Source: EURLEX
Language: en
Format: md

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# 52012SC0117

**JOINT STAFF WORKING DOCUMENT Implementation of the European Neighbourhood Policy in Lebanon Progress in 2011 and recommendations for action Accompanying the document JOINT COMMUNICATION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Delivering on a new European Neighbourhood Policy /\* SWD/2012/0117 final \*/**

  

1.
Overall assessment and recommendations for
action

This document reports on the overall
progress made in implementing the EU-Lebanon ENP Action Plan between 1 January
and 31 December 2011, 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. For information on regional and
multilateral sector processes in the context of the Partnership for Democracy
and Shared Prosperity, readers should also refer to the Partnership for
Democracy and Shared Prosperity progress report.

Following the fall of the national unity
government in January 2011, the implementation of the ENP Action Plan stalled
in the first semester of 2011. The new cabinet of Prime Minister Najib Mikati,
which took office in July, showed strong commitment to cooperation with the EU.
High level visits, which were carried out, gave the bilateral relations an
additional impetus.  The Association Committee held its first meeting since
2007 and sub-committees resumed their work. Preparations for a new ENP Action
Plan were launched at the end of the year.

In the context of a volatile situation in
the Arab world, and most importantly in the neighbouring Syria, Lebanon successfully preserved its political stability, sovereignty and internal unity due to
the policy pursued by the government. Lebanon remained committed to its
international obligations and respected its financial commitment towards the
Special Tribunal for Lebanon (STL), and accepted the renewal of the STL mandate
for additional 3 years.

Human rights and fundamental freedoms are
generally respected in Lebanon. Freedom of expression, association and religion
can be exercised in a relatively liberal environment. A crucial milestone in
deepening Lebanon’s democracy will be the electoral reform, pending for many
years, on which discussion re-started in September 2011. Remaining challenges
include increasing the efficiency and independence of the judiciary, improving
the management of prisons and detention centres, abolishing the death penalty,
improving the treatment of migrants and refugees and increasing the
participation of women in political and social life. There was rather limited
progress in these areas in 2011.

Cutting corruption remains a major
challenge. A new administrative reform strategy was presented at the end of
2011. Plans for decentralisation have not been formulated yet. In the security
sector, the code of conduct adopted by the Internal Security Forces in January
2012 is expected to further contribute to a more citizen-oriented police
service. Furthermore, Lebanon needs to improve its border management.

The political stalemate of the first half
of 2011 and the events in Syria have taken their toll on several macroeconomic
indicators throughout the year. However, Lebanon managed to maintain economic
stability. The economic situation remains vulnerable, especially on the fiscal
front, given the high levels of government deficit and public debt. The ENP
Action Plan focuses inter alia on fiscal consolidation, public finance
management and progress towards establishing a fully functioning market
economy. Implementation of these priorities was mixed, with the prudent stance
of the central bank broadly supporting macro-economic performance and stability
but little progress being made on fiscal consolidation and structural reforms
including in the energy and telecommunication sector.

Lebanon’s lack of
progress in the accession to the World Trade Organisation (WTO) remains the
main obstacle to further trade liberalisation with the EU. The Lebanese
parliament still has to discuss and adopt a number of legislative proposals
necessary for the accession. Trade exchanges will be further facilitated by
improved computer tools for customs. According to the new legislation, an
independent National Council for Financial Markets will be set up to regulate
financial markets.

Lebanon needs to
improve its infrastructure to ensure basic services for the population and
improve the environment for businesses. Decreasing internet costs leading to
increased access to the broadband internet was an important step forward in
2011. Agreement on financing of the electricity sector plan, reached in
September 2011, may help address shortcomings in electricity supply.

There was rather limited progress in the
field of social policy with the exception of a wage hike for workers, which was
approved in early 2012. Structural measures that would improve social safety
nets and address poverty and social inequalities should be devised.

On the basis of this year’s report and with
a view to sustained implementation of the ENP Action Plan in 2012, Lebanon is invited to:

·
Adopt a new electoral law, in good time for the
legislative elections in 2013, bringing the electoral process further into line
with international standards.

·
Reduce the backlog of draft laws currently before
parliament and advance adoption of legislative proposals in key economic and
social areas.

·
Take measures to improve the effectiveness and
independence of the judiciary, including increased use of computers in courts
and independence of judicial appointments.

·
Pay special attention to enhancing the role of
women in both public and economy sectors respectively.

