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State aid to shipbuilding

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State aid to shipbuilding

Outline of the Community (European Union) legislation about State aid to shipbuilding

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Competition > Rules applicable to specific sectors > Competition in transport

State aid to shipbuilding (I)

Document or Iniciative

Council Regulation (EC) No 3094/95 of 22 December 1995 on aid to shipbuilding [See amending acts].

Summary

Regulation (EC) No 3094/95, which was the result of an agreement concluded in 1994 within the framework of the Organisation for Economic Cooperation and Development (OECD) regarding normal competitive conditions in the commercial shipbuilding and repair industry, cannot enter into force until the agreement has been ratified by all the parties. Given the reluctance by the United States to ratify, the Council initially adopted Regulation (EC) No 1540/98 in its place. This Regulation has now expired and has been replaced by the link on state aid to shipbuilding.

Definition of some of the terms used in the Regulation (“shipbuilding”, “ship repair”, etc.).

Enumeration of the various types of aid and the conditions which must be satisfied for them to be judged compatible with the common market:

  • social assistance (when such aid is intended to cover the cost of measures for the exclusive benefit of workers who lose retirement benefits or who are made redundant or are otherwise permanently deprived of their employment in the respective shipbuilding, conversion or repair enterprise, when such assistance is related to the discontinuance of shipyard activities, bankruptcy, or changes in activities other than shipbuilding, conversion or repair);
  • research and development aid (when such aid relates to fundamental research, basic industrial research, applied research or development, provided the limits set by the Regulation are observed);
  • indirect aid (when this is given in the form of state loans and guarantees, as development assistance to a developing country or for the building or conversion of ships, provided the conditions laid down in the Regulation are observed).

Derogations in favour of Spain, Portugal and Belgium, whereby reconstruction aid granted in the form of investment assistance and any other aid for social measures not covered by the Regulation and granted after 1 January 1996 may be authorised, provided the conditions laid down in the Regulation are observed.

Possibility of considering other aid to be compatible in the particular cases listed in the Regulation.

Monitoring procedure:

  • obligation on Member States to give the Commission advance notice of any aid scheme or amendment of an existing scheme, any decision to apply an aid scheme to an undertaking or any individual application of aid schemes;
  • obligation on Member States to provide the Commission with various reports on aid, on the basis of which the Commission draws up an annual overall report to serve as a basis for discussion with national experts.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Regulation (EC) No 3094/95 31.12.1995 – OJ L 332 of 30.12.1995
Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 2600/97 23.12.1997 – L 351 of 23.12.1997

Related Acts

Seventh Commission report to the Council on the situation in world shipbuilding [COM (2003) 232 final – Not published in the Official Journal].

The countries or regions with the largest market shares in this sector are Japan, South Korea, China and the European Union. The sector is currently reeling from a deep crisis caused by three factors: past over-ordering, the global economic slowdown – and particularly the US slowdown – and the repercussions of September 11.

Order intake worldwide fell by 12.3% from 2001 to 2002, following a decrease of 20.7% between 2000 and 2001. European shipyards have, however, been the worst affected by this slump, with orders generally down 50% on 2001 and by over 70% compared to 2000. The hardest hit vessels are container ships and cruise ships. Only oil product tankers and bulk carriers have seen increased ordering, due to the replacement of old tonnage following new European Union maritime safety regulations and strong domestic demand in the Far East.

The main shipbuilding regions have, however, been affected in different ways: Japanese yards have the advantage of strong domestic demand, especially for bulk carriers; South Korea and China are battling for tanker contracts; and the European Union is only really active in the ferries and small tankers segment, where replacement needs are building up, although it is possible that Korean shipbuilders might try to further penetrate this market segment.

Prices: the statistics show that some categories of vessel are particularly affected by a major drop in market prices. Large container ships have seen their sales prices fall as a result of excessive price-cutting by Korean yards. The trend has been such that production costs have not always been covered. This is all the more surprising as the current weakness of the US dollar against the euro, won and yen should have led to an across-the-board increase in US dollar prices. Studies have also been carried out to investigate the relationship between the normal price, which is the full cost of production plus a profit margin of 5%, and the actual contract price charged by certain Korean shipyards. Given that production costs have risen in recent years, the gap between contract prices and normal prices has widened further. The studies are based on an analysis of several Korean yards and have revealed that the difference between the normal price and the contract price ranges from between -1% and -39%. All these results indicate a clear trend: Korean shipyards are trying to grab every order that appears in the market no matter the cost, despite assertions made to the contrary by the management of the different Korean groups. This strategy could be damaging if Korean yards fail to take certain factors into consideration, such as inflation and debt servicing, and major financial difficulties could ensue in the short term.

