Financing instrument for development cooperation European Parliament resolution of 8 June 2011 on Regulation (EC) 1905/2006 establishing a financing instrument for development cooperation: lessons learned and perspectives for the future (2009/2149(INI))
Date: 2011-06-08
Institutions: Committee on Development, European Parliament
Subjects: developing countries, development aid, financing, migration, poverty








CE2012380EN.01005101.xml










11.12.2012   


EN


Official Journal of the European Union


CE 380/51





Wednesday 8 June 2011Financing instrument for development cooperation
P7_TA(2011)0261
European Parliament resolution of 8 June 2011 on Regulation (EC) 1905/2006 establishing a financing instrument for development cooperation: lessons learned and perspectives for the future (2009/2149(INI))
2012/C 380 E/08

The European Parliament,






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having regard to Articles 208 to 211, and 290 and 291 of the Treaty on the Functioning of the European Union (TFEU),










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having regard to Regulation (EC) No 1905/2006 of the European Parliament and of the Council of 18 December 2006 establishing a financing instrument for development cooperation (1) (Development Cooperation Instrument – DCI),










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having regard to the Millennium Declaration of 8 September 2000, setting out the Millennium Development Goals (MDGs) as criteria established collectively by the international community for the elimination of poverty,










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having regard to the joint statement by the Council and the representatives of the governments of the Member States meeting within the Council, the European Parliament and the Commission on European Union Development Policy: ‘The European Consensus’ signed on 20 December 2005 (2),










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having regard to the joint Declaration on Democratic Scrutiny and Coherence of External Actions and the Commission Declaration on Democratic Scrutiny and Coherence of External Actions attached to the Interinstitutional Agreement on budgetary discipline and sound financial management (3),










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having regard to the declarations by the Commission entered in the minutes of the Council formally adopting the common position of the Council on the adoption of DCI (4), and in particular the ‘Commission Declaration concerning Article 5 DCI’,










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having regard to letter D (2007) 303749 of 5 March 2007 from the then Chair of the Committee on Development, Josep Borrell Fontelles, to then Commissioners Ferrero-Waldner and Michel (5),










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having regard to letter A (2007) 5238 of 26 March 2007 from then Commissioner Ferrero-Waldner to the then Chair of the Committee on Development, Josep Borrell Fontelles (6),










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having regard to the ‘Reporting Directives for the Creditor Reporting System’ of the Development Assistance Committee of the Organisation for Economic Cooperation and Development (OECD/DAC) (7),










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having regard to the Judgment of the Court of Justice of 23 October 2007 in Case C-403/05 (European Parliament v Commission of the European Communities) Action for annulment of Commission decision approving a project relating to border security in the Philippines (Decision adopted on the basis of Regulation (EEC) No 443/92),










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having regard to Regulation (EC) No 1337/2008 of the European Parliament and of the Council of 16 December 2008 establishing a facility for rapid response to soaring food prices in developing countries (8),










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having regard to the Presidency Conclusions of the European Council of 29-30 October 2009 (Doc. 15265/2009),










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having regard to the Council Decision of 26 July 2010 establishing the organisation and functioning of the European External Action Service (EEAS) (9),










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having regard to the Communication from the Commission of 19 October 2010 on the ‘EU Budget Review’ (COM(2010)0700),










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having regard to the Green Paper from the Commission of 19 October 2010 on ‘The future of EU budget support to third countries’ (COM(2010)0586),










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having regard to the Green Paper from the Commission of 10 November 2010 on ‘EU development policy in support of inclusive growth and sustainable development: Increasing the impact of EU development policy’ (COM(2010)0629),










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having regard to its resolution of 15 February 2007 on the draft Commission decisions establishing Country Strategy Papers and Indicative Programmes for Malaysia, Brazil and Pakistan (10),










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having regard to its resolution of 7 June 2007 on the draft Commission decision establishing Regional Strategy Papers and Regional Indicative Programmes for Mercosur and Latin America (11),










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having regard to its resolution of 21 June 2007 on the draft Commission decision establishing a Regional Strategy Document 2007-2013 and a Multiannual Indicative Programme for Asia (12),










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having regard to its resolution of 12 July 2007 on the democratic scrutiny of the implementation of the financing instrument for development cooperation (DCI) (13),










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having regard to its resolution of 25 October 2007 on the draft Commission decision establishing a Special Measure 2007 for Iraq (14),