·
Take concrete steps to improve rights of the
Palestinian refugees to property, employment and social security, while
respecting the right of return principle.

·
Finalise and sign a comprehensive Memorandum of
Understanding between the Lebanese authorities and UNHCR to improve the
protection of refugees and asylum seekers.

·
Improve the management of public finances,
including the adoption of the long awaited law on public procurement, and adopt
a balanced state budget (this is a precondition for EU budget support).

·
Advance accession to the World Trade Organisation,
by adaptation of laws and progress in bilateral service negotiations, and sign
and ratify the regional Convention on pan-Euro-Mediterranean Rules of Origin.

·
Adopt structural measures in reforming the energy
sector; implement the electricity plan and enhance the use of renewables.

·
Take steps to strengthen the independence of the
Telecommunications Regulatory Authority with a view to possible liberalisation
of the sector.

·
Re-launch social dialogue and adopt a strategic
framework for vocational education and training in support of job creation.

2.
Political dialogue and reform
Towards Deep and
Sustainable Democracy

The new government formed in July 2011
upheld the commitment of the previous administration to prepare a new
parliamentary election law ahead of the legislative elections in 2013. A
new proposal presented by the Ministry of Interior and Municipalities
stimulated public debate across the political and religious spectrum. The
proposal addresses several of the recommendations made following the 2009 EU
Election Observation Mission, including some form of proportional
representation, improved election campaign supervision, pre-printed ballots,
out-of-country voting and a gender quota on candidate lists. However several other
crucial recommendations proposed by the EU Election Observation Mission in 2009
were not addressed. The draft does not propose the establishment of a truly
independent electoral commission. It does not propose to lower the voting age,
as this requires a constitutional amendment. The discussion on the electoral
reform started in 2011 and will continue in 2012. Consultation with civil
society was limited.

Civil society organisations in Lebanon operate within a relatively liberal framework without limitations on their freedom
of association and assembly. A further step towards formalising their
participation in the legislative process was the government’s call for
reactivation of the Lebanese Economic and Social Council. Nominations for
members of the Council have not been acted on since 2002. The Council should
establish a structural framework for the dialogue between civil society and the
Lebanese authorities.

Lebanon has a very
open and diverse media environment. But a few cases of limitations on freedom
of expression were observed in 2011. The activities of some filmmakers were
restricted. The National Audiovisual Council limited the airing of a small
number of television programmes, films and other artistic material that touched
upon ‘sensitive’ religious and political topics.

There was some progress on the independence
of the judiciary. The Government decided significantly to increase the
remuneration of judges in an effort to reduce the risk of corruption. However
key judicial appointments, such as the head of the Higher Judicial Council,
continue to be heavily influenced by both the legislature and the executive.
Inefficiency of the courts and delays result in denial of court access. The
excessive jurisdiction of military courts and the trying of civilians, who have
no connection with the military, violate the principle of a fair trial. The
computerisation of the Ministry of Justice continued in 2011. The EU continues
to provide financial support for judicial reform. A financing decision for a
new programme of EUR5 million was taken in 2011.

The public perception of corruption
in Lebanon remains poor. According to the corruption-perception index published
by Transparency International, Lebanon ranked 134th in 2011 compared
to 127th in 2010. There is no national strategy to tackle corruption.

In the security sector, some
progress took place within the Internal Security Forces (ISF). At the end of 2011 the ISF finalised their new code of conduct,
which opens the door to the development of a more citizen-oriented police
service. The members of the ISF Council of Command were
appointed after five years of negotiation. Furthermore
there has been greater cooperation between police services and the judiciary in
the context of criminal investigations. But mainstreaming of best practices and
closer inter-agency cooperation are still needed.

A new project Developing National
Capability for Security and Stabilisation, signed between Lebanon and the EU in December 2011 worth EUR12 million, aims at further enhancing ISF
organisational competences.

As for democratic control over the armed
forces, the efforts to resume the national dialogue and draw up a national
defence strategy that would ensure sovereign control by the Government did not
bring results in 2011. The UN, supported by the EU, continued to call on Lebanon to advance in implementing UN Resolution 1701 in particular with regard to the disarmament
of all armed groups and ensuring that there are no weapons on Lebanese
territory without the consent of the Government of Lebanon. The Lebanese Armed
Forces remained committed to cooperation with the UN Interim Force in Lebanon (UNIFIL).
At the end of 2011, a strategic review was launched with a view to a
progressive handover of UNIFIL functions to the Lebanese state.

