REPORT on the proposal for a Council decision on a Community action programme promoting nongovernmental organizations primarily active in the field of environmental protection (COM(95)0573 - C4-0104/96 - 95/0336(SYN))

26 July 1996

Committee on the Environment, Public Health and Consumer Protection
Rapporteur: Mr Paul Rübig

By letter of 5 February 1996 the Council consulted Parliament, pursuant to Articles 189c of the EC Treaty and 130s of the EC Treaty, on the proposal for a Council decision on a Community action programme promoting nongovernmental organizations primarily active in the field of environmental protection (COM(95)0573 - C4-0104/96 - 95/0336(SYN)).
A LEGISLATIVE PROPOSAL - DRAFT LEGISLATIVE RESOLUTION
B EXPLANATORY STATEMENT
O P I N I O N

By letter of 5 February 1996 the Council consulted Parliament, pursuant to Articles 189c of the EC Treaty and 130s of the EC Treaty, on the proposal for a Council decision on a Community action programme promoting nongovernmental organizations primarily active in the field of environmental protection (COM(95)0573 - C4-0104/96 - 95/0336(SYN)).

At the sitting of 12 February 1996 the President of Parliament announced that he had referred this proposal to the Committee on the Environment, Public Health and Consumer Protection as the committee responsible and to the Committee on Budgets for its opinion.

At its meeting of 21 February 1996 the Committee on the Environment, Public Health and Consumer Protection appointed Mr Paul Rübig rapporteur.

It considered the Commission proposal and the draft report at its meetings of 26 June 1996 and 23 July 1996.

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

The following took part in the vote: Collins, chairman; Jackson and Jensen vice-chairmen; Rübig, rapporteur; Aparicio Sanchez (for Diez de Rivera Icaza), Apolinario, Blokland, Bowe, Burtone, Eisma, Florenz, Graenitz, Grossetête, Hardstaff (for Waddington), Hautala (for Breyer), Iversen, Kuhn, Lannoye, Olsson, Pimenta, Poggiolini, Pollack, van Putten, Schleicher, Valverde Lopez, Vieira (for Baldi) and White.

The report was tabled on 26 July 1996.

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

A LEGISLATIVE PROPOSAL - DRAFT LEGISLATIVE RESOLUTION

Proposal for a Council decision on a Community action programme promoting non-governmental organizations primarily active in the field of environmental protection (COM(95)0573 - C4-0104/96 - 95/0336(SYN))

The proposal is approved with the following amendments:

Text proposed by the Commission[1]Amendments by Parliament

(Amendment 1)

Fifth recital

Whereas the participation of representative european environmental organisations is required for the implementation of the Council Regulation on a Community ecolabel award scheme and the Commission Decision on the setting up of a Consultative Forum on the environment;

Deleted.

(Amendment 2)

Eleventh recital a (new)

Whereas non-governmental organizations often use voluntary labour and often receive donations in kind; whereas account should be taken of this special feature of their accounting systems when their revenue and expenditure, as well as their applications for subsidies, are considered;

(Amendment 3)

Eleventh recital b (new)

Whereas financial support should be designed in such a way as to take account of the environmental organisations' political independence and the need for openness concerning the use of this support;

(Amendment 4)

Twelfth recital

Whereas it is important to define the priority areas of action which the Community programme might support, while complying with polluter pays and the subsidiarity principles;

Whereas it is important to define the priority areas of action which the Community programme might support, while complying with the polluter pays and subsidiarity principles and whereas European environmental umbrella organizations should therefore be included;

(Amendment 5)

Fourteenth recital

Whereas it is necessary to specify the detailed rules for Community support under the programme;

Whereas it is necessary to specify the detailed rules for Community financial support under the programme;

(Amendment 6)

Article 1a (new)

Article 1a

Organizations operating at a European level shall be taken to mean both umbrella organisations and national organisations with partners in at least one other European country.

