of Assistance to traditional ACP suppliers of bananas established in accordance with Council Regulation (EC) No 2686/94 (3) and the Special Framework of Assistance (SFA) for traditional ACP suppliers of bananas established in accordance with Council Regulation (EC) No 856/1999 (4) and Commission Regulation (EC) No 1609/1999 (5). The Union acknowledges the importance of promoting a more equitable distribution of banana revenues.










(6)


The programme should accompany the adaptation process in ACP countries which have exported significant volumes of bananas to the Union in recent years and which will be affected by liberalisation in the framework of the Geneva Agreement on Trade in Bananas (6) and by the bilateral and regional agreements concluded, or in the process of being concluded, between the Union and Latin American countries. The programme builds on the SFA for traditional ACP suppliers of bananas. It is in conformity with the Union’s international obligations in the framework of the WTO, focuses on restructuring and boosting competitiveness, and is consequently temporary in nature, with a duration of 4 years (2010-2013).










(7)


The conclusions of the Commission Communication of 17 March 2010 entitled ‘Biennial Report on the Special Framework of Assistance for Traditional ACP Suppliers of Bananas’ indicate that past assistance programmes made substantial contributions to achieving improved capacity for successful economic diversification, although the full impact cannot be quantified, and that the sustainability of ACP banana exports remains fragile.










(8)


The Commission has carried out an evaluation of the SFA programme and has not carried out an impact assessment of the banana accompanying measures.










(9)


The Commission should ensure proper coordination of this programme with the regional and national indicative programmes operating in the beneficiary countries, in particular as regards the achievement of economic, agricultural, social and environmental objectives.










(10)


Almost 2 % of the world’s trade in bananas is endorsed by fair trade producers’ organisations. The minimum fair trade prices are set on the basis of a calculation of the ‘sustainable production costs’, established following consultations with stakeholders, with a view to internalising the costs of meeting decent social and environmental standards and generating a reasonable profit, enabling producers to safeguard their livelihoods in the long term.










(11)


To prevent the exploitation of local workers, actors in the production chain in the banana industry should agree to ensure that the revenue generated by the industry is allocated fairly.










(12)


Regulation (EC) No 1905/2006 should therefore be amended accordingly,




HAVE ADOPTED THIS REGULATION:
Article 1
Regulation (EC) No 1905/2006 is hereby amended as follows:






1.


Article 4 is replaced by the following:
‘Article 4
Implementation of Union assistance
Consistent with the overall purpose and scope, objectives and general principles of this Regulation, Union assistance shall be implemented through the geographic and thematic programmes set out in Articles 5 to 16 and the programmes set out in Articles 17 and 17a.’;










2.


the following Article is inserted:
‘Article 17a
Main ACP banana-supplying countries
1.   ACP banana-supplying countries listed in Annex IIIa shall benefit from banana accompanying measures. Union assistance shall aim at supporting their adjustment process following liberalisation of the Union market for bananas in the framework of the WTO. Union assistance shall in particular be used to combat poverty by improving the living standards and conditions of farmers and persons concerned, where relevant small entities, including by means of compliance with labour and safety standards, as well as with environmental standards, including the use of and exposure to pesticides. Union assistance shall take into account the countries policies and adaptation strategies, as well as their regional environment (in terms of proximity to outermost regions of the Union and overseas countries and territories) and shall pay specific attention to the following areas of cooperation:






(a)


enhancing the competitiveness of the banana export sector, where this is sustainable, taking into account the situation of different stakeholders in the chain;










(b)


promoting the economic diversification of banana-dependent areas, where such a strategy is viable;










(c)


addressing broader impacts generated by the adaptation process, possibly related but not restricted to employment and social services, land use and environmental restoration, and macroeconomic stability.




2.   Within the amount referred to in Annex IV, the Commission shall fix the maximum amount available to each eligible ACP banana-supplying country referred to in paragraph 1 of this Article on the basis of the following objective, weighted indicators:






(a)


trade in bananas with the Union;










(b)


the importance of banana exports to the economy in the ACP country concerned, along with the country’s level of development.




