CELEX: 51999PC0335
Language: en
Date: 1999-07-14
Title: Amended proposal for a European Parliament and Council Regulation (EC) on development cooperation with South Africa

COMMISSION OF THE EUROPEAN COMMUNITIES
                                              Brussels, 14.07.1999
                                              COM (1999) 335 final
                                              99/0070 (COD)
                        Amended proposal for a
 EUROPEAN PARLIAMENT AND COUNCIL REGULATION (EC)
             on development cooperation with South Africa
(presented by the Commission pursuant to Article 250 (2) of the EC-Treaty)
 ---pagebreak---                         EXPLANATORY MEMORANDUM
The proposed Regulation lays down the objectives and procedures for operations
under Budget line B7-3200.
The initial version of this proposal was presented by the Commission on 12 March
1999.
On the basis of a report by Mr Raimondo Fassa, Parliament (in its first reading)
approved the Commission proposal on 5 May 1999, subject to 6 amendments.
The Commission has communicated to the Parliament its position on the proposed
amendments, one of which can be accepted in full, two in part, and three of which the
Commission cannot accept.
The Commission therefore has to draw up an amended proposal incorporating those
amendments that it does accept (see underlined text) which are designed to ensure a
greater coordination and sustainability of programmes undertaken.
The amendments which the Commission was unable to accept concerned certain
committee procedures - rejected because clarity and consistency require that
uniformity be maintained in matters of comitology; systematic coordination in the
beneficiary country with the EIB - impractical as the EIB has no permanent
representation; and the formalisation of transmission of evaluations and reports to the
South African National Assembly, which would create a strange precedent.
The Commission’s initial proposal has been discussed by the Council’s Africa
Working Party, but no common position has yet been agreed.
                                            2
 ---pagebreak---                                   Amended proposal for a
       EUROPEAN PARLIAMENT AND COUNCIL REGULATION (EC)
                    on development cooperation with South Africa
THE EUROPEAN PARLIAMENT AND COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 179 thereof,
Having regard to the proposal from the Commission1,
Acting in accordance with the procedure laid down in Article 251,
(1)     Whereas, since the elections of April 1994 and the establishment of a
        democratic government, the Community has turned towards a strategy of
        support for the policies and reforms undertaken by the South African
        authorities;
(2)     Whereas the Council has adopted the Council Regulation (EC) N° 2259/96 of
        22 November 1996 on development cooperation with South Africa2;
(3)     Whereas this above-mentioned Regulation shall expire on 31 December 1999;
(4)     Whereas the Agreement on Trade, Development and Co-operation between
        the European Community and the Republic of South Africa stipulates in its
        Chapter VII that financial assistance in the form of grants shall be covered by
        a special financial facility established under the Community budget, that the
        Community declares its willingness to maintain its financial co-operation with
        South Africa at a substantial level, and that it will take the necessary decisions
        in this respect on the basis of a proposal by the Commission;
(5)     Whereas other appropriate instruments could be made available after this
        Agreement has entered into force, in particular in the framework of the future
        EC/ACP Co-operation Agreement and the eligibility of South Africa to the
        European Development Fund,
(6)     Whereas the above-mentioned Agreement contains in its Chapter V provisions
        on aims, priorities, methods and implementation of Development Cooperation
        with South Africa;
1
        COM (1999) 124 final, 12.3.1999.
2
        OJ L 306, 28.11.1996.
                                             3
 ---pagebreak--- (7)     Whereas in the light of the implementation of the Council Regulation (EC)
        N° 2259/96 of 22 November 1996 above-mentioned, and of the Special Report
        n° 7/98 of the Court of Auditors in respect of the European Community
        Development Aid Programme regarding South Africa (1986-1996), the
        Council Regulation (EC) N° 2259/96 of 22 November 1996 has to be adapted,
        in particular as concerns simplification of procedures, greater focus on sectoral
        priorities and decentralised decision-making;
(8)     Whereas assistance provided under this Regulation shall be implemented in
        coherence with actions of other donors, including multilateral institutions,
(9)     Whereas Council Decision 87/373/EEC of 13 July 19873 lays down the
        procedures for the exercise of implementing powers conferred on the
        Commission and the operation of the Committee that shall assist the
        Commission;
(10)    Whereas the operation of this Committee should follow the management
        procedure or the advisory procedure where the management procedure is not
        considered appropriate;
(11)    Whereas Council Regulation (EC, Euratom) N° 2988/95 of 18 December 1995
        on the protection of the Communities’ financial interests4 establishes a
        common legal framework for all the fields of the communities’ own resources
        and expenditure;
(12)    Whereas Council Regulation (EC, Euratom) N° 2185/96 concerning on-the-
        spot checks and inspections carried out by the Commission in order to protect
        the European Communities’ financial interests against fraud and other
        irregularities5 applies to all areas of the Communities’ activity without
        prejudice to the provisions of the Community rules specific to the different
        policy areas,
HAVE ADOPTED THIS REGULATION:
                                         Article 1
                                          Aims
The Community shall implement financial and technical cooperation with South
Africa to support the policies and reforms carried out by that country's national
authorities in a context of policy dialogue and partnership.