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having regard to its resolution of 9 July 2008 on the draft Commission decisions establishing Annual Action Programmes for Brazil for 2008 and for Argentina for 2008 (15),










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having regard to its resolution of 15 March 2007 on local authorities and development cooperation (16),










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having regard to the Communication from the Commission on ‘Local authorities: actors for development’ (COM(2008)0626),










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having regard to the Structured Dialogue launched in 2010 by the Commission with the aim to involve civil society organisations (CSOs) and local authorities (LAs) in EC development cooperation,










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having regard to its resolution of 6 May 2009 on the draft Commission decision establishing the 2009 Annual Action Programme for Non-State Actors and Local Authorities in Development (Part II: Targeted Projects) (17),










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having regard to its position of 3 February 2011 on the Council position 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 (18),










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having regard to its position of 3 February 2011 on the Council position at first reading with a view to the adoption of a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation (19),










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having regard to its position of 3 February 2011 on the Council position at first reading with a view to the adoption of a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1934/2006 establishing a financing instrument for cooperation with industrialised and other high-income countries and territories (20),










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having regard to Rule 48 of its Rules of Procedure,










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having regard to the report of the Committee on Development (A7-0187/2011),










A.


whereas, according to Article 2(1) of the DCI, the overarching objective of cooperation under that instrument is ‘the eradication of poverty in partner countries’, including ‘pursuit of the Millennium Development Goals’ (MDGs),










B.


whereas, according to Article 2(4) of the DCI, all the measures under geographic programmes and 90 % of the expenditure foreseen under thematic programmes must fulfil the criteria for Official Development Assistance (ODA) established by the OECD/DAC,










C.


whereas according to Commission calculations, only 0,2 % of the commitments financed under the DCI thematic programmes between 2007 and 2009 do not fulfil the ODA criteria,










D.


whereas, in accordance with Council Decision 1999/468/EC (the ‘Comitology decision’) (21), Parliament launched in 2007 a process of democratic scrutiny of the implementation of Regulation (EC) No 1905/2006, including all Country Strategy Papers (CSPs), Regional Strategy Papers (RSPs), Thematic Strategy Papers (TSPs) and Multiannual Indicative Programmes, and most of the Annual Action Programmes (AAPs),










E.


whereas, in accordance with the joint Declaration on Democratic Scrutiny and Coherence of External Actions and the Commission Declaration on Democratic Scrutiny and Coherence of External Actions attached to the Interinstitutional Agreement on budgetary discipline and sound financial management, the Commission committed itself ‘to take due account of the position of the European Parliament when implementing the strategies’,










F.


whereas the principles of ownership, participation and good governance call for a multi-stakeholder approach in which the various development partners, i.e. local authorities or non-state actors, act in a complementary and coherent manner; and whereas it is important, however, to make a clear distinction between the specific role of local authorities and that of non-state actors, in terms of their spheres of competence, legitimacy and democratic control, experience in the management of local affairs and involvement in the implementation of public policies,










G.


whereas EU funding for international cooperation with Africa comes from four geographic instruments: the EDF for African ACP countries, the TDCA for South Africa, the ENPI for five North African states, and the DCI for the thematic programmes,










H.


whereas the Commission undertook to endeavour to ensure that 20 % of its allocated assistance under country programmes covered by the DCI would be dedicated, by 2009, to basic and secondary education and basic health, through project, programme or budget support linked to these sectors, taking an average across all geographic areas,










I.


whereas the EU has committed itself to the collective target of spending 0,7 % of its gross national income (GNI) on ODA by 2015,










J.


whereas the Earth Summit 2012 aims to secure renewed political commitment to sustainable development, to assess progress towards internationally agreed goals on sustainable development and to address new and emerging challenges,










K.


whereas Article 290 of the TFEU states that a legislative act may delegate to the Commission the power to adopt non-legislative acts of general application to supplement or amend certain non-essential elements of the legislative act,






Lessons learned








1.


Welcomes the Commission’s willingness to honour its commitment to enter into a regular dialogue with Parliament on the implementation of the DCI; acknowledges the efforts made to keep Parliament’s DCI working groups informed about how its comments on strategy papers have been taken into account in drawing up AAPs;










2.


Notes that, in particular during the mid-term review, the dialogue between the Commission and Parliament as part of the democratic scrutiny exercise has helped to avoid the adoption of strategy papers containing ultra vires provisions and to bring strategy papers into line with the requirements of the DCI regulation and in particular the ODA eligibility principles;










3.


