REPORT on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation and Regulation (EC) No 1889/2006 on establishing a financing instrument for the promotion of democracy and human rights worldwide

01.12.2009 - (COM(2009)0194 – C7‑0043/2009 – 2009/0060A(COD)) - ***I

Committee on Development
Rapporteur: Gay Mitchell

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation and Regulation (EC) No 1889/2006 on establishing a financing instrument for the promotion of democracy and human rights worldwide

(COM(2009)0194 – C7‑0043/2009 – 2009/0060A(COD))

(Codecision procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to the European Parliament and the Council (COM(2009)0194),

–   having regard to Article 251(2) and Articles 179(1) and 181, first paragraph, of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C7-0043/2009),

–   having regard to Rule 55 of its Rules of Procedure,

–   having regard to the report of the Committee on Development (A7-0078/2009),

1.  Approves the Commission proposal as amended;

2.  Notes that the wording of certain provisions of the proposed Regulation concerning the adoption of implementing measures will have to be adapted in the light of Articles 290 and 291 of the Treaty on the Functioning of the European Union;

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

Amendment  1 Proposal for a regulation – amending act Title
Text proposed by the Commission	Amendment
amending Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation and Regulation (EC) No 1889/2006 on establishing a financing instrument for the promotion of democracy and human rights worldwide	amending Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation
Amendment  2 Proposal for a regulation – amending act Citation 1
Text proposed by the Commission	Amendment
Having regard to the Treaty establishing the European Community, and in particular Article 179(1) and the first paragraph of Article 181 thereof,	Having regard to the Treaty establishing the European Community, and in particular Article 179(1) thereof,
Amendment  3 Proposal for a regulation – amending act Recital 2
Text proposed by the Commission	Amendment
(2) In implementing these Regulations inconsistencies have emerged regarding exceptions to the principle of non-eligibility for Community financing of costs related to taxes, duties and other charges. It is therefore proposed to amend the relevant provisions of Regulations (EC) Nos 1905/2006 and 1889/2006 in order to align them on the other instruments.	(2) In implementing Regulation (EC) No 1905/2006 inconsistencies have emerged regarding exceptions to the principle of non-eligibility for Community financing of costs related to taxes, duties and other charges. It is therefore proposed to amend the relevant provisions of that Regulation in order to align it with the other instruments.
Amendment  4 Proposal for a regulation – amending act Article -1 a (new) Regulation (EC) No 1905/2006 Recital 27
Text proposed by the Commission Amendment   Recital 27 of Regulation (EC) No 1905/2006 is replaced by the following:   "(27) The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission 4. In particular, the Commission should be empowered to adopt strategy papers and multiannual indicative programmes. Since those measures are of general scope and are designed to amend non-essential elements of this Regulation by supplementing it with new non-essential elements, they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC.   __________________________ 4 OJ L 184, 17.7.1999, p. 23. "
Amendment  5 Proposal for a regulation – amending act Article -1 b (new) Regulation (EC) No 1905/2006 Article 17 - paragraph 2
Text proposed by the Commission Amendment   Article 17(2) of Regulation (EC) No 1905/2006 is replaced by the following:   "2. Within the amount referred to in Annex IV, the Commission shall fix the maximum amount available to each Sugar Protocol country for financing the actions referred to in paragraph 1 on the basis of the needs of each country, related in particular to the impact of the reform of the sugar sector in the country concerned and to the importance of the sugar sector to the economy. The measurement of the allocation criteria shall be based on data of campaigns preceding 2004. Further instructions regarding the allocation of the overall amount among beneficiaries shall be defined by the Commission [...]. Those measures, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 35(3a)."
Amendment  6 Proposal for a regulation – amending act Article -1 c (new) Regulation (EC) No 1905/2006 Article 21
Text proposed by the Commission Amendment   Article 21 of Regulation (EC) No 1905/2006 is replaced by the following:   "Strategy papers and multiannual indicative programmes referred to in Articles 19 and 20, and any reviews thereof referred to in Article 19(2) and Article 20(1), as well as accompanying measures referred to in Article 17, shall be adopted by the Commission [...]. Those measures, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 35(3a)."
Amendment  7 Proposal for a regulation – amending act Article 1 a (new) Regulation (EC) No 1905/2006 Article 33 - paragraph 1
Text proposed by the Commission Amendment 1a. Article 33(1) of Regulation (EC) No 1905/2006 is replaced by the following:   "1. The Commission shall regularly monitor and review its programmes, and evaluate the results of the implementation of geographical and thematic policies and programmes, and of sectoral policies and the effectiveness of programming, where appropriate by means of independent external evaluations, in order to ascertain whether the objectives have been met and enable it to formulate recommendations with a view to improving future operations. Proposals by the European Parliament, the national parliaments or the Council for independent external evaluations will be taken into due account. Particular attention shall be given to social sectors and to progress made towards achieving the MDGs."
Amendment  8 Proposal for a regulation – amending act Article 1 b (new) Regulation (EC) No 1905/2006 Article 34 - paragraph 1
Text proposed by the Commission Amendment 1b. Article 34(1) of Regulation (EC) No 1905/2006 is replaced by the following:   1. The Commission shall examine the progress made in implementing the measures taken under this Regulation and shall submit to the European Parliament and the Council an annual report on the implementation and the results and, as far as possible, on the main outcomes and impacts of the assistance. This report shall also be submitted to the national parliaments, to the European Economic and Social Committee and to the Committee of the Regions.
Amendment  9 Proposal for a regulation – amending act Article 1 c (new) Regulation (EC) No 1905/2006 Article 35
Text proposed by the Commission Amendment   Article 35 of Regulation (EC) No 1905/2006 is replaced by the following: "1. The Commission shall be assisted by a committee.   2. Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof. The period laid down in Article 4(3) of the Decision shall be set at 30 days.   3. Where reference is made to this paragraph, Articles 3 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.   3a. Where reference is made to this paragraph, Article 5a(1) to (4) and Article 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.   4. The committee shall adopt its rules of procedure.   5. An observer from the EIB shall take part in the committee's proceedings, with regard to questions concerning the Bank."
Amendment  10 Proposal for a regulation – amending act Article 2 Regulation (EC) No 1889/2006 Article 13 - paragraph 6
Text proposed by the Commission Amendment Article 13(6) of Regulation (EC) No 1889/2006 is replaced by the following: deleted "6. Community assistance shall not in principle be used for paying taxes, duties or charges in beneficiary countries."

