REPORT on the proposal for a European Parliament and Council regulation extending and amending Council Regulation (EC) No 1659/98 on decentralised cooperation
(COM(2001) 576 – C5‑0509/2001 – 2001/0243(COD))

25 February 2002 - ***I

Committee on Development and Cooperation
Rapporteur: Maria Carrilho

PROCEDURAL PAGE

By letter of 23 October 2001 the Commission submitted to Parliament, pursuant to Article 251(2) and Article 179(1) of the EC Treaty, the proposal for a European Parliament and Council regulation extending and amending Council Regulation (EC) No 1659/98 on decentralised cooperation (COM (2001) 576 - 2001/0243 (COD)).

At the sitting of 25 October 2001 the President of Parliament announced that she had referred this proposal to the Committee on Development and Cooperation as the committee responsible and the Committee on Budgets and the Committee on Budgetary Control for their opinions (C5-0509/2001).

The Committee on Development and Cooperation appointed Maria Carrilho rapporteur at its meeting of 27 November 2001.

It considered the Commission proposal and draft report at its meetings of 23 January 2002 and 20 and 21 February 2002.

At the latter meeting it adopted the draft legislative resolution unanimously.

The following were present for the vote: Joaquim Miranda, chairman; Margrietus J. van den Berg, Marieke Sanders-ten Holte and Anders Wijkman, vice-chairmen; Maria Carrilho, rapporteur; Yasmine Boudjenah, Marie-Arlette Carlotti, John Alexander Corrie, Nirj Deva, Fernando Fernández Martín, Michael Gahler (for Jürgen Zimmerling), Vitaliano Gemelli, Karin Junker, Glenys Kinnock, Karsten Knolle, Paul A.A.J.G. Lannoye, Nelly Maes (for Didier Rod), Mario Mantovani (for Hervé Novelli), Maria Martens (for Luigi Cesaro), Miguel Angel Martínez Martínez, Hans Modrow, Luisa Morgantini, Tokia Saïfi, Francisca Sauquillo Pérez del Arco.

The Committee on Budgets decided on 21 November 2001 not to deliver an opinion; the Committee on Budgetary Control decided on 4 December 2001 not to deliver an opinion.

The report was tabled on 25 February 2002.

The deadline for tabling amendments will be indicated in the draft agenda for the relevant part-session.

LEGISLATIVE PROPOSAL

Proposal for a European Parliament and Council regulation extending and amending Council Regulation (EC) No 1659/98 on decentralised cooperation (COM (2001) 576 – C5‑0509/2001 – 2001/0243(COD))

The proposal is amended as follows:

Text proposed by the Commission [1]	Amendments by Parliament
Amendment 1 RECITAL 4 (new)
	(4)   The importance of a decentralised approach to development has now also been emphasised in the ACP-EU Partnership Agreement signed in Cotonou on 23 June 2000.
Justification Self-explanatory
Amendment 2 RECITAL 5 (new)
	(5)   This Regulation lays down, for its entire duration, a financial framework constituting the prime reference, within the meaning of point 33 of the Interinstitutional Agreement between the European Parliament, the Council and the Commission of 6 May 1999 on budgetary discipline and improvement of the budgetary procedure1, for the budget authority during the annual budgetary procedure.
	1 OJ C 172, 18.6.1999, p. 1
Justification This is the standard text taking the 1999 IIA into account, as used in the uprooted people Regulation (2130/2001 of 29 October 2001).
Amendment 3 RECITAL 6 (new)
	(6)   The measures to be taken for the implementation of this Regulation should be adopted in accordance with the Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission1.
	1OJ L 184, 17.7.1999, p. 23
Justification The regulation must be updated to conform to the new agreement on comitology, which provides for Parliament to monitor and give its opinion on the proceedings of the committees used in the exercise of implementing powers. The previous Regulation's provisions regarding comitology were based on the 1987 decision. The new Regulation's provisions should be based on the 1999 decision.
Amendment 4 RECITAL 7 (new)
	(7)   The establishment of a future strategic framework for decentralised cooperation will require an assessment of the operations financed by the Community under this regulation in particular and a wide-ranging debate on decentralised cooperation in general.
Justification See Amendment 9
Amendment 5 ARTICLE -1 (new) Article 3 (Regulation 1659/98)
	-   1. Article 3 is replaced by the following:
	The cooperation partners eligible for financial support under this Regulation shall be decentralised cooperation agents in the Community or the developing countries, namely: local authorities, non-governmental organisations, organisations of indigenous peoples, local traders’ associations and local citizens’ groups, cooperatives, trade unions, women’s and youth organisations, teaching, cultural and research organisations and institutions, churches and any non-governmental associations likely to contribute to development.