Sixth Commission report to the Council on the situation in world shipbuilding [COM (2002) 622 final – Not published in the Official Journal].

Following the breakdown of two rounds of talks conducted by the Commission (26-27 August 2002 in Seoul and 24-27 September 2002 in Brussels) the Commission had no choice but to initiate proceedings with the World Trade Organisation (WTO) and to start bilateral consultations with the Republic of Korea. At the same time a temporary defensive mechanism was authorised for certain market segments and for a limited period only.

The crisis in world shipbuilding is deepening with very slow order intake in the major shipbuilding regions in the first six months of 2002. The main reasons are past over-supply, slowing economies around the world and the effects of 11 September. Only Japanese yards still manage to fill building slots. However, this is helped a lot by domestic demand, in particular for bulk carriers, as has been long-standing practice in this region.

World-wide ordering of new ships in the first half of 2002 was down by almost two thirds compared to average quarterly figures in 2000, which was admittedly the best year ever for shipbuilding. In the EU the situation is even worse, with ordering down by almost 80% compared to 2000. Prices for new ships have declined further and are now at the lowest level for more than a decade. Yards in South Korea have further lowered offer prices despite increases in all major cost factors, and a number of Korean yards may find it difficult to meet their financial obligations if order intake is not increased soon.

Fifth Commission report to the Council on the situation in world shipbuilding [COM (2002) 205 final – Not published in the Official Journal].

The world shipbuilding market continues to face serious difficulties due to a substantial imbalance of supply and demand. Past expansion of shipyards, mainly in Korea, but now increasingly also in China, has led to price depression. Thanks to a historically high level of ordering in 2000, prices recovered to some extent, but the significant drop in orders in 2001 has led to a new reduction in prices. The year 2001 has been very problematic for the maritime industries worldwide: the recession in the United States and the terrorist attacks of 11 September have reduced the demand for sea trade and cruises respectively. The decline in ordering affected the container ship and cruise ship sectors most, leading to a drop in overall market shares for Korea and the EU, which are particularly strong in these segments.

The detailed cost investigations undertaken by the Commission show that certain Korean yards continue to price ships below cost while others are trying to improve their bottom line. Despite various rounds of talks with Korea, the Commission did not manage to convince the Korean authorities and yards to fully implement market principles and allow a shake-out of non-viable companies. An improvement in the market situation is therefore unlikely and the Commission has consequently proposed counter-measures to the Council, including preparing the ground for requesting a dispute settlement at the World Trade Organisation and the introduction of a temporary defensive mechanism for shipbuilding.

Fourth Commission report to the Council on the situation in world shipbuilding [COM (2001) 219 final – Not published in the Official Journal].

The year 2000 has seen a significant expansion in orders for new ships. Nearly 56% more orders were placed as compared to 1999, primarily benefiting South Korean shipyards, which have seen their market share increase again. EU yards also benefited considerably from the higher demand for ships, although orders for cruise ships probably played a dominant role here. In 2000 South Korea has consolidated its dominant position on the world shipbuilding market, accounting for more than 35 % of all tonnage ordered worldwide. If cruise ship orders are included, the market share for the EU and Norway is around 18 % (in cgt). However, if they are excluded from the overall figures, the market share of EU yards for new orders in 2000 is below 10 %. In 2000 prices for new ships are reported to have recovered in certain market segments from the very low levels seen after the Asian crisis in 1997.

Third Commission report on the situation in world shipbuilding [COM (2000) 730 final – Not published in the Official Journal].