Environmental non-governmental organizations operating at a European level are private, non-governmental and non-profit making organisations with an environmental objective aimed at the public good.

(Amendment 7)

Article 2(2), first subparagraph

Community financial assistance may be provided for actions which are of Community interest, contribute significantly to the implementation of Community environmental policy and meeting the principles underlying the Fifth Action Programme.

Community financial assistance may be provided for actions which are of Community interest, contribute significantly to the implementation and further development of Community environmental policy.

(Amendment 8)

Article 2(2), second subparagraph

This assistance shall cover, in particular, the awareness campaigns and actions, information and documentation infrastructure, demonstration projects and co-ordination activities of non-governmental organizations initiated by these organisations themselves. Community financial assistance may also be considered for measures designed to strengthen cooperation between NGOs from different countries.

(Amendment 9)

Article 3(1)

The Commission shall establish the priority activities to be implemented within the fields of action defined in the Annex.

1. Activities shall be selected primarily on the basis of the following criteria:

(a) a sound cost-benefit ratio;

(b) a lasting multiplier effect at European level;

- activity planning;

- activity implementation;

- financial participation;

(d) cross-border cooperation in Europe, with special emphasis on joint projects with Eastern and Central European organisations;

(e) their contribution to the long-term integration of environmental education, training and further training into general, technical and vocational education;

(f) the exchange and exploitation of innovative experiences (interdisciplinary approaches, assessment, validation, etc.) at European level;

(g) the strengthening of civil society and participatory development.

(Amendment 10)

Article 3(2)

2. The Commission shall specify the additional criteria to be used for selecting the actions to be financed.

2. In general the following shall not receive funding:

(a) general education and information campaigns aimed at the general public;

(b) measures which have already been completed or are under way;

(d) simple transfers of national measures.

(Amendment 11)

Article 3a (new)

The Commission may ask environmental non-governmental organizations for an opinion on the activities subsidized.

(Amendment 12)

Article 6(1)

1. The rate of Community assistance shall, in principle not exceed 40 % of the budgeted operational and administrative expenditures.

1. While environmental non-governmental organisations are expected to seek other forms of support as well, the rate of Community assistance might, in principle, cover the entire budgeted operational and administrative expenditures.

(Amendment 13)

Article 6(2a) (new)

2a. In exceptional cases the Commission may grant European umbrella organizations an annual subsidy, which, however, may not amount to more than 30% of their operating costs in the previous year.

(Amendment 14)

Article 6(3)

3. The Community assistance will be for activities which are to take place in the current or a subsequent year of the grant.

3. The Community assistance will be for activities at least 75% of which are to take place in the current year of the grant, insofar as this can reasonably be required on the basis of the date of the contract for the granting of assistance. Unpaid work and donations in kind, if properly documented, can function as matching funds, if necessary, for EU-contributions.

(Amendment 15)

Article 6(3a) (new)

3a. In order to be able to apply for a grant in excess of ECU 100 000, a non-governmental organisation's accounts for the preceding two years, the years in which it receives grants and the year in which the activities in respect of which a grant has been awarded are completed, must be certified by a registered auditor, or the accounts must be kept in an officially recognised form (revenue and expenditure accounts and/or balance sheets).

(Amendment 16)

Article 7(3)

3. Actions under this programme shall be approved following an assessment of the proposals by 30 April of each year and shall give rise to an agreement, governing the rights and obligations of partners, concluded with the beneficiaries responsible for implementation.

3. Actions under this programme shall be approved following an assessment of the proposals by 31 December of the previous year and shall give rise to an agreement, governing the rights and obligations of partners, concluded with the beneficiaries responsible for implementation.

(Amendment 17)

Article 8(3a)(new)

3a. assessment of the project selection criteria on the basis of a costeffectiveness study shall be submitted to the budgetary authority before 1 September of each financial year.

(Amendment 18)

Article 12

No later than 30 June 1999, the Commission shall submit a report to the European Parliament and the Council on the implementation of this programme covering the first three years and shall make proposals for any adjustment to be made with a view to continuing the action beyond the current phase.