EXPLANATORY STATEMENT

In its legislative proposal for the mid-term review of the Development Cooperation Instrument (DCI), the Commission only proposes one technical amendment allowing costs related to taxes, duties and other charges related to the financing of actions under the DCI in beneficiary countries, to be financed from the DCI budget. The amendment will allow for the financing of these costs in exceptional circumstances, thus creating greater flexibility in the implementation of programmes and projects. The amendment should therefore be welcomed.

The Commission, however, proposed in its amending proposal to introduce an identical amendment to both Regulation (EC) No 1905/2006 (DCI) and Regulation (EC) No 1889/2006 (EIDHR), which fall into the competence of two difference committees within the European Parliament. Parliament therefore requested that the proposal be split into two different legislative proposals, one for each financing instrument and decided to refer the Commission proposal to two different committees: DEVE for the DCI, AFET (DROI) for the EIDHR. Your rapporteur therefore proposes a first set of three amendments deleting references to Regulation (EC) No 1889/2006.

Parliament has closely scrutinized the way the provisions of the DCI are implemented ever since it came into force in 2007. In the exercise of its right of scrutiny under the Comitology procedure, Parliament has raised a number of problems and objections regarding the way the Commission implemented the instrument, and the interpretation it gave to some of its core provisions. Parliament, however, did not find any major disfunctionalities in the provisions of the instrument as such. One of Parliament’s major concerns, the propensity of the Commission to finance under the geographical programmes measures not eligible, under the internationally accepted criteria of the OECD/DAC, as Official Development Assistance (ODA), has recently been solved by the Commission when it proposed, at Parliament’s request, to create a new legal basis for such measures under the Instrument for Cooperation with Industrialised Countries.