Finds it regrettable that several of Parliament’s concerns raised during the democratic scrutiny process, in particular regarding a lack of focus on poverty and the MDGs, have not been sufficiently taken into account by the Commission;










4.


Finds it regrettable that, while the European Consensus on Development (2005) and the DCI emphasise the importance of ownership, the involvement of national parliaments in drawing up Country Strategy Papers has, in practice, been poor; finds it regrettable that the Commission has not adequately implemented the provisions of Articles 19, 20 and 33 of Regulation (EC) No 1905/2006 on consultation with non-state actors and local authorities;










5.


Notes that a ‘pro-growth’ strategy should not be confused with a long-term development strategy that entails the financing of long-term objectives such as health, education, access to energy in rural areas, support for small farmers, etc.;










6.


Finds it regrettable that, in response to its resolutions highlighting non-observance of the requirement laid down in Article 2(4) of the regulation to fulfil the ODA eligibility criteria, the Commission amended or withdrew only three of 11 draft implementing measures concerned;










7.


Finds it regrettable that the committee set up under Article 35 of the DCI did not react to Parliament’s resolutions signalling that the Commission had exceeded its implementing powers; notes with concern that the substantive scrutiny work carried out by Parliament did not receive any echo from the representatives of the Member States in the DCI Committee, and urges the Member States to assume their responsibilities and to ensure, in close collaboration with Parliament, that the measures proposed by the Commission comply fully with the DCI prescriptions;










8.


Requests the Commission to indicate, in order of priority and with their respective weight, the criteria it has used for the allocation of funds between the DCI countries and regions and to the various sectors of activity within each geographic and thematic programme;










9.


Considers that many country and regional strategy papers do not allocate sufficient resources to the DCI’s overarching goal of poverty eradication in the context of sustainable development, and that many documents do not indicate clearly how far the proposed actions will contribute to the MDGs targets;










10.


Draws particular attention to the ODA eligibility requirement for the geographic programmes under the DCI and urges the Commission and the EEAS to ensure full compliance with this legal obligation in every case;










11.


Points out that policy coherence for development, development ‘ownership’ and the non-fragmentation of aid are essential for ensuring aid effectiveness;






Perspectives for the future: principles








12.


Stresses that the EU continues to need a specific financing instrument for development cooperation, which targets exclusively developing countries and explicitly pursues the objectives defined in Article 208 TFEU; insists that the annual figures for ODA in the next Multiannual Financial Framework (MFF) period should increase in real terms to reach the collective target of spending 0,7 % of GNI on ODA by 2015;










13.


Emphasises that full compliance with ODA criteria, and in particular with the OECD/DAC requirement that ‘each transaction is administered with the promotion of the economic development and welfare of developing countries as its main objective’ (22), must remain a condition for all measures to be funded as part of geographic programmes under the new instrument; calls for a more stringent ODA quota for thematic programmes than under the current DCI, especially for programmes on ‘migration and asylum’, in respect of which the Commission did not demonstrate clearly how activities funded in the context of border controls are eligible as ODA according to the OECD/DAC criteria;










14.


Stresses that achievement of the MDGs must remain the prime objective of the instrument for the period until 2015; urges the Commission to ensure that EU aid continues to be consistent with the internationally agreed objectives and targets for development which will be adopted by the United Nations and other competent international organisations for the post-2015 period;










15.


Acknowledges the need for non-ODA cooperation with many developing countries for the provision of global public goods; believes that this kind of cooperation should be regulated and that funds should be channelled via one or more separate instruments, so as to ensure transparency and to protect the distinctive nature of development cooperation as an autonomous policy domain in the area of external relations; insists, in line with the commitment made at the European Council of 29-30 October 2009, that financing for climate change should not undermine or jeopardise the fight against poverty and continued progress towards the MDGs, and that the scarce ODA funds available for poverty reduction should not be diverted for non-development purposes in developing countries; stresses that the OECD definition of ODA should not be altered and calls on the Commission to ensure that no development projects financed by the EU conflict with global efforts to mitigate climate change and that all such projects are climate proof, particularly large infrastructure projects or projects in small islands which will be the first to suffer the consequences of climate change;










16.