The aim of the Community cooperation programme, entitled the “European
Programme for Reconstruction and Development in South Africa”, shall be to
contribute to South Africa's harmonious and sustainable economic and social
development and to its insertion into the world economy and to consolidate the
3
        OJ L 197, 18.7.1987.
4
        OJ L 312, 23.12.1995.
5
        OJ L 292, 15.11.1996.
                                             4
 ---pagebreak--- foundations laid for a democratic society and a State governed by the rule of law in
which human rights and fundamental freedoms are fully respected.
Within this context the Community shall give priority to supporting operations which
contribute to the fight against poverty.
                                          Article 2
                                  Areas of cooperation
Development co-operation to be carried out under this Regulation will focus mainly
on:
-       support to policies, instruments and programmes aiming at the progressive
        integration of the South African economy into the world economy and trade,
        for employment creation, development of private sector, regional cooperation
        and integration. In this latter context, special attention will be given to
        providing support to the adjustment efforts occasioned in the region by the
        establishment of the free-trade area under the Trade, Development and
        Cooperation Agreement, especially in the SACU. Promotion of mutual general
        interest cooperation between European Union and South African businesses
        may be considered as well;
-       improvement of living conditions and delivery of basic social services;
-       support to democratisation, the protection of human rights, sound public
        management, the strengthening of local governments and involvement of civil
        society in the development process.
Dialogue and partnership between public authorities and non-governmental
development partners and actors will be promoted.
Programmes shall focus on fight against poverty, take into account the needs of the
previously disadvantaged communities and reflect the gender and environmental
dimensions of development.
                                          Article 3
                           Eligibility of cooperation partners
Cooperation partners eligible for financial assistance under this Regulation shall be
national, provincial and local authorities and public bodies, non-governmental
organisations and community-based organisations, regional and international
organisations, institutions and public or private operators. Any other body could be
eligible if so designated by both parties.
                                              5
 ---pagebreak---                                        Article 4
   Means, nature of expenses, information on the programme and coordination
1.     The means that may be deployed under the cooperation operations referred to
       in Article 2 shall include in particular studies, technical assistance, training
       or other services, supplies and works, and also evaluation and monitoring
       audits and missions.
2.     Community financing in local or foreign currency, depending on the needs
       and nature of the operation, may cover:
       –      government budget expenditures to support reforms and policy
              implementation in the priority sectors identified through a policy
              dialogue, under the form of direct sectoral budget support;
       –      investment and equipment;
       –      in certain cases, and in particular where a programme is implemented
              by a non-government partner, taking into account the fact that the
              programme has to aim as much as possible at long term sustainability,
              recurrent expenditure (including administrative, maintenance and
              operating costs).
       Part of the financing may be channelled, in a targeted manner (e.g. emerging
       entrepreneurs), in the form of risk capital or interest rate subsidies to
       European Investment Bank loans.
3.     A financial contribution from the partners referred to in Article 3 shall in
       principle be required for each co-operation operation. That contribution will
       be requested in accordance with the possibilities of the partners concerned
       and depending on the nature of each operation. It shall particularly be sought
       in cases where a project is designed as a start-up for an open-ended activity,
       in order to ensure the sustainability of such projects after Community
       funding has ceased. It may be in kind. In specific cases where the partner is
       either a non-governmental organisation or a community-based organisation,
       the contribution may not be required.
4.     The Commission may take any appropriate step to ensure that the
       Community character of aid provided under this Regulation is made known.
5.     Opportunities may be sought for potential cofinancing with other donors,
       particularly the Member States.