In this report the Commission confirms the general trend highlighted in the second report of 18 May 2000, namely that, despite increased orders, ship prices have not on the whole recovered the ground lost since 1997. Prices continue to be depressed owing to the very low offer prices from yards in South Korea, which is now the biggest shipbuilding country in the world. Over the first eight months of 2000, its shipyards took more than 40% of all new orders. The Commission considers the stagnation in prices to be all the more alarming in that the European Union has drastically cut back state aid to shipbuilding. Despite the signing of the Agreed Minutes in June 2000 aimed at obtaining from South Korea firm commitments on non-intervention in the financing of shipbuilding, bilateral talks ended in failure. The Commission thus plans to:

  • continue its monitoring of the market situation;
  • examine the European industry’s complaint of October 2000 against Korean dumping, in order to deal with this problem under WTO rules;
  • remain open, at the same time, to any Korean proposals;
  • continue efforts to re-establish fair competition at international level;
  • encourage the International Monetary Fund to ensure that the restructuring of Korean shipyards is closely monitored;
  • continue to cooperate with the industry on competitiveness issues;
  • examine with the Council any possible action to address the problem.

Second Commission report on the situation in world shipbuilding [COM (2000) 263 final – Not published in the Official Journal].

The report takes stock of the world shipbuilding market. The market is in crisis, with supply outstripping demand. Vessel prices are falling in the face of unbeatable competition from Korean yards, which are prepared to sell at a loss in order to ensure market share and cash flow. To address the problem, the European Commission obtained an agreement from the Korean authorities to restrict State financial intervention in the shipbuilding industry. The Commission also gathered evidence pointing to unfair competition, and a complaint may be filed under the Trade Barriers Regulation.

First Commission report on the situation in world shipbuilding [COM (1999) 474 final – Not published in the Official Journal].

The report describes overcapacity on the shipbuilding market, with a marked imbalance between supply and demand caused mainly by South Korea’s increased capacity. Vessel prices were between 15 and 30% down on 1998 levels, stimulating demand and increasing the Korean yards’ market share. There were reasons to believe that Korean yards were offering vessels at below-retail rates.

Council Regulation (EC) No 1177/2002 of 27 June 2002 concerning a temporary defensive mechanism to shipbuilding [Official Journal No L 172 of 2.7.2002].

The commitments contained in the Agreed Minutes signed by the European Commission and the Government of the Republic of Korea on 22 June 2000 with a view to ensuring an effective price surveillance mechanism have not been effectively implemented by the Korean side and therefore a satisfactory result has not been obtained.

Consequently, despite the ban imposed by Council Regulation (EC) No 1540/98, the 2002 Regulation introduces a temporary defensive mechanism applicable to certain segments of the market (namely container ships and product and chemical tankers) for a short and limited period authorising support of 6% of contract value before aid. The aim is to enable Community shipyards to overcome unfair Korean competition. This Regulation expires on 31 March 2004.

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

Another Normative about State aid to shipbuilding

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic

Competition > Rules applicable to specific sectors > Competition in transport

State aid to shipbuilding (II)

To remove the differences between the rules applicable to the shipbuilding industry and to those applicable to other industrial sectors.

2) Document or Iniciative

Framework on state aid to shipbuilding [Official Journal C 317 of 30.12.2003].

3) Summary

Background

Since the early 1970s, state aid to shipbuilding has been subject to a series of specific Community regimes. This framework, which replaces Council Regulation (EC) No 1540/98, is designed to remove the differences between the rules applicable to the shipbuilding industry and those applicable to other industrial sectors. However, it takes account of specific factors affecting the shipbuilding sector, namely:

  • the nature of the world shipbuilding market (overcapacity, depressed prices, etc.);
  • the nature of ships as very large capital goods in respect of credit facilities;
  • the difficulty of applying the World Trade Organisation (WTO) rules on unfair trading practices to the shipbuilding sector;
  • the existence of agreements within the Organisation for Economic coordination and development (OECD) in the shipbuilding sector; this mainly concerns the 1994 Agreement on respecting normal competitive conditions in the shipbuilding and repair industry, which has not entered into force and which the OECD is in the process of replacing.

Definitions

For the purposes of this Framework, the following definitions shall apply:

  • shipbuilding: the building of self-propelled seagoing commercial vessels;
  • ship repair: the repair or reconditioning of self-propelled seagoing commercial vessels;
  • ship conversion: the conversion of self-propelled seagoing commercial vessels of not less than 1 000 gt, on condition that conversion operations entail radical alterations to the cargo plan, the shell, the propulsion system or the passenger accommodation;
  • self-propelled seagoing commercial vessels, including:

– vessels of not less than 100 gt used for the transportation of passengers and/or goods;
– vessels of not less than 100 gt for the performance of a specialised service (for example, dredgers and ice breakers);
– tugs of not less than 365 kW;
– fishing vessels of not less than 100 gt;
– unfinished shells of vessels.