The Council, acting by qualified majority on a proposal from the Commission, shall decide on the implementation of the subsequent phase as from 1 January 2000.

No later than 30 April 1999, the Commission shall submit a report to the European Parliament and the Council on the implementation of this programme covering the first three years and shall make proposals for any adjustment to be made with a view to continuing or not continuing the action beyond the current phase.

The Council, acting on a proposal from the Commission and in accordance with the procedure laid down in Articles 130s(1) and 189c, shall decide on the implementation of the subsequent phase as from 1 January 2000.

(Amendment 19)

Annex, Part B, Title

B. Analysis of environment activities 40%

B. Analysis of environment activities 50%

(Amendment 20)

Annex, Part C

C. Cooperation between actors in the environment and nongovernment organisations active at European level 20%	C. Cooperation between non-government organisations active at European level 10%
- Promote cooperation between partners identified by the Fifth Action Programme for the environment,	Deleted
- Encourage multisectoral approach to environment protection,	- Encourage multisectoral approach to environment protection,
- In the framework of the principle of subsidiarity, complement the Community programmes with the national, regional and local environmental activities operating in the not-for-profit sector.	- In the framework of the principle of subsidiarity, complement the Community programmes with the national, regional and local environmental activities operating in the not-for-profit sector.

Legislative resolution embodying Parliament's opinion on the proposal for a Council decision on a Community action programme promoting non-governmental organizations primarily active in the field of environmental protection (COM(95)0573 - C4-0104/96 - 95/0336(SYN))

(Consultation/cooperation procedure: first reading)

The European Parliament,

- having regard to the Commission proposal to the Council (COM(95)0573 - 95/0336(SYN))[2],

- having been consulted by the Council pursuant to Article 189c and 130s of the EC Treaty (C4-0104/96),

- having regard to Rule 58 of its Rules of Procedure,

- having regard to the report of the Committee on the Environment, Public Health and Consumer Protection and the opinion of the Committee on Budgets

(A4-0258/96),

Approves the Commission proposal, subject to Parliament's amendments;

Calls on the Commission to alter its proposal accordingly, pursuant to Article 189a(2) of the EC Treaty;

Calls on the Council to incorporate Parliament's amendments in the common position that it adopts in accordance with Article 189c(a) of the EC Treaty;

Asks to be consulted again should the Council intend to make substantial modifications to the Commission proposal;

Instructs its President to forward this opinion to the Council and Commission.

[1] OJ C
[2] OJ C

B EXPLANATORY STATEMENT

1. INTRODUCTION

The Commission proposal under consideration is designed to fulfil an undertaking given by the Commission in its communication to the budgetary authority concerning legal bases and maximum amounts, in particular as regards the activities funded under Article B4-306 of the budget. The undertaking goes back to 1982, when Parliament, Council and the Commission adopted a joint declaration on measures to improve the budget procedure. Budget heading B4-306 finances three areas of activity: awareness activities, subsidies and publications. Legal bases already exist for the first and last of these activities but not, so far, for the second. The proposal therefore seeks to remedy this deficiency, thus meeting the desire of the budgetary authority (Parliament and Council) not to authorize any further expenditure for which no clear, specific legal basis exists.

2. NATURE OF THE

SUBSIDIES TO BE GRANTED

In the past, the entire budget heading B4-306 was usually allocated between ECU 8 m and ECU 7 m. Of this, around two-thirds was spent on awareness activities, for which NGOs and other organizations could submit applications. Around ECU 0.5 m was used for publications and around ECU 2.5 m for subsidies to NGOs working in the environmental field at European level. The Commission proposal deals exclusively with the latter category of environmental NGOs working at European level and are not tied to specific tasks: they are intended to fund the administrative expenditure of such NGOs.

In 1995, eleven NGOs were granted less than ECU 100 000 and five NGOs received more than ECU 100 000. By far the largest recipient, with nearly ECU 500 000, was the European Environment Agency in Brussels, which is an umbrella body for nearly all environmental organizations operating in Europe.