The measurement of the allocation criteria shall be based on representative data preceding 2010 and covering a period not longer than 5 years, and on a Commission study assessing the impact on the ACP countries of the agreement reached within the WTO and the bilateral and regional agreements concluded, or in the process of being concluded, between the Union and Latin American countries, which are the leading exporters of bananas.
3.   The Commission shall adopt multiannual support strategies by analogy to Article 19, and in accordance with Article 21. It shall ensure that such strategies complement the geographic strategy papers of the countries concerned, and the temporary nature of these banana accompanying measures.
The multiannual support strategies for banana accompanying measures shall include:






(a)


an updated environmental profile paying due attention to the country’s banana sector, inter alia focusing on pesticides;










(b)


information on the achievements of past banana support programmes;










(c)


indicators to assess progress in relation to disbursement conditions, when budget support will be chosen as the form of financing;










(d)


the expected results of the assistance;










(e)


a time schedule of support activities and of expected disbursements for each recipient country;










(f)


the ways in which progress will be achieved and monitored in meeting internationally agreed ILO core labour standards and appropriate occupational safety and health conventions as well as relevant internationally agreed core environmental standards.




By 18 months before the expiry date, the banana accompanying measures programme and the progress made by the countries concerned shall be the subject of an assessment, which shall include recommendations on any measures to be taken and the nature thereof.’;










3.


Article 21 is replaced by the following:
‘Article 21
Adoption of strategy papers and multiannual indicative programmes
Strategy papers and multiannual indicative programmes referred to in Articles 19 and 20, and any reviews thereof referred to in Article 19(2) and Article 20(1), as well as accompanying measures referred to in Articles 17 and 17a respectively, shall be adopted by the Commission in accordance with Article 35(2).’;










4.


Article 25(2) is replaced by the following:
‘2.   Union assistance shall not in principle be used for paying taxes, duties or charges in beneficiary countries.’;










5.


Article 29(1) is replaced by the following:
‘1.   Budget commitments shall be made on the basis of decisions taken by the Commission in accordance with Articles 17a(3), 22(1), 23(1) and 26(1).’;










6.


in Article 31(1), the third subparagraph is replaced by the following:
‘Participation in the award of procurement or grant contracts financed under a thematic programme as defined in Articles 11 to 16, and the programmes set out in Articles 17 and 17a, shall be open to all natural persons who are nationals of, or legal persons who are established in, a developing country, as specified by the OECD/DAC and in Annex II, in addition to natural or legal persons eligible by virtue of the thematic programme or the programmes set out in Articles 17 and 17a. The Commission shall publish and update Annex II in accordance with regular reviews of the list of aid recipients of the OECD/DAC, and inform the Council thereof.’;










7.


in Article 38, paragraphs 1 and 2 are replaced by the following:
‘1.   The financial reference amount for the implementation of this Regulation over the period 2007-2013 is EUR 17 087 million.
2.   The indicative amounts allocated to each programme referred to in Articles 5 to 10, 11 to 16 and 17 to 17a are laid down in Annex IV. These amounts are established for the period 2007-2013.’;










8.


Annex IIIa, as contained in Annex I to this Regulation, is inserted;










9.


Annex IV is replaced by the contents of Annex II to this Regulation.




Article 2
This Regulation shall enter into force on the day following its publication in the Official Journal of the European Union.

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


For the European Parliament


The President

…



For the Council


The President

…




(1)  Position of the European Parliament of 21 October 2010 (not yet published in the Official Journal) and position of the Council at first reading of 10 December 2010. Position of the European Parliament of … (not yet published in the Official Journal).

(2)  OJ L 378, 27.12.2006, p. 41.

(3)  OJ L 286, 5.11.1994, p. 1.

(4)  OJ L 108, 27.4.1999, p. 2.

(5)  OJ L 190, 23.7.1999, p. 14.

(6)  OJ L 141, 9.6.2010, p. 3.


ANNEX I


‘ANNEX IIIa

Main ACP banana-supplying countries







1.


Belize










2.


Cameroon










3.


Côte d’Ivoire










4.


Dominica










5.