Scope

Aid to shipbuilding includes aid to any shipyard, related entity, shipowner or third party which is granted, whether directly or indirectly, for the building, repair or conversion of ships.

The Framework provides for special measures in relation to investment aid for innovation, closure aid, export credits, development aid and regional aid.

Research, development and innovation aid

Aid granted to defray expenditure by shipbuilding, ship repair or ship conversion firms on R&D projects may be considered compatible with the common market if it complies with the rules laid down in the Community framework for state aid for research and development.

Aid granted for innovation in existing shipbuilding, ship repair or ship conversion yards may be deemed compatible with the common market up to a maximum aid intensity of 20% gross, provided that it contributes to the search for innovative products and processes.

Closure aid

Aid to defray the costs resulting from the total or partial closure of shipbuilding, ship repair or ship conversion yards may be considered compatible with the common market provided that the resulting capacity reduction is of a genuine and irreversible nature.

The costs eligible for aid are:

  • payments to workers made redundant or retired before the legal retirement age;
  • the costs of counselling services to workers made or to be made redundant or retired;
  • payments to workers for vocational retraining;
  • expenditure incurred for the redevelopment of the yard, its buildings, installations and infrastructure for use other than shipbuilding.

Companies receiving partial closure aid must not have benefited from rescue and restructuring aid in the past ten years. For further information, see the Community guidelines on state aid for rescuing and restructuring firms in difficulty.

Employment aid

Aid granted for the creation of employment, the recruitment of disadvantaged and disabled workers or to cover the additional costs of employing disadvantaged and disabled workers in shipbuilding, ship repair or ship conversion firms may be considered compatible if it complies with the substantive rules laid down in Commission Regulation (EC) No 2204/2002.

Development aid and export credits

Aid to shipbuilding in the form of development aid or export credits may be considered compatible with the common market if it complies with the terms of the 1998 OECD Arrangement on Guidelines for Officially Supported Export Credits and with its Sector Understanding on Export Credits for Ships.

Regional aid

Regional aid to shipbuilding, ship repair or ship conversion may be considered compatible with the common market on condition that it fulfils the following conditions:

  • aid must be granted for investment in upgrading or modernising installations with a view to improving productivity and must not be linked to financial restructuring of the yards concerned;
  • in the regions referred to in Article 87(3)(a) of the EC Treaty and in compliance with the regional aid map, the intensity of the aid must not exceed 22.5%;
  • in the regions referred to in Article 87(3)(c) of the EC Treaty and in compliance with the regional aid map, the intensity of the aid must not exceed 12.5 % or the applicable regional aid ceiling, whichever is the lower.

Aid must cover eligible expenditure as defined in the Community guidelines on regional aid.

Member States are required to submit annual reports to the Commission on all existing aid schemes. This Framework will be applicable from 1 January 2004 until 31 December 2006 at the latest. It may be reviewed by the Commission during this period, in particular in the light of the Community’s international obligations.

4) Implementing Measures

5) Follow-Up Work

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

Strategy for cooperation with the Philippines

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Strategy for cooperation with the Philippines

Outline of the Community (European Union) legislation about Strategy for cooperation with the Philippines

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External relations > Relations with third countries > Asia

Strategy for cooperation with the Philippines (2007-2013)

Document or Iniciative

The European Commission – Philippines Strategy Paper 2007-2013 .

Summary

The partnership between the European Union (EU) and the Philippines is focused on reducing poverty and the equitable distribution of wealth. Although the country has reached an intermediate level of development, a large proportion of its population lives below the poverty threshold. This situation is partly explained by a high level of demographic growth and a low level of economic growth.

Areas for cooperation

This Strategy should be implemented according to priority actions in order to:

  • develop a policy to reduce poverty and meet the Millennium Development Goals (MDGs);
  • promote economic reforms and good public governance;
  • organise basic social services, in particular to improve access to health care and education.

Furthermore, the partnership should stimulate trade and investment, and reinforce the positive impact of commercial growth on the country’s level of development.

Cross-cutting issues

Generally, cooperation actions should improve governance and human rights, gender equality, the rights of children and minorities, as well as the protection of the environment, conflict prevention and the stability of the country.

Thematic regional programmes

The Philippines participate in several regional cooperation schemes, such as the Association of South-East Asian Nations (ASEAN), Asia-Pacific Economic Cooperation (APEC) and the Asia-Europe Meeting (ASEM) for policy dialogue.