The Commission has allocated the subsidies in recent years in accordance with a selection procedure, the criteria for which were published in the Official Journal of the European Communities. This procedure, which came into being as a result of pressure from Parliament, has resulted in greater transparency.

3. HOW IMPORTANT ARE ENVIRONMENTAL ORGANIZATIONS?

It has become clear in recent years that, at a time when the principles of subsidiarity and deregulation are being emphasized, it cannot be assumed that the regulatory framework governing environmental matters will grow further. On the contrary, it is more likely that in the next few years the emphasis will be on fine-tuning the existing rules. The second instrument of environmental policy - fiscal and economic measures - is also not especially popular at European level. An example would be the proposal for the introduction of a Europe-wide CO2 tax. This proposal is not supported by most Member States and as a result some States are seeking to go it alone.

For these reasons, the third instrument of environmental policy, awareness measures, is all the more important. This is the only means by which a climate can be created to enable essential legislative, fiscal or economic measures to be implemented. Environmental NGOs play an important part in this. In the past they have often been the first to point to the need for certain measures. Their ideas have very frequently been taken up and put into practice by political parties and governments.

Environmental policy no longer has the momentum it had in recent years, particularly at European level. Some Member States are blocking the introduction of stringent rules but the Commission, too, has lost its leading role. The implementation of environmental aspects in other policy areas is progressing too slowly. For this reason, environmental organizations operating at European level have an important role to play. They are often a source of timely warnings and practical proposals.

It is worth asking, in this connection, whether the European Parliament might not usefully hold a public hearing on the role of environmental NGOs.

4. THE COMMISSION PROPOSAL

Article 2(2) and the Annex of the proposal seek to lay down the objectives of the subsidies. Under Article 3(1), the Commisison is to establish priorities within the fields of action. In addition, the Commission is to be authorized to specify additional criteria for selecting the measures to be funded.

Article 6 proposes that Community assistance should not exceed 40% of the budgeted operational and administrative expenditures. The subsidy would not last for more than three years and would be provided only for activities which were to take place in the current or a subsequent year of the grant. Subsequent articles relate to financial matters.

The Annex contains a list of activities for which subsidies may be granted.

5. ASSESSMENT

Your rapporteur, like the Commission, believes that the granting of public funds must be subject to strict conditions to prevent any misuse and ensure that the funds are used as efficiently as possible. In addition, the Commission, when allocating funds, is always tied by the Financial Regulation.

A special feature of NGOs is that they operate in a different manner from commercial organizations. Much of their labour is given voluntarily or for a small payment. Many NGOs also receive donations in kind. Your rapporteur therefore believes that account must also be taken of these features which are specific to NGOs.

It is unfortunate that environmental NGOs were not given the opportunity to make their views known before the Commission proposal was adopted, although the Commission usually seeks the opinion of those affected by a proposal. This is precisely the sort of case in which an accurate understanding of the financial problems facing NGOs would have been helpful, so that as much account as possible could be taken of them.

In its recitals, the Commission refers twice to subsidiarity. Your rapporteur understands subsidiarity, in this context, to mean that it is the role of national governments to give financial support to national environmental bodies, while the Commission is responsible for organizations active at European level. It follows that the relatively numerous European environmental organizations with an office in Brussels are dependent on the Commission for subsidies since their activities have nothing to do with Belgium.

As has already been mentioned, the Commission proposes that aid should in principle amount to only 40% of the budgeted operational and administrative expenditures. Your rapporteur agrees with this formulation, since it is important to ensure that an NGO does not become completely dependent on financial aid from the Commission. The fact that subsidies are in principle to last for no more than three years is also to be welcomed. However, the expression 'in principle' should be defined more precisely. Firstly, a higher percentage would mean that less money was available overall for other NGOs. Secondly, however, NGOs must themselves seek to ensure that their activities are on a sound financial footing.