Other Human
rights and governance-related issues

Human rights and fundamental freedoms in Lebanon are relatively well respected and enshrined in the legal framework. Nevertheless limited
violations occur in some areas. During 2011, three cases of judicial harassment
of human-rights defenders were reported. The Human Rights Action Plan is under
final discussion in the Parliament’s Human Rights Committee. The Action Plan should lay the groundwork for the
establishment of a National Human Rights Institution.

There are indications that torture
is not widespread but still occurs in Lebanon, mainly in detention centres,
prison facilities and police custody. Lebanon has ratified the UN Convention
against Torture as well as the Optional Protocol to the Convention.
Nevertheless it still has to establish a National Preventive Mechanism and
submit the required reports.

The situation of detainees in prisons
and detention centres continues to be of concern. Prison conditions are not
in line with international standards. Overcrowding, sub-standard conditions and
mistreatment were among the causes of prison riots in 2011. A high percentage
of imprisoned persons are in pre-trial detention, and a limited number serving
beyond their sentence. The transfer of authority over prisons from the Ministry
of Interior to the Ministry of Justice continued at a slow pace in 2011.

There is no agreement among political
actors on abolishing capital punishment. In the reporting period, the
courts handed down further death sentences in cases of Lebanese individuals
convicted of spying on behalf of Israel. Although no death sentence has been carried
out since 2004, the moratorium on executions has never been formalised through
a legal act.

There was limited progress in the area of women
rights. A draft law on the Protection of Women from Domestic Violence was
adopted by the council of minister in 2010 but continues to be opposed by
religious leaders. Lebanese legislation continues to prevent Lebanese women
from passing on their nationality to their children. A new legislative proposal
that facilitates the acquisition of citizenship by emigrants of Lebanese
descent, excludes from this possibility emigrants of ‘matrilineal’ Lebanese
descent. Lebanon did not lift its reservations on the Convention on the
Elimination of All Forms of Discrimination against Women (CEDAW). Female participation
in political life remains low. No woman was appointed to a ministerial post in
the new government and there are only four female members of the Lebanese
parliament. However, as encouraging step towards addressing gender related
issues, notably gender-based violence, the parliament repealed the penal code
provision mitigating so called crimes of honour. No significant progress was
noted in improving the rights of children.

Lebanon’s administrative
and legal framework governing refugees and asylum seekers remains
deficient (see chapter 5). No improvement is evident in the situation of Palestinian
refugees. Discrimination persists and covers employment, ownership of property,
social safety and political inclusion in general. The amendments to the Labour
law adopted last year did not lead to a tangible improvement in the situation
of Palestinian refugees in the labour market as many of the critical
implementation decrees have not been issued.

The unified standard contract for migrant
workers issued by government decree in 2009 is being more widely used.
However, there are still significant shortcomings in its application, in the
sponsorship system for domestic workers in general as well as in the fact that
the Lebanese labour laws are not applicable to domestic work.

The Office of the Minister of State for
Administrative Reform has drawn up a proposal for an administrative reform strategy
that focuses on the core functions of a modern state. It aims to foster a
transparent, accountable and effective public administration. The proposal has
been presented to the Council of Ministers for adoption. The EU is ready to support
the implementation of the strategy with EUR9 million through projects for which
the financing agreement was signed at the end of 2011.

Continued work on decentralisation
is among the priorities of the new government. However, no noticeable
development took place in 2011. An EU financial support package of EUR 20
million to assist the municipal finance reform was signed at the end of 2011.

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

The ministerial declaration of the new
government explicitly listed cooperation with the European Union among its
objectives. Dialogue with the EU resumed very intensively as soon as the
government was established, with several high level visits and ENP meetings
held in the second half of 2011.

The Lebanese government expressed continued
commitment to the UN Security Council Resolutions, mainly UNSCR 1701 and UNSCR
1757 establishing the Special Tribunal for Lebanon (STL). Lebanon honoured its obligations towards the STL and in November 2011 transferred its 49% share of
funding to the STL. On 30 June 2011 the Tribunal handed over to the Lebanese
authorities the indictments for four persons accused in relation to the
assassination of Prime Minister Rafiq Hariri in 2005. The Lebanese authorities
did not succeed in apprehending the accused persons in the reporting period.
The Lebanese Prosecutor General provided regular reports to the STL on efforts
undertaken in this regard. The STL mandate was extended for an additional 3
years in early 2012.