These bodies provide a framework for cooperation and dialogue as regards democracy and human rights, migration, the environment, social policy and exchanges between universities.

Strategy for cooperation with Vietnam

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Strategy for cooperation with Vietnam

Outline of the Community (European Union) legislation about Strategy for cooperation with Vietnam

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External relations > Relations with third countries > Asia

Strategy for cooperation with Vietnam (2007-2013)

Document or Iniciative

The European Commission – Vietnam Strategy Paper 2007-2013 .

Summary

Cooperation between the European Union (EU) and Vietnam aims primarily to reduce the level of poverty in the country. This aim is pursued in line with Vietnam’s socio-economic development plan and the Millennium Development Goals (MDGs).

Cooperation priorities

This strategy identifies a limited number of areas for cooperation, in order to enhance the effectiveness of development aid. Cooperation actions are mainly financed through the instrument for development cooperation (DCI). They are aimed at supporting:

  • socio-economic development, particularly the reform of public policies and the increase of financial resources, including by mobilising international donors;
  • the health sector, especially to improve access to care, the development of infrastructure and to extend the coverage of social protection to the whole population.

Furthermore, the EU supports the development of trade with Vietnam, to help the country to maximise its international trade development and exploit its membership of the World Trade Organization (WTO). Cooperation should contribute to the development of trade policies, and the legal framework applicable to workers, enterprises, investment and exports.

The increase in trade should have a positive impact on reducing poverty and the sustainable development of the country.

Policy dialogue

The partners are undertaking a strategic dialogue, in particular with a view to strengthening public institutions, public administration, good governance and human rights.

In addition, a set of thematic objectives supplements these priorities. They can be implemented through the European Instrument for Stability. The objectives are as follows:

  • democracy and human rights;
  • the development of civil society;
  • migration and asylum policy;
  • human and social development;
  • environmental protection and sustainable resource management;
  • higher education.

Cross-cutting issues

Cooperation actions should have a positive impact on gender equality, the fight against HIV/AIDS, environmental protection, democracy, good governance and human rights.

Context

In 2007, Vietnam and the EU launched negotiations with a view to intensifying their relations by adopting a Partnership and Cooperation Agreement.

EU-India Strategic Partnership

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EU-India Strategic Partnership

Outline of the Community (European Union) legislation about EU-India Strategic Partnership

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External relations > Relations with third countries > Asia

EU-India Strategic Partnership

Document or Iniciative

Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee of 16 June 2004: An EU-India Strategic Partnership [COM(2004) 430) final – Not published in the Official Journal].

Summary

The EU and India already enjoy a close relationship based on shared values and mutual respect. In recent years, the relationship has developed exponentially in terms of shared vision, goals and challenges. Against this background the Commission proposes a new strategy based on the following objectives:

  • international cooperation through multilateralism, including promoting peace, combating terrorism, non-proliferation of weapons of mass destruction and human rights;
  • enhanced commercial and economic interaction, in particular through sectoral dialogue and dialogue on regulatory and industrial policy;
  • cooperation on sustainable development, protecting the environment, mitigating climate change and combating poverty;
  • continuous improvement of mutual understanding and contacts between the EU’s and India’s civil society.

International cooperation

Since the EU and India are seen as forces for global stability, the focus of relations has shifted from trade to wider political issues. The Commission proposes a strategic alliance to enhance relations with India and promote an effective multilateral approach.

India is an important partner in conflict prevention. The EU should therefore explore means of formalising regular cooperation with India in this area. The Commission wishes to step up political dialogue on non-proliferation of weapons of mass destruction and proposes setting up dialogue on export control measures.

Real cooperation should be established on combating terrorism and organised crime.

The EU is strongly committed to peace and stability in South Asia and encourages dialogue between India and Pakistan.

Economic partnership

The EU is India’s largest trading partner and main source of foreign inward investment, whereas India is only the EU’s 14th trading partner. India needs to further open up its market and accelerate market reform to realise the potential of its market. It must address such matters as customs tariffs and the many non-tariff trade barriers, as well as considerably improving its infrastructure.

The strategic dialogue should address regulatory and industrial policy to improve business competitiveness on both sides. India and the EU should also promote cooperation on the world’s major environmental challenges such as biodiversity, climate change and the depletion of the ozone layer.