Expresses its concern, at a time of serious public budget constraints, about the strong focus placed on private sector investment as a means to leverage more development finance resources; points out that development cooperation is the only external action policy (besides humanitarian aid) which has not been designed to serve EU interests but rather to defend the interests of the most marginalised and vulnerable populations on this planet; therefore, urges the Commission to ensure that any public finance used to support private sector investment in the South is not diverted from already under-funded sectors (as in the case of the programmes for non-state actors and local authorities for instance), and that such support will effectively enable the development of the domestic private sector and small and medium enterprises in low-income countries;










17.


Agrees that a differentiated approach to the diverse group of developing countries is needed, and that traditional financial aid may become less relevant for emerging countries; considers that aid for emerging countries, while promoting sustainable economic growth, should still focus on reinforcing the partner country’s fiscal policy and promoting mobilisation of domestic revenue which should lead to the reduction of poverty and of aid dependency;










18.


Urges the Commission to provide enhanced support for assisting developing and emerging countries in tax reforms, with the aim of supporting effective, efficient, fair and sustainable tax systems; calls on the Commission to effectively integrate the principles of good governance in tax matters into the programming, implementation and monitoring of country and regional strategy papers, while taking the necessary measures to enforce country-by-country reporting by transnational companies;










19.


Stresses that the future development cooperation instrument should continue to cover all developing countries of the geographic regions to which it applies, according to the OECD/DAC list of developing countries;










20.


Calls for closer coordination between the Commission and Member States so as to achieve the Treaty prescription of Article 210 TFEU, and supports the development of joint European strategy papers; believes that all EU programming documents for each country and region should include detailed and up-to-date donor matrices, as well as a special chapter on EU aid effectiveness, specifying actions taken to increase donor coordination, harmonisation and complementarity and to improve the division of labour among donors and particularly among EU Member States;










21.


Reiterates its call for the European Development Fund (EDF) to be brought into the EU budget, which would simplify procedures and increase the effectiveness and efficiency of EC aid; insists that this should not lead to any reduction in the global amounts of funding at EU level for the DCI and for the EDF, nor in the total amount of funding made available at EU level for ODA;










22.


Believes that support for vulnerable groups (women, people with disabilities, young and unemployed people, indigenous people), as well as for gender mainstreaming and for addressing other ‘cross-cutting’ issues, must be enhanced; insists that the DCI successor instrument requires clear benchmarks in programming documents to ensure that the impact of EU intervention in these areas can be measured;










23.


Stresses that the involvement of local authorities in development policies is essential for achieving the MDGs and ensuring good governance; points out, in particular, that local authorities have a critical role to play in areas such as education, combating hunger, health, water, sanitation, social cohesion and local economic development, etc.; deems it essential, therefore, to upgrade their role in the next financial instrument, in line with the principle of development ownership;










24.


Underlines the need for a regular and structured dialogue between the Commission, the EEAS, non-state actors (NSAs) and local authorities (LAs) on the programming, implementation and evaluation of strategy papers; emphasises therefore the need to take the conclusions of the Structured Dialogue into account in future financial instruments;










25.


Stresses the need for flexibility provisions which allow the EU to respond to changes in terms of needs and priorities; suggests an examination of the EDF model of limited country envelopes of non-programmed aid as a possible model for the future development cooperation instrument; stresses, however, that funds used in a more flexible manner must pursue genuine development objectives;










26.


Considers that the new development cooperation instrument should provide a basis for targeted and more flexible aid to situations of fragility; believes that the new financial architecture should help to ensure proper linkage of relief, rehabilitation and development (LRRD) through flexibility and complementarity of the funding mechanisms;






Perspectives for the future: geographic and thematic programmes








27.


Calls for a benchmark of 20 % of spending under geographic programmes to be allocated to basic social services as defined by the United Nations in the MDGs (indicator 8.2 for goal 8: ‘Develop a global partnership for development’);










28.


Insists on strict eligibility criteria for budget support; insists that the Commission must refrain from using budget support in countries where transparency in public spending cannot be assured, that budget support must always be accompanied by actions to develop the receiving country’s parliamentary control and audit capacities and to increase transparency and public access to information, and that civil society should be involved in monitoring budget support;










29.


Recognises the important roles that civil society plays in development, such as acting as a watchdog in relation to government to ensure accountability, and calls for adequate funding to be directed towards civil society in developing countries;










30.


Repeats its call for the Commission to produce a comprehensive financial analysis covering general budget support, support by sector, support by project and support of any other kind granted to local government; stresses that having this global picture would make support granted to local government more consistent and improve governance in partner countries;










31.