On the other hand, there are good reasons for the Commission to grant partial, long-term aid to certain NGOs which have a coordinating and guiding role but receive no financial contributions from their members. If the system of financial support were ended, this would signal the end of some organizations whose views and criticisms ought not to be ignored. This would certainly not be in the interests of the Commission, Parliament or environmental policy in general.

In the Annex, the Commission proposes to support cooperation between 'actors in the environment' and non-government organizations active at European level. However, the list in the Financial Statement indicates that the Commission intends to pay for the 'annual meetings of the consultative forum and other dependent meetings'. Your rapporteur cannot agree to this.

6. CONCLUSION

All members of the public and groups working to achieve environmental objectives must have the opportunity to obtain a share of this funding. Widespread involvement in political objectives will ensure that they have a sustainable future. Umbrella organizations play an important coordinating role and must operate as efficiently as possible, with account being taken of the subsidiarity principle.

O P I N I O N

(Rule 147 of the Rules of Procedure)

of the Committee on Budgets

for the Committee on the Environment, Public Health and Consumer Protection

Draftsman: Mrs Fiorella Ghilardotti

At its meeting of 24 January 1996 the Committee on Budgets appointed Mrs Fiorella Ghilardotti draftsman.

At its meeting of 11 March 1996 it considered the draft opinion.

At the latter meeting it adopted the conclusions as a whole unanimously.

The following took part in the vote: Samland, chairman; Bloch von Blottnitz (for Müller), Bösch, Colom i Naval, Desama (for Dankert), Fabra Vallés, Ghilardotti, Haug, Jöns (for Krehl), König, McCartin, Wemheuer (for Dührkop Dührkop) and Wynn.

OBJECTIVE OF THE ACTION

The Commission justifies the presentation of this proposal for a decision in three ways:

- legally,

- economically and

- environmentally.

As regards the legal justification, the proposal is intended to fulfil the undertaking given by the Commission in its Communication on legal bases and maximum amounts to provide a legal basis for initiatives financed under Article B4-306.

Article B4-306 comprises three activities, for two of which the Commission's existing powers are sufficient.

B4-306 Awareness activities and subsidies
1995 Budget	1996 PDB	1996 DB	1996 Budget
8 400	8 400	p.m.	7 500

Breakdown of Article B4-306	1995Budget	1996PDB
1. Awareness activities	5 500	5 500
2. Subsidies for the European Environment Organizations	2 500	2 500
3. Publications	400	400

With regard to the economic justification, i.e. the economic impact, experience shows that use of the existing structures (relays and networks) is the most cost-effective method.

According to the Commission, the information and awareness actions to be covered by this programme will have a significant multiplier effect and will enhance national environmental protection measures while respecting the subsidiarity principle.

The coordination of projects which have a high multiplier coefficient, as well as cooperation with a very wide group of actors (business, unions, media, policy makers and international institutions) increase awareness of the problem of damage to the local and Community environment.

According to the Commission, the European environmental NGOs have already demonstrated a high level of motivation.

CONSIDERATION OF THE PROPOSAL

It should be recalled that, as a result of the above-mentioned Communication on legal bases, the Committee on Budgets adopted a position on the matter, taking the view in particular that 'the establishment of legal bases for embarking on Community actions funded by the Community budget reinforces a sense of responsibility in the management of the Union's finances and increases the budgetary authority's credibility'[1].

Although the fact that the Commission has given this action an appropriate legal basis is to be welcomed, it should not be forgotten that the sums allocated to this line will be allocated under the annual budgetary procedure and might therefore be subject to revision. It is worth recalling the words of the above-mentioned report in this connection: Considers, therefore, that the question of the legal basis cannot be resolved without, at the same time, greater acceptance by the Council and Commission of the priorities of the European Parliament adopted in its resolution voted on before presentation of the preliminary draft budget by the Commission[2].