In many areas, dialogue with India has already made considerable progress. Strategic sectoral dialogues should be developed in the following areas:

  • the information society;
  • transport;
  • energy;
  • biotechnology;
  • the Galileo programme (the European global satellite navigation system);
  • a space partnership.

The EU and India must start dialogue on investment, intellectual property rights and trade defence instruments. The EU has an interest in enhancing cooperation with India on technical barriers to trade and sanitary and phytosanitary issues. The EU-India customs cooperation agreement should also be exploited and sustainable development and South Asian regional cooperation should be promoted.

There is enormous potential for EU-India collaboration in science and technology. Indian researchers should be encouraged to participate in the EU’s 6th Framework Programme.

The EU should invite India to regularly attend ministerial level consultations on subjects of mutual interest in the field of monetary and financial policy.

Development cooperation

The EU must help India to meet the Millennium Development Goals (MDG). Coordination with other EU donors needs to be improved. The EU could also share its experience of social security systems.

Mutual understanding

The European and Indian Parliaments are considering organising regular, institutionalised parliamentary exchanges. In terms of culture, cooperation in all disciplines should be reinforced. All Member States and institutions should cooperate and coordinate their activities to inform Indian public opinion. The Government of India should be encouraged to visit EU institutions as often as possible and devise its own communications strategy.

Institutional architecture

EU-Indian partnership is based on the 1994 Cooperation Agreement and the Joint Political Declaration of 1993. The first Lisbon summit of 2000 was also key to the development of bilateral relations. The Commission proposes a number of initiatives to streamline the structure of the partnership.

Implementation and follow-up

The Commission hopes that this Communication will be a starting point for collective reflection on how to improve EU-India relations. The proposals emerging from such reflection could serve as the basis for an action plan and a new EU-Indian joint political declaration. Both could be endorsed at the Sixth EU-India Summit in 2005.

Context

India is an increasingly important international player and regional power with an impressive economic growth rate. Since the first EU-India summit held in Lisbon in 2000, EU relations with India have progressed in political, geopolitical, economic and trade terms.

Related Acts

Joint Action Plan adopted at the Sixth EU-India Summit at Delhi, 7 September 2005.

The current Joint Action Plan should be seen in the context of the 2004 Hague Summit. Its primary objective is to develop EU-India relations in the context of a strategic partnership. Its specific aim is to encourage the EU and India to:

  • consolidate their mechanisms for dialogue and consultation mechanisms;
  • deepen dialogue and cooperation on political and economic matters;
  • develop trade and investments;
  • improve relations between their peoples and cultures.

Joint Press Statement from the Fifth India-EU Summit (FR ) at The Hague, 8 November 2004.

The Indian and European authorities highlight the progress made in strengthening EU-Indian relations, in particular after the 2004 communication on the EU-Indian strategic partnership, followed by the Council’s conclusions of 11 October 2004. They also reiterate that their partnership is based on a solid foundation of shared values and convictions and their commitment to democracy, pluralism, the rule of law and multilateralism in international relations, which contribute stability and peace in the world. Finally, they wish to strengthen their partnership through more intensive dialogue.

EU Strategy for Africa

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EU Strategy for Africa

Outline of the Community (European Union) legislation about EU Strategy for Africa

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > African Caribbean and Pacific states (ACP)

EU Strategy for Africa

Document or Iniciative

Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee of 12 October 2005 – EU Strategy for Europe: Towards a Euro-African pact to accelerate Africa’s development [COM(2005) 489 final – Not published in the Official Journal].

Summary

The EU Strategy for Africa outlines a framework of action for all EU Member States aimed at supporting Africa’s efforts to achieve the Millennium Development Goals (MDGs). In recent years considerable progress has been recorded in Africa, particularly as regards governance and economic growth. The African Union (AU), the New Partnership for Africa’s Development (NEPAD) and international organisations have equipped Africa with political and economic roadmaps and a vision for the future. Nevertheless, Africa’s road towards sustainable development remains long.

A very diverse reality

Africa comprises different political regimes, historical experience and cultural, religious, economic and geographical contexts. Furthermore, areas of insecurity and centres of stability coexist. Some African countries have experienced, or are experiencing, sustained periods of peace, security, economic and political stability and democratic participation, while others remain mired in long-term conflict. Heightened instability is linked to a rise in transnational organised crime, resulting in an increased threat of drugs trafficking and consumption, human trafficking, smuggling of natural resources and arms trafficking.