Lebanon has shown
commitment to continued work with UNIFIL on the implementation of the UNSCR
1701 and remains committed to the joint strategy between the Lebanese Armed
Forces and UNIFIL. In the reporting period the European UNIFIL peacekeepers
became subject of three separate attacks, strongly condemned by the Lebanese
government but investigations into these attacks have not shown any significant
results. The EU condemned these incidents and called on Lebanese government to
increase security measures and enable a safe environment for their work.

During 2011 Lebanon held the post of a
non-permanent member of the UN Security Council, handling particular
contentious issues during its presidency in September,  namely the UN
resolution on Libya, the bid for Palestinian statehood and proposed resolutions
on Syria. Lebanon has sought to
take a neutral approach, abstaining or declining to vote, on issues relating to
Syria.

In September 2011, Lebanon successfully hosted the Second Meeting of State Parties to the Convention on
Cluster Munitions attended by representatives of more than 120 countries. The
Ottawa Convention on Anti-Personnel Mines and the Rome Statute of the
International Criminal Court have still not been ratified by Lebanon.

In 2011, Lebanon sought a peaceful approach
to resolving differences in the delineation of its southern maritime border,
where the coordinates delimiting Lebanon’s Exclusive Economic Zone differ from
those used by Israel.

3.
Economic and social reform
Macroeconomic
framework and functioning market economy

Lebanon has been severely hit by the regional turmoil. The slowdown in exports
and inward investment led to a GDP growth rate of
only 1.5% for 2011 (from 7% in 2010). Consumer Price Index inflation accelerated to 5.4% in 2011 from 4.5% in 2010,
mainly due to sustained commodity prices.

On the fiscal front, Lebanon’s central government deficit widened to 8.3% of GDP in 2011 (from 7.5% in 2010)
following a rise in the wage bill and increased transfers to Electricité du
Liban. Lebanon’s public debt remains high at 134% of GDP, although its ratio has
considerably declined in recent
years partly thanks to rapid GDP growth.

Oil price increases and the rebound of
imports during 2011, combined with the impact of the regional turmoil on
tourism (a key sector of the Lebanese economy) and exports affected the current
account deficit which widened further to 14.1% of GDP in 2011 from nearly 10.6%
of GDP in 2010. Official foreign exchange reserves dropped
to $28.3 billion in the first half of 2011 (from $29.6
billion at the end of 2010) but they recovered subsequently at the end of August
and remain at comfortable levels, amounting to nearly $31 billion
at the end of 2011.

The banking sector is dominant in
the economy (with deposits representing around 300% of GDP) and politically
influential. A significant portion of its assets are devoted to holding the high
government debt. Financial stability risks have been mitigated in recent years
due to the strong official foreign exchange reserve cushion of the economy,
which has contributed to the credibility of the currency peg to the US dollar
(introduced in 1999).

Improving public
financial management and reforming the water, energy and telecommunications
sectors remain key elements of Lebanon’s reform agenda. In the area of public-debt
management, Lebanon, with assistance from the World Bank, has established a new
Debt Management Office within the Finance Ministry (MoF) and a Committee on
Debt Management where the Central Bank of Lebanon and the MoF are represented.

Employment and
social policy

While there are no official figures
available and authorities do not issue regular statistics, estimates indicate
that Lebanon’s unemployment rate was approximately 11% in 2011.  Youth
unemployment remained a particular concern, with unemployment for the age category
below 25 estimated at 21% in 2011. The Lebanese economy continued to suffer
from a lack of capacity to absorb young people entering the labour market, an
issue which is particularly acute for young graduates of the secondary and
university levels and leads many to emigrate.

An Economic and Social Action Plan
was prepared in 2011 by the Prime Minister’s Office, is currently under
discussion in the Council of Ministers. The Strategy is based on six pillars,
including the creation of a conducive business environment, rehabilitation of
infrastructure in basic social services such as energy, transport, water supply
and sanitation, human development including social protection, and regional
development.

The authorities also launched a specific
programme for the most vulnerable families, so as to tackle poverty and high
regional disparities (the most recent data from 2004 indicated that 28% of the
population were living on less than $4 per day); the programme covers about 52 000
families and includes assistance with electricity, drugs for chronic illnesses
and fostering access to education. A targeted ‘first job seeker’ pilot programme,
supported by a grant from the World Bank, was set up at the end of 2011 in
order to promote the entry into the labour market of graduates aged between 16
and 30 years.