(Regulation 1659/98, showing changes: The cooperation partners eligible for financial support under this Regulation shall be decentralised cooperation agents in the Community or the developing countries, namely: local authorities, non-governmental organisations, organisations of indigenous peoples, local traders' associations and local citizens' groups, cooperatives, trade unions, women's and youth organisations, teaching, cultural and research organisations and institutions, churches and any non-governmental associations likely contribute to development.)

Justification

It is vital that indigenous peoples be involved in the process of sustainable development. Cultural development being an important factor in sustainable development, the eligibility of cultural bodies should be specifically mentioned.

Amendment 6 ARTICLE 1, PARAGRAPH 1 Article 4 (Regulation 1659/98)
1.   Article 4(1) is replaced by the following:	1.   Article 4 is replaced by the following:
"1. Community financing of the operations referred to in Article 1 shall cover a period of five years (1999 to 2003). The financial allocation for the implementation of this programme for the period 1999 to 2003 shall be EUR 24 million.	"1. The financial framework for the implementation of this Regulation for the period 1999 to 2003 is hereby set at EUR 24 million.
The annual appropriations shall be authorised by the budgetary authority within the limits of the financial perspective."	2.   The annual appropriations shall be authorised by the budgetary authority within the limits of the financial perspective."
Justification This is standard 'financial framework' text as used in the uprooted people Regulation.
Amendment 7 ARTICLE 1, PARAGRAPH 1 A (new) Article 8 (Regulation 1659/98)
	1a.   Article 8 is replaced by the following:
	1.   The Commission shall be assisted by the geographically determined Committee competent for development (hereinafter referred to as "the Committee")
	2.   Where reference is made to this paragraph, Articles 4 and 7 of Decision1999/468/EC shall apply, having regard to Article 8 thereof.
	The period laid down in Article 4(3) of Decision 1999/468/EC shall be set at one month.
	3.   The Committee shall adopt its rules of procedure.
Justification This updates the comitology procedure in line with the 1999 Decision, using the Council's standard text, as (with a small change) used in the uprooted people Regulation.
Amendment 8 ARTICLE 1, PARAGRAPH 2(1) Article 9 (Regulation 1659/98)
"1. Every two years, in accordance with the procedure referred to in Article 8(2) and (3), the Commission shall adopt strategic guidelines and priorities for the implementation of operations in the years ahead. It shall inform the European Parliament thereof.	"1. Every two years, in accordance with the procedure referred to in Article 8(2) and (3), the Commission shall review its strategic guidelines and adopt priorities for the implementation of operations in the years ahead. It shall inform the European Parliament thereof.
Justification Strategic guidelines should in general terms be valid for longer than two years as they should be well grounded, framed and elaborated in accordance with credible scenarios. Periodic evaluation and review are nevertheless appropriate. In conformity with this, priorities must be identified and affirmed or introduced.
Amendment 9 ARTICLE 1, PARAGRAPH 4 Article 12 (Regulation (EEC) 1659/98)
"Eight months at least before this Regulation expires, the Commission shall submit to the European Parliament and the Council an overall assessment of the operations financed by the Community under this Regulation, accompanied by suggestions concerning the future of this Regulation."	"Eight months at least before this Regulation expires, the Commission shall submit to the European Parliament and the Council an overall assessment of the operations financed by the Community under this Regulation, accompanied by suggestions concerning the continuing promotion of decentralised cooperation and the involvement of civil society."
Justification We are still awaiting the Commission's promised communication on civil society. Its involvement is stressed in the Cotonou Agreement but is also important for non-ACP developing countries. Until there has been a full debate on this and decentralised cooperation can be set within a full strategic framework, we cannot be sure that this regulation has any future beyond the end of 2003. We refer therefore to the continuing promotion of decentralised cooperation and the involvement of civil society rather than to this specific regulation, but underline the importance of the Commission's duly submitting the overall assessment in good time.