6.     In order to achieve the objectives of coherence and complementarity referred
       to in the Treaty and with the aim of guaranteeing optimal effectiveness of the
       aid, the Commission may take all necessary co-ordination measures, notably:
       a) the establishment of a system for the systematic exchange of information
           on actions financed or planned to be financed by the Community and the
           Member States, and the EIB;
                                           6
 ---pagebreak---         b) on-the-spot co-ordination of these actions by means of regular meetings
            and exchange of information between the representatives of the
            Commission and the Member States in the beneficiary country.
7.      The Commission, in liaison with the Member States, may take any steps
        necessary to ensure adequate co-ordination with other donors concerned.
                                       Article 5
                              Form of financial support
Financial support under this Regulation shall take the form of grants.
                                       Article 6
                                    Programming
1.      Triennial indicative programming based on specific objectives shall be
        carried out in the context of close contacts with the South African
        Government and taking account of the results of the co-ordination referred to
        in Article 4 (6) and (7). The indicative programming process will fully
        respect the principle of recipient led programming. Such a programming
        should result in aid being focused each year in a limited number of sectors
        identified amongst those areas referred to in Article 2. Provision is made
        where appropriate so that certain initiatives could be continued over longer
        time periods.
2.      In order to prepare for each programming exercise, in the context of
        increased co-ordination with the Member States, including on the spot, the
        Commission shall draw up a recapitulative document on co-operation
        strategy (Strategy Paper) to be examined by the Committee referred to in
        Article 8 hereafter referred to as the Committee. This Strategy Paper shall
        take into account the results of the most recent overall evaluation of
        operations financed under Regulation 2259/96 and under this Regulation, of
        other regular evaluations of operations. This document will be discussed at
        the request of the Commission or one or more Committee members. In that
        case, where it is not possible to reach a desirable consensus on the Strategy
        Paper, the Committee shall give its opinion in accordance with the procedure
        referred to in Article 8.
3.      The Commission shall forward a triennial Indicative Programme to be signed
        by the Commission and the South African Government, drawn up on the
        basis of that examination, to the Committee for information. An exchange of
        views shall take place once a year, on the basis of a presentation by the
        Commission’s representative of the general guidelines for the operations to
        be carried out in the year ahead.
                                           7
 ---pagebreak---                                    Article 7
                                 Procedures
1. The Commission shall be responsible for appraising, taking decisions on and
   managing operations conducted under this Regulation, in accordance with
   the budgetary and other procedures in force, notably those laid down in the
   Financial Regulation applicable to the general budget of the European
   Communities.
2. In the specific case of contribution of the EPRD to regional programmes in
   the SADC area financed from the EDF, this contribution may be utilised
   following Lomé Convention modalities, provided that the provisions of the
   Financial Regulation applicable to the general budget of the European
   Communities are respected.
3. In order to ensure transparency and achievement of the objectives referred to
   in Article 4 (6), the Commission shall forward project profiles to the Member
   States and their local representatives as soon as the decision to appraise them
   has been taken. The Commission shall subsequently update the project
   profiles and forward them to the Member States.
4. All financing agreements or contracts concluded under this Regulation shall
   provide for on-the-spot checks by the Commission and the Court of Auditors
   in accordance with the usual arrangements established by the Commission
   pursuant to the rules in force, in particular those laid down in the Financial
   Regulation applicable to the general budget of the European Communities.
   In addition, the Commission may carry out on-the-spot checks and
   inspections in conformity with Regulation n° 2185/96.
   The measures taken by the Commission in accordance with the procedure set
   out in Article 8 shall provide for adequate protection of the financial interests
   of the European Community in conformity with Regulation n° 2988/95.
5. Where operations give rise to financing agreements between the Community
   and South Africa, such agreements shall stipulate that taxes, duties and
   charges shall not be borne by the Community.
6. Participation in invitations to tender and contracts shall be open on equal
   terms to all natural and legal persons in the Member States, South Africa and
   the other ACP States. Participation may be extended to include third
   countries in duly substantiated cases and in order to ensure the best cost-
   effectiveness ratio.
7. Supplies shall originate in the Member States of the European Community,
   South Africa or the other ACP States. In duly substantiated exceptional
   cases, they may originate in other countries.
                                       8
 ---pagebreak--- 8. Except as otherwise in the present Regulation, contracts shall be signed by
   the South African Government. In addition, if a contract is not covered by a
   financing agreement, contracts shall be concluded by the Commission.
   In application of Article 111 of the Financial Regulation applicable to the
   general budget of the European Communities, payments will be made
   through a local Paying Agent which will be established by agreement
   between the South African authorities and the Commission, and by whom
   bank accounts in local currency and EURO will be opened. The Paying
   Agent must keep a full account of operations on these accounts and submit to
   the controls of the Commission and the Court of Auditors.