On social protection, the new
government announced in its Ministerial Statement its intention to improve
social welfare and enhance universal coverage, notably of health insurance
through the National Social Security Fund. Draft legislation along these lines
was submitted to the Council of Ministers in September 20011. Efforts continued
to reform the pension scheme, so as to move away from a system of end-of-career
lump sum payments in the private sector.

Threats of a general strike by the General
Union of Labour Workers in October 2011 led the authorities to engage in
contacts and dialogue with social partners. After a series of controversies,
pay increases of 20-30% for the lowest earners were eventually agreed in
January 2012, once agreement between the Government and the State Council was
found and transportation and education allowances removed from the overall
financial package. The authorities also committed to reviving the Social and
Economic Council.

On labour standards, Lebanon launched procedures in January 2012 to ratify International Labour Organisation
(ILO) Convention 87 on the Freedom of Association and Protection of the Right
to Organise. The authorities also indicated their intention to revise the
labour law to eliminate discrimination and extend the coverage of the labour
law to migrant and notably domestic workers, as well as to transpose into
national legislation core ILO standards such as those on working times. First
steps were taken in September 2011, with a decision to open the labour market
to non-Lebanese citizens who are children or spouses of women of Lebanese
nationality. In February 2012, a Memorandum of Understanding was signed between
Lebanon and the Philippines, enhancing the treatment of migrant domestic
workers; the authorities indicated that the same treatment would be applied to
workers of other nationalities.

In the area of agriculture, the Government
issued decrees on fertilisers, seedlings, pesticides (pesticide prescription)
and decisions on post-harvest requirements. The Ministry of Agriculture (MOA) regulated
private nurseries and established a register for nurseries and revised test
requirements for imported agricultural products. The ministry also launched
pest-surveillance activities and initiated the National Biotech Committee. July
2011, the MOA launched the Agriculture and Rural Development Programme (EU
contribution EUR14 million) which aims to increase the overall performance of
the agriculture sector in order to achieve sustainable food security and to
improve the livelihood of rural and farming communities. It is expected that
40000 people will benefit directly from the Programme.

4.
Trade-related issues, market and regulatory
reform

In 2011 EU was the largest trading partner for
Lebanon, covering 29% of Lebanese trade. Bilateral trade volume has
been steadily growing since 2007 with an average annual
growth of 11.8% and amounted to EUR 5.6 billion in 2011.
EU imports from Lebanon consisted mainly of semi-manufactured goods (26.4%),
agricultural products (20.5%), fuel and mining products (16.2%), chemicals (12.9%),
machinery and transport equipment (9%). EU exports to Lebanon consist mainly of machinery and transport equipment (22.4%), energy products (26.3%), agricultural
products (14.8%) and chemicals (13.3%).

Lebanon has yet to notify the EU of the completion of
internal procedures for the entry into force of the Protocol on the Dispute
Settlement Mechanism, signed in November 2010.

No progress was made by Lebanon in 2011 in its accession process to the World Trade Organisation (WTO). Lebanon has yet to adopt a number of laws and to make progress in bilateral services
negotiations in the WTO accession context. The EU continued to provide
assistance for Lebanon's accession to WTO; a precondition for further deepening
of bilateral trade relations with the EU.

Computerisation of customs systems
included upgrades to existing systems and the rolling out of the customs clearance
automated information system and the electronic declaration system systems to
the whole customs territory.

In respect of the free
movement of goods and technical regulations, very little progress was made
in the preparations for negotiations on an Agreement on Conformity Assessment
and Acceptance of Industrial Products (ACAA). Lebanon has identified three priority sectors: electrical products,
pressure equipment and construction materials. Lebanon has not yet approved the
draft ACAA Action Plan. The Government approved the Metrology law in July 2010
but it has not yet been submitted to the Commission for assessment. The 2010 law on ‘Technical Regulations and Conformity
Assessment Procedures’ is not yet in line with the acquis. In October
2011, LIBNOR, the Lebanese organisation for standardisation, became an
affiliate member of the European Committee for Standardisation (CEN).

Regarding sanitary
and phytosanitary issues, the draft food safety law (which includes the establishment
of a food safety authority) and the draft animal quarantine law remained
pending. A phytosanitary strategy is in development. Lebanon upgraded
quarantine facilities.