The second set of additional amendments proposed by your rapporteur therefore do not concern the substance or the priorities contained in the DCI – it should be reminded that during this parliamentary term negotiations for the successor instrument of the DCI (which expires at the end of 2013) will start -, but the strengthening of Parliament’s right of scrutiny.

There are two reasons for this:

1. In the six resolutions in the framework of the Comitology procedure Parliament adopted since the entry into force of the DCI, it signalled 12 instances in which the Commission exceeded its implementing powers by not respecting the ODA-eligibility requirement. In every instance, Parliament requested the Commission to modify its draft decision and bring it into line with this requirement. Only in three cases, however, did the Commission adapt or withdraw its draft decision;

2. The revision of the Comitology Decision took place in 2006 and introduced the Regulatory Procedure with Scrutiny (RPS), which must be applied to implementing measures under co-decided acts which fulfil two criteria:

-  the measures must be of a general scope;

-  the measures must be designed to amend non-essential elements of the regulation, i.e. by deleting some of those elements or supplementing the instrument by the addition of new non-essential elements.

The RPS procedure significantly strengthens Parliament's powers: Parliament’s veto right allows it to block a draft measure it objects against, and requires the Commission to present an amended proposal.

It is clear that the Strategy Papers and the Multiannual Indicative Programmes (MIPs) under the DCI fully comply with the criteria for the application of the RPS:

-  they are of a general scope, in the sense that they relate to an entire region, country or theme and have a long time scope (7 years for Strategy Papers, 3-4 years for MIPs);

-  they supplement the instrument by defining priority areas and objectives for the assistance given to a region or country or in a thematic area.

As a consequence, the RPS procedure must be applied to draft measures establishing strategy Papers and MIPs. For Annual Action Programmes and Special Measures, the application of the management procedure as currently foreseen in the DCI (right of scrutiny), would not have to be changed, as these measures have a more limited scope.

Although the amended Comitology decision introducing the RPS procedure dates from July 2006, this novel procedure came too late to be taken into account in the tripartite negotiations over the DCI which were already highly complex and operated under extreme time pressure. The mid-term review of the instrument now provides the appropriate opportunity to bring the DCI Comitology procedure in line with the Comitology decision.

It must be recalled that your rapporteur’s proposal is entirely consistent with the position expressed by Parliament in its resolution of 23 September 2008 with recommendations to the Commission on the alignment of legal acts to the new Comitology Decision[1]. This resolution includes the DCI regulation among the legal accts for which Parliament requests the Commission to provide legislative proposals for alignment to the RPS procedure. The Commission’s legislative proposal for the mid-term review of the DCI constitutes an ideal occasion to put Parliament’s request into practice and to ensure that the instrument complies with the new Comitology requirements.

• [1]  P6_TA(2008)0424

PROCEDURE

Title	A financing instrument for development cooperation (amendment of Regulation (EC) No 1905/2006)
References	COM(2009)0194 – C7-0043/2009 – 2009/0060A(COD)
Date submitted to Parliament	21.4.2009
Committee responsible        Date announced in plenary	DEVE 17.9.2009
Committee(s) asked for opinion(s)        Date announced in plenary	AFET 17.9.2009		INTA 17.9.2009
Not delivering opinions        Date of decision	AFET 28.9.2009		INTA 10.11.2009
Rapporteur(s)        Date appointed	Gay Mitchell 6.10.2009
Date adopted	23.11.2009
Result of final vote	+: –: 0:	22 0 0
Members present for the final vote	Thijs Berman, Michael Cashman, Corina Creţu, Véronique De Keyser, Catherine Greze, Enrique Guerrero Salom, Eva Joly, Franziska Keller, Gay Mitchell, Norbert Neuser, Maurice Ponga, Birgit Schnieber-Jastram, Michèle Striffler, Alf Svensson, Eleni Theocharous, Ivo Vajgl, Anna Záborská, Iva Zanicchi, Gabriele Zimmer
Substitute(s) present for the final vote	Bart Staes, Patrizia Toia
Substitute(s) under Rule 187(2) present for the final vote	Pascale Gruny
Date tabled	1.12.2009