   In application of Article 109 of the Financial Regulation applicable to the
   general budget of the European Communities, a National Authorising Officer
   may be appointed.
                                   Article 8
                                Comitology
1. The Commission shall be assisted by a Committee, composed of the
   representatives of the Member States and chaired by the representative of the
   Commission.
2. The Commission representative shall submit to the Committee a draft of the
   measures to be taken. The Committee shall deliver its opinion on the draft
   within a time limit which the chairman may lay down according to the
   urgency of the matter. The opinion shall be delivered by the majority laid
   down in Article 148 (2) of the Treaty in the case of decisions which the
   Council is required to adopt on a proposal from the Commission. The votes
   of the representatives of the Member States within the Committee shall be
   weighted in the manner set out in that Article. The chairman shall not vote.
   The Commission shall adopt measures which shall apply immediately.
   However, if these measures are not in accordance with the opinion of the
   Committee, they shall be communicated by the Commission to the Council
   forthwith. In that event, the Commission may defer application of the
   measures which it had decided for a period of not more than one month from
   the date of such communication.
   The Council, acting by a qualified majority, may take a different decision
   within the time limit referred to in the previous paragraph.
3. By way of derogation to paragraph 2. above, for financing decisions
   concerning any operation at a cost of over EURO 5 million and below EURO
   25 million, or any adjustment of such an operation involving an increase of
   more than 20 % in the amount initially agreed, and proposals arising for
   substantive amendments in the execution of a project for which a
   commitment has already been made, the Committee shall deliver its opinion
   on the draft within a time limit which the Chairman may lay down according
                                       9
 ---pagebreak---           to the urgency of the matter, if necessary by taking a vote. The opinion shall
          be recorded in the minutes; in addition, each Member State shall have the
          right to ask to have its position recorded in the minutes.
          The Commission shall take the utmost account of the opinion delivered by
          the Committee. It shall inform the Committee of the manner in which its
          opinion has been taken into account.
4.        The Commission shall inform the Committee succinctly of financing
          decisions it intends to take concerning projects and programmes of a value of
          under EURO 5 million. Such information shall be given at least one week
          before the decision is taken.
5.        Where the increase referred to in paragraph 3. above is more than EURO 5
          million but less than 20 % of the original commitment, the Committee's
          opinion shall be sought by simplified and accelerated procedures.
6.        In case of programmes approved by the Committee and financed through
          tranches relating to more than one financial year, the Commission will take
          yearly subsequent financing decisions, not exceeding the determined
          maximum expenditure for the approved programme and in the limit of
          financial resources made available by the budgetary authority, without
          further communication to the Committee.
                                          Article 9
                               Monitoring and evaluation
After each financial year the Commission shall submit an annual report on
implementation of this Regulation to the European Parliament and the Council. The
report shall set out the budget turnout with regard to commitments and payments and
the projects and programmes financed in the course of the year. It shall contain
statistics on contracts awarded for implementing projects and programmes.
In addition the Commission shall monitor progress against each operations’ objectives
in terms of outputs and outcomes, using objectively verifiable indicators.
The Commission shall regularly evaluate operations financed by the Community to
determine whether those operations' objectives have been reached and to establish
guidelines for improving the effectiveness of future operations. Summaries of
evaluation reports shall be forwarded to the Member States. Full reports shall be made
available to Member States which request them.
By 31 October 2003 and eighteen months prior to the expiry of this Regulation, the
Commission shall submit to the European Parliament and the Council an overall
evaluation of the operations financed by the Community forming the triennial
programme 2000-2002 under this Regulation, accompanied if necessary by proposals
for amendments to it and in the latter case by suggestions for the future of the
Regulation.
                                              10
 ---pagebreak---                                        Article 10
                                 Annual appropriations
The annual appropriations shall be authorised by the budgetary authority within the
limits of the financial perspective.
Each year the budgetary description will fix a ceiling within the annual appropriation
for Technical Assistance contracts to be concluded by the Commission for the
carrying out of joint operations for the mutual benefit of the European Communities
and of the beneficiary.
                                       Article 11
                                       Duration
This Regulation shall enter into force on the third day following that of its publication
in the Official Journal of the European Communities and shall expire on 31 December
2006.
This Regulation shall be binding in its entirety and directly applicable in all Member
States.
Done at Brussels,
For the European Parliament                  For the Council
The President                                The President
                                           11