Lebanon’s business
climate further deteriorated through the perceived political instability
due to the Arab Spring and, in particular, the situation in Syria. Lebanon’s ranking in the World Bank’s ’Doing
Business 2012’ annual report fell from 103 to 104 in comparison with the
previous year. The high cost of logistics, labour and
land in urban areas, poor supply of energy and the unpredictability of
administrative and juridical decisions continued to burden investors, while the
lower prices and faster speed of internet connections present a welcome
improvement.

The 2009 plan to facilitate the establishment
of a business without recourse to a lawyer was scrapped due to resistance from
the Bar Associations: the minimum legal fees for starting a business remain at
6 million Lebanese pounds (or around EUR 3000). The major obstacle to the
establishment of a business is the difficulty of obtaining construction
permits. The World Bank estimates that it requires 19 separate procedures,
taking a total of 219 days, with a cost that is around 235% of GNI per capita.
No significant reforms have been introduced in 2011 and it is estimated that
the cost of establishment rose during the year. Likewise there was no reform in
the area of company law in 2011.

Lebanon participated
in implementing the 2011-2012 industrial cooperation work programme that
Euro-Mediterranean Industry Ministers adopted on 11-12 May 2011 in Malta.

The Parliament reinforced the regulation of
financial services in August 2011 through a new law establishing an
independent body, The National Council for Financial Markets in Lebanon, to regulate and supervise capital markets.

Other key areas

The agreement on double taxation
between Lebanon and Italy was approved in May 2011 by the Italian Senate,
bringing the number of such agreements with EU member states to eight.

Lebanon announced
in August 2011 that, following a recommendation of an EU Twinning Project, the
Directorate of VAT and of Revenue would be merged to achieve better integration
of databases and shared, standardised procedures. Lebanon adopted a change in
tax recovery approaches from catching the citizen to running a risk-based
system promoting voluntary compliance.

The Ministry of Finance continued providing
the EU with the annual figures for state aid. The Parliament did not
deal in 2011 with the 2007 draft competition law, and the Government is
revising the draft.

The International Intellectual Property
Alliance reported in 2011 that piracy abuses continue to be a problem for
legitimate business in Lebanon. Enforcement of property rights is sporadic despite
improvements.

Draft legislation to modernise public procurement is still waiting for
parliamentary approval. The EU provided, through SIGMA, assistance in
developing public procurement legislation and a strategy.

The Central Administration for Statistics
(CAS) worked to improve the availability and quality of
national accounts, trade data and social statistics. It also studied with the
support of an EU-funded twinning programme, the feasibility of setting up a
business register. This work has suffered from a chronic lack of resources
allocated to CAS.

In cooperation with the World Bank, CAS
launched the National Household Budget Survey for 2011, for the first time
since 2004. The results will help assess poverty levels, provide weights for
the consumer price index, the main indicator of inflation, and give more
accurate and timely labour and unemployment figures.

A Public Expenditure Financial
Accountability (PEFA) exercise funded by the EU was finalised in August 2011. In
October 2011, the Ministry of Finance accepted the PEFA report as an unofficial
working document. This document constitutes a baseline for measuring Public
Finance Management reform in the future and for preparing a reform strategy
with the support of a EUR 13.7 million project.

Hearings took place during the last months
of 2011 at the Parliament to discuss the lack of closure of accounts since
2004. The head of the parliamentary commission on Budget and Finance suggested
that, given the role of the Court of Account as external auditor/controller
of the Government’s work, it should be placed under the control of the
presidency of the Republic and not, as today, under the control of the Prime Minister.

5.
cooperation on justice, freedom and security

During the year 2011 the controversy over
demarcation of the maritime border with Israel continued. In August 2011 the
Lebanese Parliament approved the delineation of the borders of its Exclusive
Economic Zone in line with the maps submitted to the UN in 2010. In September Lebanon lodged an official complaint with the UN Secretary General contesting the depositions made
by Israel in July 2011.

Lebanon still lacks
a comprehensive, integrated border management strategy. The border
between Lebanon and Syria, in particular, is not adequately delineated or
controlled and incursions into Lebanon by Syrian armed forces took place during
2011. EU support in securing and controlling the border in accordance with
international standards will be provided to Lebanon in the framework of the
Security and Stabilisation Programme, which was signed in December 2011. The
Lebanese authorities actively participated in the Mediterranean Transit Migration
Dialogue.