• [1] OJ C not yet published in OJ.

DRAFT LEGISLATIVE RESOLUTION

European Parliament legislative resolution on the proposal for a European Parliament and Council regulation extending and amending Council Regulation (EC) No 1659/98 on decentralised cooperation (COM(2001) 576 – C5-0509/2001 – 2001/0243(COD))

(Codecision procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to the European Parliament and the Council and the amendments to the proposal (COM(2001) 576[1]),

–   having regard to Article 251(2) and Article 179(1) of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C5‑0509/2001),

–   having regard to Rule 67 of its Rules of Procedure,

–   having regard to the report of the Committee on Development and Cooperation (A5‑0049/2002),

1.   Approves the Commission proposal as amended;

2.   Asks to be consulted again should the Commission intend to amend the proposal substantially or replace it with another text;

3.   Instructs its President to forward its position to the Council and Commission.

• [1] OJ C not yet published in OJ.

EXPLANATORY STATEMENT

Decentralised cooperation should be considered one of the key aspects of the cooperation and development policy promoted by the European Community[1].

Since 1989, the year when the concept was formerly introduced into the Lomé Convention, decentralised cooperation has made considerable strides.

In 1992, the Commission adopted the view that decentralised cooperation expresses the Community's desire to achieve the closer involvement in its programmes of a whole range of local agents with roots in civil society, both in Europe and in the developing countries, who have the capacity to propose initiatives of an original nature which can complement those of national governments in the development field[2]. In order to back up this objective, the budgetary authority created a special budget heading, again in 1992.

Three years passed, however, until the appearance of a proposal for a Council regulation on decentralised cooperation (submitted by the Commission on 10 July 1995).

A period followed in which both forward and backward steps were taken. The European Parliament, which had supported decentralised cooperation from the outset, introduced a number of amendments which may have had topical origins but nonetheless contributed to the consolidation of the idea (see the report by Luciano Vecchi).

Finally, after two years of discussions, the Council adopted its common position on 5 November 1997. Parliament considered this document to be over-restrictive and implicitly unfavourable to decentralised cooperation[3]. Following Parliament's recommendation for second reading on the Council's common position (March 1998), the regulation on decentralised cooperation was finally adopted on 7 July 1998. This regulation instituted 'operations and initiatives on sustainable development undertaken by decentralised cooperation agents of the Community and the developing countries' (Article 1). It covered a period of three years, with a financial reference amount of EUR 18 m for 1999-2001.

Following evaluations which proved favourable to continuing this approach[4], and two months before the expiry date of the regulation (23 October 2001), the Commission forwarded to Parliament a proposal for its extension up to the end of 2003.

The aim is now, in the words of the Commission's explanatory memorandum, 'to move on from an experimental phase to one of consolidation of the concept on a larger scale in the context of official cooperation'.

Parliament is, of course, in favour of this objective. It is meanwhile essential, in view of the tardy arrival of the Commission proposal, that Parliament should not introduce further delays into the procedure, since this would entail the risk of a legal vacuum (which could jeopardise receipt of funding by the beneficiaries, with adverse consequences that can easily be imagined). Our position is therefore that we should work for adoption at first reading. Your rapporteur nonetheless considers that a number of aspects need to be pointed up.

What is decentralised cooperation?

Despite the various occurrences of the term in the existing documents, the concept as such still does not seem to have been defined in a completely clear fashion. The Commission proposal speaks of the need for 'consolidation of the concept', and it appears useful to mention the passages which are of most interest for a definition.

Thus: decentralised cooperation 'is a new approach to development cooperation which places the agents at the focal point of implementation and hence pursues the dual aims of gearing operations to needs and making them viable'; or, decentralised cooperation 'is intended to help bring about a real change in the long term of the Union’s development cooperation procedures'[5].

If we attempt to place decentralised cooperation in the context of a strategic framework, we discover a number of dispersed aspects which have themselves not been defined properly, but which point in the direction of a cooperation policy for participatory development. One here finds reference to the importance of the principles of the appropriation by the partner countries of their own development strategies and of the widest possible participation by all sectors of society⁶[6]; and, furthermore, to the objectives of the reduction of poverty and the promotion and participation of civil society.