Notes that all thematic programmes under the DCI have proven their relevance, and emphasises that it is imperative to maintain both thematic and geographic programmes, but calls for some refocusing in the light of new challenges, such as the global financial and economic crisis, the global food crisis, climate change and special needs of fragile states and states in transition;










32.


Points out that migration is an area in which there is a clear need to prioritise policy coherence for development over short-term EU migration considerations, mostly aimed at fighting illegal immigration; highlights that development funds for migration should not be used for strengthening border management and combating illegal immigration; insists that any future thematic programme on migration must be fully aligned with the EU’s development objectives and that the core funding under this programme must fulfil the ODA eligibility criteria; in particular, stresses that projects dealing with South-South migration should be given priority within the thematic programme;










33.


Stresses that a new thematic programme on ‘Investing in People’ must focus on – but not be limited to – the achievement of those MDGs which are most off-track, with particular attention to countries and regions with critical MDG indicators; emphasises that basic education and alphabetisation are the starting point for the process of awareness raising and for development ownership; therefore calls for the programme to include a focus on education as a tool for emancipation and participation;










34.


Believes that the new instrument should provide for a differentiated approach to funding for civil society organisations and local authorities, and also avoid pointless competition between the two types of actor; stresses the need to address the problem of the current programme’s over-subscription; calls for the results of the Structured Dialogue to be fully reflected in the future thematic programme and the proposed aid modalities;










35.


Points out that one of the reasons why the MDGs have not been fulfilled is the failure to recognise the contributions of the environment, natural resources and ecosystems to human development and poverty elimination; notes with concern that, while current European ODA allocates only 3 % of total spending to environmental issues, an additional problem is that a part of the EU and Member States’ funding to developing countries is invested in projects that foster climate change, rather than mitigate it; stresses that policy coherence for development must be improved in the area of climate change, especially in relation to climate funding and mainstreaming of climate change concerns into EU development cooperation;










36.


Points out that the Court of Auditors concluded in its ‘Special Report 6/2006’ that the EU has made only limited progress since 2001 in mainstreaming the environment in its development cooperation, as Country Strategy Papers did not take sufficient account of environmental issues; accordingly, urges the Commission to ensure that environmental issues are better mainstreamed and systematically monitored throughout all external policies and financial instruments, especially in the face of the current challenges of climate change and biodiversity loss;










37.


Reiterates that Article 290 TFEU is fully applicable to the DCI, and therefore emphasises that application of the delegated acts procedure is compulsory for those decisions which fulfil the criteria of Article 290 TFEU, including on the establishment of general objectives, priorities, expected results and financial allocations;




*
* *






38.


Instructs its President to forward this resolution to the Council and the Commission and to the governments and parliaments of the Member States.






(1)  OJ L 378, 27.12.2006, p. 41.

(2)  OJ C 46, 24.2.2006, p. 1.

(3)  OJ C 139, 14.6.2006, p. 1.

(4)  Annexed to the Communication of 24.10.2006 from the Commission to the European Parliament pursuant to the second subparagraph of Article 251(2) of the EC Treaty concerning the common position of the Council on the adoption of a Regulation of the European Parliament and of the Council establishing a financing instrument for development cooperation (COM(2006)0628).

(5)  Registered as comitology document No CMT-2007-1709 – annex registered as comitology document No CMT-2007-1709-2.

(6)  Registered as comitology document No CMT-2007-1709-3.

(7)  DCD/DAC (2007)39/final of 4.9.2007, 145 pages.

(8)  OJ L 354 of 31.12.2008, p. 62.

(9)  OJ L 201 of 3.8.2010, p. 30.

(10)  OJ C 287 E, 29.11.2007, p. 507.

(11)  OJ C 125 E, 22.5.2008, p. 213.

(12)  OJ C 146E, 12.6.2008, p. 337.

(13)  OJ C 175 E, 10.7.2008, p. 595.

(14)  OJ C 263 E, 16.10.2008, p. 624.

(15)  OJ C 294 E, 3.12.2009, p. 19.

(16)  OJ C 301 E, 13.12.2007, p. 249.

(17)  OJ C 212 E, 5.8.2010, p. 8.

(18)  Texts adopted P7_TA(2011)0032.

(19)  Texts adopted P7_TA(2011)0030.

(20)  Texts adopted P7_TA(2011)0033.

(21)  OJ L 184, 17.7.1999, p. 23.

(22)  See OECD/DAC: ‘Reporting Directives for the Creditor Reporting System’.