No progress was registered in the area of
asylum law, where Lebanon is still not a party to the 1951 Geneva Convention on
the Status of Refugees. In this context a revised Memorandum of Understanding
with UNHCR is needed to fill the protection gap. Nevertheless, at the end of
2011 Lebanese northern regions of Lebanon were giving hospitality to
approximately 5000 Syrians who in 2011 fled violence and persecution in their
country. In the course of 2011, UNHCR, in partnership with the Lebanese High
Relief Council, assisted more than 10000 people displaced from Syria; this also included the enrolment of children at Lebanese schools and psycho-social
support.

In August 2011, parliament adopted an
anti-trafficking law amending the Lebanese penal code to address the crime of trafficking
in human beings. The law provides for a clear definition of trafficking and
sets out penalties for traffickers.  Further consideration needs to be given to
the prevention of trafficking and the situation of children, who are not
addressed in the law.

In the fight against drugs, the Drug
Enforcement Unit of the Internal Security Forces continued further eradication
of hashish plantations in the Bekaa region.

A law on money laundering, including
provisions for the creation of an inter-ministerial committee to improve the fight
against organised crime and its financial aspects, was approved in late 2011.
No progress took place in other areas on the fight against organised crime,
including in relation to the draft law on cybercrime, which had been prepared
in 2010.

No progress was evident in the field of judicial
and law-enforcement cooperation and a number of international conventions
regarding family law, and notably children, remain unsigned. As part of the ‘Developing
National Capacity for Security and Stabilisation’ project, EU support will also
be given to strengthen the capacity of the Internal Security Forces to gather
evidence and reinforce judicial cooperation.

6.
Transport, energy, environment, the information
society, research and development

A land-transport strategy, that
includes the creation of a Land Transport Authority, was presented to the
Council of Ministers in September 2011. The Ministerial Statement mentioned the
organisation of the Public Licence system for vehicle, drivers and companies;
it is now theoretically being implemented but is unclear how it is enforced.  Restoration and upgrading of the railway
network (integrated into a multimodal service) remains stalled. After the
signature of a horizontal agreement in 2004, in December 2009 the European
Commission launched negotiations on a comprehensive Euro-Mediterranean Aviation
Agreement with Lebanon, aimed at regulatory alignment with EU standards and
mutual market opening. Those negotiations should be concluded in 2012. The
Lebanese flag remains on the black list of the Paris Memorandum of
Understanding on Port State Control.

Regarding energy, the parliament agreed,
in September 2011, upon the financing of a mid-term part of the energy strategy
agreed in 2010, tendering for this is expected to begin in May 2012. The
short-term part of the strategy has been agreed after extensive debate in April
2012, the long-term sections remain unfunded with indications that the government
will try to mobilise private investments. This strategy provides for additional
power plants and electricity networks with the aim of ensuring electricity
supply ‘round the clock’ from 2014. It is vital for implementing the electricity-sector
plan, which aims, inter alia, to restructure the heavily loss-making electricity
company Electricité du Liban and to reduce state subsidies. Parliament
set up a committee to prepare the establishment of an independent regulator,
already foreseen in the Electricity Law. In January 2012, the Government adopted
implementing decrees related to the Petroleum Law, aiming to facilitate
international investments. In November 2011, Lebanon launched a National Energy Efficiency Action Plan (NEEAP), which calls for the development of renewable energy sources (solar, wind,
hydro), the implementation of energy-efficiency measures and the development of
a financing mechanism. The aim is to have 12% of energy consumption produced,
by 2020, from renewable energy sources. The NEEAP would be instrumental in
developing the Mediterranean Solar Plan.

Lebanon submitted its Second National Communication to the UN Framework
Convention on Climate Change. No Clean
Development Mechanism project has yet been recorded by the UN. Lebanon is being encouraged
to build capacity and to engage in the new carbon market mechanism to be
developed following the 17th Conference of Parties to the United
Nations Framework Convention on Climate Change. It is also being encouraged
to fully implement the Cancun and Durban agreement and in particular to devise
a low carbon development strategy including updating information on targets or
actions that it will implement.