Dominican Republic










6.


Ghana










7.


Jamaica










8.


Saint Lucia










9.


Saint Vincent and the Grenadines










10.


Suriname’.









ANNEX II


‘ANNEX IV

Indicative financial allocations for the period 2007-2013 (in EUR million)








Total


17 087




Geographic programmes:


10 057




Latin America


2 690




Asia


5 187




Central Asia


719




Middle East


481




South Africa


980




Thematic programmes:


5 596




Investing in people


1 060




Environment and sustainable management of natural resources


804




Non-State actors and local authorities in development


1 639




Food security


1 709




Migration and asylum


384




ACP Sugar Protocol countries


1 244




Main ACP banana-supplying countries


190’









STATEMENT OF THE COUNCIL'S REASONS
I.   INTRODUCTION

On 17 March 2010, the Commission adopted its proposal for a Regulation amending Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation.
The European Parliament adopted its first reading opinion on 21 October 2010.
The Council adopted its position at first reading on 10 December 2010.
II.   OBJECTIVE

This ACP Banana Accompanying Measures (BAM) programme is proposed as an amendment to Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation (DCI). The aim of the BAM programme is to assist the restructuring of the banana sectors in the 10 main ACP banana-exporting countries.
The EU's Common Market Organisation (CMO) for bananas has been challenged repeatedly in the World Trade Organisation (WTO). Consequently, the EU has negotiated in the WTO framework a trade agreement on bananas which supports the completion of the Doha Development Agenda's (DDA) agricultural modalities and the full Doha Round.
This will lead to a reduction of the ACPs’ preference margin that will require adjustments. The proposed BAM programme for the main ACP banana-supplying countries aims to support the adjustment of areas dependent upon banana exports through budget support or specific interventions. The measures will support the adaptation to broader impacts (e.g. social and environmental), economic diversification policies, or investments in improving competitiveness, where this is a viable strategy.
The measures are proposed as a temporary programme with a maximum duration of 4 years (2010-2013). They would have a budget of EUR 190 million and would be introduced through an amendment to the DCI.
III.   ANALYSIS OF THE COUNCIL'S POSITION AT FIRST READING

Following early and constructive discussions between the three institutions, the Council accepted 15 amendments adopted by the European Parliament at first reading. The Council considers that these amendments improve the initial proposal either by fleshing it out, mainly its preamble, or by clarifying some substantial aspects of the BAM programme.
In particular, the EU’s assistance now has an explicit focus on poverty eradication and the improvement of living and working conditions of small farmers and other persons concerned.
Furthermore, the Regulation now refers to the regional environment of eligible countries under the BAM programme, specifically the proximity to outermost regions of the EU and OCTs.
The Council also welcomed EP amendments regarding environmental protection requirements as well as social requirements based on ILO standards to be included in country support strategies.
Finally it is worth noting that the text now provides for an assessment of the BAM programme 18 months before its end, when appropriate recommendations can be made.
The Council has not been able, however, to accept those amendments adopted by the European Parliament which introduce the application of the delegated acts procedure (Article 290 TFEU) for the adoption of multiannual cooperation programmes and strategy papers. The Council believes that the multiannual cooperation programmes, not being legally binding acts, do not constitute acts of general application, supplementing or amending the basic act. They constitute implementing measures within the meaning of Article 291 TFEU.
IV.   CONCLUSION

With a view to reaching an early agreement on the amended Regulation, the Council has engaged in substantial negotiations with the European Parliament, facilitated by the European Commission. The negotiations have led to a large degree of consensus on the substantial elements of text which relate to the BAM programme as such.
While the proposal of the Commission did not present substantial difficulties to the Council, the Council made a special effort to meet a number of concerns of the European Parliament related to the application of the amended Regulation.
The Council considers that its position at first reading is a balanced compromise and calls on the European Parliament to go along with this text to allow for the entry into force of the Regulation in 2010. This would permit that the funds already inscribed in the 2010 budget are not lost. The Council has expressed serious concern that failure to reach agreement before the end of 2010 might jeopardise the long awaited trade agreement on bananas in the WTO.