The Commission proposal also refers to future 'new strategic guidelines'[7], and a communication on civil society and development was expected to have been submitted by the Commission during the Belgian presidency.

We await that communication with great interest, in view of Parliament's concern that the various headings and instruments for implementation should be integrated into coherent EU strategies.

The beneficiaries of decentralised cooperation

Community support may be granted to actions and initiatives in the field of sustainable development proposed by actors within the Community or the developing countries, in particular where they are designed to promote a more participatory form of development, the strengthening and greater diversification of civil society, or grassroots democracy in the countries concerned.

The partners of this type of cooperation are: 'local authorities, non-governmental organisations, local traders' associations and local citizens' groups, cooperatives, trade unions, women's and youth organisations, teaching and research institutions, churches and any non-governmental associations likely to contribute to development. coordination measures'[8]. Given the importance of the cultural factor for national development and the dynamic role frequently played by cultural associations, we propose that this category of beneficiaries should also be given specific mention.

It should be added that the Cotonou Agreement states that 'the contribution of civil society to development can be enhanced by strengthening community organisations and non-profit non‑governmental organisations in all spheres of cooperation', and that this goal requires the provision of support and incentives for the creation and development of such organisations[9].

Budget aspects

The expired regulation 1659/98 established a financial reference amount for the implementation of the programme for the period 1999 to 2001 of ECU 18 m. The Commission informs us that the committed appropriations for this period amounted to €11 663 780. The financial reference amount in the previous regulation, adopted under the cooperation procedure, was indicative and not constraining on the budgetary authority.

The Commission, in Article 1(1)1, proposes a financial allocation for the period of 1999 to 2003 (of the new, extended regulation) of €24 m.

This means that €12 336 220 would be available for the remaining years 2002 and 2003. As this regulation will be adopted under the codecision procedure, the financial allocation does impose some constraints and should be respected if at all possible.

The 2002 Budget provides for €3 300 000 for the line B7-6002. Only the 2003 Budget remains to be set, as far as the new regulation is concerned.

In 2001 the Commission transferred €2 million from item B7-6000 (NGO cofinancing) to item B7-6002. This was done without any reference to Parliament, as the transfer was between two lines in the same chapter.

Parliament must at this point express its doubts about this kind of transfer in 2002.

If no transfer to B7-6002 were to be made in 2002, the sum of €9 036 220 should be provided in the 2003 Budget (€12 336 220 minus €3 300 000). In the light of the promised move from the experimental phase of decentralised cooperation to one of consolidation, this is not an unreasonable sum. If there were to be a transfer of, say, €2 m to the item, from whatever source, in 2002, the 2003 Budget provision would be reduced accordingly, to €7 036 220. This would be an acceptable sum. The Commission's proposal of a financial allocation of €24 m may therefore be maintained.

Conclusion

In the light of the above, Parliament approves the Commission's proposal extending and amending the existing regulation for a further period of just over a year and a half, since it wishes to believe that by the end of 2003 we will have obtained, within the EU institutions, a number of strategic clarifications and significant advances in the field of development cooperation policy.

• [1] See the recitals of Council Regulation (EC) No 1659/98 of 17 July 1998 on decentralised cooperation (OJ L 213, 30.7.1998, pp. 6-8).
• [2] See the regulation on cooperation with LDCs in Latin America and Asia.
• [3] See the Vecchi report (explanatory statement).
• [4] Cf. the seminar on capitalising on the experiences of decentralised cooperation projects held on 29 June 2000 and the report drawn up by an evaluation team at the Technical University of Berlin.
• [5] Recitals, Council Regulation (EC) No 1659/98 of 17 July 1998 on decentralised cooperation.
• [6] These points are stressed in the Council and Commission statement of 10 November 2000 on the Community's development policy.
• [7] Explanatory memorandum to the Commission proposal of 23 October 2001 for a European Parliament and Council regulation extending and amending Regulation (EC) No 1659/98.
• [8] see ibid., Articles 1 and 3.
• [9] Cotonou Agreement, Article 7.