Nevertheless, there is no shortage of growth factors. Sustainable exploitation of natural resources, agricultural development and investment in human resources create a sound investment climate. A number of African countries possess considerable natural resources which permit genuine sustainable development. Commodity-dependent African economies can reduce their vulnerability by acting against the long-term downward trend in prices and against fluctuations in world prices.

A fundamental driver of growth is a reliable and attractive investment climate. A country’s stability and level of governance, transparency, dialogue with the national and international business community, and regional integration are all contributing factors in economic development. New external players, such as Brazil, India and China, are increasingly attracted by Africa’s economic potential, while Africa’s longer-established partners, such as the United States, Japan and Russia, are showing renewed interest in the continent.

In these regions, interconnection is crucial to allowing people easier market access and reducing the costs of doing business. A regional integration process must therefore be developed to strengthen Africa’s position in the world economy.

Social dynamics

Human development also presents a highly varied picture. While several African countries have recorded impressive economic growth, a highly unequal distribution of income often prevents this growth from having a positive impact on poverty levels.

Job creation remains one of the major challenges for poverty reduction and social development, in particular for women and ethnic minorities. The employment situation is closely linked to literacy rates, which are gradually improving. Individuals’ well-being is also dependent on health and hygiene conditions. In particular, the HIV/AIDS pandemic is a heavy burden on many African countries.

Environmental dynamics

The African continent is environmentally very diverse. Climate change will further increase the strain on water resources, affect biodiversity and human health, worsen food security and increase desertification. Flooding and drought are common and are set to increase as a result of climate change, while early-warning systems are inadequate and disaster management is weak. Climate change adaptation is therefore an urgent necessity for Africa’s development.

The desertification process affects almost half of the African continent, the worst-affected areas being located along desert margins. Furthermore, Africa’s renewable water resources fall below the world average and several countries suffer water stress or scarcity. Africa also has 17% of the world’s forests, and deforestation, both for commercial timber and to make room for agriculture, is therefore a major concern.

The principles of the EU-Africa relations

Over the last few decades, the EU has concluded an increasing number of agreements with Africa, including the Lomé Conventions, entered into with the Member States of the African, Caribbean and Pacific Countries (ACP) Group and since replaced by the 2000 Cotonou Agreement, the South Africa Agreements and the Euro-Mediterranean Partnership and Association Agreement.

So now is the time to develop the basic principles that govern the relationship between Africa and the EU. This Communication envisages three principles:

  • equality, based on mutual recognition and respect for institutions and the definition of mutual collective interests;
  • partnership, i.e. developing links based on political and commercial cooperation;
  • ownership, i.e. strategies and development policies being country-owned and not imposed from the outside.

The EU should engage with Africa’s three levels of governance – national, regional and continental – on the basis of the principle of subsidiarity: only matters which would be dealt with less effectively at a lower level should be reserved for a higher level of governance. The EU should enhance intra-African solidarity between these three levels and raise dialogue with the African continent as a whole to the highest political level.

The EU’s response strategy

The EU should strengthen its support in the areas considered prerequisites for attaining the MDGs (peace, security, good governance), areas that create a favourable economic environment for growth, trade and interconnection and areas targeting social cohesion and environment.

The EU will step up its efforts to foster peace and security by means of a wide range of actions, ranging from the support for African peace operations to a comprehensive approach to conflict prevention addressing the root causes of violent conflict. These actions also target cooperation in the fight against terrorism and the non-proliferation of weapons of mass destruction, as well as support for regional and national strategies for disarmament, demobilisation, reintegration and reinsertion in order to contribute to the reintegration of ex?combatants – including child soldiers – and stabilisation of post-conflict situations.

Despite the progress made in Africa, the road towards good governance remains long. With a view to reforming the State, the EU will work towards building effective and credible central institutions, to which end it will define a Governance Initiative in support of the African Peer Review Mechanism. It will reinforce respect for human rights and democracy, develop local capacity and encourage the decentralisation process, with the aim of promoting democracy and development. It will also encourage African countries to sign and implement the main international instruments of crime prevention.