It should be noted that Parliament entered ECU 7.5 million against this line at second reading of the 1996 budget, whereas in the 1995 budget it entered ECU 8.5 million; this sum, incidentally, was reinstated in the PDB by the Commission and replaced by a token entry by the Council.

In its remarks, the budgetary amendment adds that the financing of these actions should take account of the public health effects. There is no mention of such effects in the financial statement. The Commission would do well to take this aspect into account.

Out of a total of ECU 8.4 million (1996 PDB), ECU 2.5 million are earmarked for subsidies for NGOs active in the field of environmental protection. The draftsman would remind the Commission, in the light of its undertakings, of the non-automatic nature of the appropriations, whether or not renewed by the budgetary authority, and of the major adjustments which may prove necessary with regard to the allocation of the amounts within the line.

Article 6 lays down restrictions on Community assistance: it must not exceed 40% of operating expenditure, the subsidy to cover administrative support must not last for more than three years, and activities must take place in the current or the following year. The draftsman considers that the budgetary authority could require 75% of the actions instituted on the basis of Community subsidies to be instituted during the current budgetary year.

In relation to NGOs and the activities financed by them, two questions need to be raised:

- what are the criteria determining the Commission's choice of NGO or project? What proportion does the Community contribute compared with other sources of finance?

- in addition to the audits carried out by the Court of Auditors (Article 188c), Article 8 provides for inspection by the Commission pursuant to Article 209c. In the interests of budgetary transparency, the results of those controls and a cost-effectiveness analysis by activity should be submitted to the budgetary authority before 1 September of each financial year.

The Annex to the proposal for a decision envisages the following indicative allocation of the funds:

- 40% for information on the environment;

- 40% for analysis of environment activities;- 20% for NGOs active at European level.

There is a certain inconsistency between that operational allocation and the budgetary breakdown: the latter earmarks ECU 5.5 million for awareness activities and ECU 2.5 million for subsidies for NGOs (which represents only 20% of the total package).

Explanations should be provided on this matter.

A summary total in the Annex allocates 70% of the Community funds to operational activities and 30% to administrative support. Those percentages could be 80% and 20% respectively; since some actions are implemented in collaboration with national government departments or official bodies with responsibility for the environment, the Union's administrative support should be reduced.

One final point should be mentioned: the linking of this action, which may be described as horizontal, with the other environmental protection actions in Chapter B4-30. This question also applies for the prerogatives and work programme of the European Environment Agency: what proportion of the awareness activities and publications will it be responsible for, and how can the budgetary authority monitor the risks of overlapping?

In the light of the above considerations, the Committee on Budgets invites the Committee on the Environment, Public Health and Consumer Protection, which is the committee responsible, to endorse the preceding remarks and to incorporate the following amendments in its report

Commission text

Amendment

(Amendment 1)

Fourteenth recital

Whereas it is necessary to specify the detailed rules for Community support under the programme;

Whereas it is necessary to specify the detailed rules for Community financial support under the programme;

(Amendment 2)

Article 6(3)

3. The Community assistance will be for activities which are to take place in the current or a subsequent year of the grant.

3. The Community assistance will be for activities of which at least 75% are to take place in the current (three words deleted) year of the grant.

(Amendment 3)

Article 8(4) (new)

4. An assessment of the criteria used for selecting projects on the basis of their cost-effectiveness shall be submitted to the budgetary authority on 1 September of each budgetary year.

(Amendment 4)

Article 12

The Council, acting by qualified majority on a proposal from the Commission, shall decide on the implementation of the subsequent phase as from 1 January 2000.

No later than 30 March 1999, the Commission shall submit a report to the European Parliament and the Council on the implementation of this programme covering the first three years and shall make proposals for any adjustment to be made with a view to continuing, or not continuing, the action beyond the current phase.

The Council, acting by qualified majority, and the European Parliament, on a proposal from the Commission, shall decide on the implementation of the subsequent phase as from 1 January 2000.

[1] Report A4-0308/95.
[2] Ibid.

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