The Ministry of the Environment
revised its work programme for 2011-2013, focusing on three pillars: activation
and consolidation of the role of the ministry, conserving the country’s natural
wealth and managing environmental risks. Legislation was promulgated for the
quarrying and hunting sectors. A national strategy for natural marine reserves was finalised. Several waste-management projects were launched and
a master plan for the closure and rehabilitation of open and uncontrolled waste
dumps was finalised.

In the field of
civil protection, Lebanon intensified
the cooperation with the countries from the region and the exchange of best
practices with the EU in the field of disaster prevention, preparedness and
response through its participation in the EU Programme for Prevention of,
Preparedness for, and Response to natural and man-made.

The information society sector remains highly politicised as
it is one of the few sectors which consistently generate substantial revenues
for the Lebanese government. The State still fully owns the mobile and fixed
line networks and has not made any progress towards corporatising it, making liberalisation
unlikely. The Ministry of Telecommunications seeks to hold on to its role as a
licensing authority (particularly in the context of the new 3G networks active
since October 2011) instead of enabling the Telecommunications Regulatory
Authority (TRA) to licence telecommunications contracts. There is a need to
reinforce the capacities of the TRA and to ensure its independence and to
increase the sector’s attractiveness for private investment. In August 2011 the
government adopted a new pricing plan for the internet. While this has led to
substantially lowered tariffs and increased speeds for users, the Ministry’s development
plan for broadband internet remains limited to the most affluent areas of the
country and most notably central Beirut. There is still no national numbering
plan in Lebanon, no plan for infrastructure sharing and no universal service
provider.

In the area of research, a system of Innovation Vouchers is being prepared by the Industrial
Research Institute. Although Lebanon recently launched
a New Science Technology and Innovation Policy under the auspices of the
Conseil National pour la Recherche Scientifique, coordination at the national
level remains a challenge. Lebanon’s participation in the 7th
Framework Programme for Research and Technological Development remained limited.
Up to mid-October 2011, Lebanon had 14 signed grant agreements, involving 16
participants from Lebanon and benefiting from an EC financial contribution of EUR1.8
million. The number of applications was 15 of which 3 have been shortlisted.
This is in comparison to respectively 25 and 5 in 2010.

7.
people-to-people contacts, education and health

The political
uncertainties of the first half of 2011 slowed down the education and
training reform agenda. In 2011, Lebanon prepared a draft higher-education
law.  In October 2011, the Government announced the establishment of a National
Agency of Quality Control in education and highlighted the need for further
development of vocational and technical education based on labour market needs.

In the area of general education, Lebanon identified the actions to be implemented to introduce citizen education and
to avoid children dropping out of school, these measures being part of the
Education Sector Development Plan, which is supported by EU.

Higher education cooperation between the EU
and Lebanon continued under the Erasmus Mundus programme. Three
partnerships involving Lebanese universities were selected and the mobility of
more than 200 students will be organised (of these, 134 additional mobility
schemes were financed from the additional EU funding allocated under the ENP
review). Two additional Tempus IV university cooperation projects involving
Lebanese universities were also selected. Under the Marie Curie programme,
aimed at fostering international research collaboration, thirteen Lebanese
fellows underwent training within the ‘Initial training networks’ projects in Europe.

Following the approval in
2010 of the national education strategy framework and
the education sector development plan 2010-2015, the expected publication of a
strategic framework for vocational education and training did not take
place. The European Training Foundation continued its support to the Ministry
of Education in the establishment of the Lebanese National Qualification
Framework, including through a national consultation
conference in October 2011.

In the area of culture, Lebanon has not yet ratified the 2005 UNESCO Convention on the Protection and Promotion of
the Diversity of Cultural Expressions.  Lebanon participated in three Euromed
Heritage IV projects. Work was undertaken to transpose the 2003 UNESCO
Convention on the Protection of Intangible Heritage into Lebanese legislation.

A draft law on youth policy has
reached its final stages of preparation. Lebanese youth and youth workers continued
benefitting from the Youth in Action programme, but to a lesser extent
than previous years. The 20 projects selected in 2011 involved about 58
participants. Lebanon did not benefit from the Euromed Youth IV programme due
to internal difficulties.

Lebanon took some health
sector reform steps. Parliament adopted, in August 2011, a tobacco control
law, which prohibits smoking in public places, bans tobacco advertisements and requires
larger graphic warnings on cigarette packs. Lebanon participated in the EU-supported
‘Episouth Plus’ project aimed at increasing health
security in the Mediterranean region and South East Europe. The EU provided health assistance to Palestinian refugees.

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