In order to contribute to the effective reduction of poverty across Africa, the EU will stimulate rapid and broad-based economic growth by supporting macroeconomic stability and assisting in the creation of integrated regional markets. Limited access to transport and communication services, water and sanitation, and energy constrains economic growth. The Commission therefore proposes to establish an EU-Africa Partnership for Infrastructure. Transport policies must also be harmonised through support to the Sub-Saharan Africa Transport Programme and the energy infrastructure must be developed along with integrated water management for its improvement in trans-boundary river basins.

When we consider that 40% of all Africans survive on less than one dollar a day, the EU must contribute to the establishment of social safety for the most vulnerable. In this context, it will support education, access to knowledge and transfer of know-how as a lifelong process going beyond primary education, and promote access to water supply, sanitation and energy, as well as the improvement of health infrastructures and the provision of essential health services.

Particular attention will be paid to employment policies, the promotion of cultural diversity and turning migration into a positive force in the development process.

As regards the environment, the EU’s activities will include the management of environmental diversity, the improvement of sustainable land management to halt desertification, the conservation of biodiversity, limitation of the effects of climate change and support for the sound management of chemicals.

Despite being the main donor to Africa, the EU should increase its financing substantially. In June 2005 the EU committed itself collectively to increase official aid to 0.56% of gross national income (GNI) by 2010 and to 0.7% by 2015. In particular, some €4 billion will be available annually for Sub-Saharan Africa and this Strategy for Africa should constitute the reference framework for the programmes and action under the 10th European Development Fund (EDF).

This Strategy was adopted by the European Council of 15 and 16 December 2005.

Related Acts

Communication from the Commission to the European Parliament and the Council – From Cairo to Lisbon – The EU-Africa Strategic Partnership [COM(2007) 357 final – Not published in the Official Journal].

Overseas countries and territories : towards a new partnership

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Overseas countries and territories : towards a new partnership

Outline of the Community (European Union) legislation about Overseas countries and territories : towards a new partnership

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > Overseas countries and territories (OCT)

Overseas countries and territories (OCTs): towards a new partnership

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 6 November 2009 – Elements for a new partnership between the EU and the overseas countries and territories (OCTs) [COM(2009) 623 final – Not published in the Official Journal].

Summary

Relations between the European Union (EU) and Overseas Countries and Territories (OCTs) should evolve into a reciprocal partnership, founded on mutual interests. These relations are currently defined by the framework for association established by Decision 2001/822/EC.

This Communication presents a new approach aimed at supporting the sustainable development of OCTs by adapting the cooperation principles and priorities to the specificities of these countries and territories. In addition, if their level of development is generally higher than that of African, Caribbean and Pacific (ACP) states, certain OCTs shall continue to benefit from European aid to fight against poverty.

Supporting sustainable development

The future partnership, based on Article 198 of the Treaty on the Functioning of the EU, should prioritise three axes of cooperation:

  • the competitiveness of OCTs in key areas such as education and training, innovation, the small and medium-sized enterprises sector, and good political and economic governance;
  • reducing their vulnerability to economic shocks, environmental issues, energy dependency and natural disasters;
  • regional integration through increasing intra-regional economic exchanges, carrying out cooperation projects (specifically for cross-border environmental protection) and increasing cultural exchanges.

Cooperation should be tailored to the situation of each partner.

European financial and technical assistance shall be improved, specifically by coordinating financial instruments with those for the Outermost Regions, ACP states or other countries neighbouring the OCTs.

OCTs may participate in certain Community programmes (such as the 7th Research Framework Programme). The programmes must therefore be adapted to the new priorities.

Cooperation priorities

The Commission has identified a set of areas for cooperation which should enable the potential of OCTs to be developed. They involve:

  • establishing centres of excellence and expertise to manage the advantages and difficulties of each territory;
  • upgrading OCT legislation to EU rules and standards, specifically to encourage the trade of goods and services (for example by bringing customs procedures and sanitary and phytosanitary standards closer together) and compliance with the principles of transparency on tax;
  • developing environmental cooperation to support the transition of OCTs to a greener economy, and helping them adapt to climate change, biodiversity protection, the promotion of renewable energies and disaster risk reduction;
  • improving the OCTs’ accessibility by developing information and communication technologies and transport infrastructures;
  • increasing trade and economic cooperation in terms of international trade liberalisation, which entails reciprocal trade relationships and specific rules of origin.

Background

The Communication follows the Green Paper on future relations between the EU and OCTs. The conclusions of the Green Paper support the revision of the existing framework for association.

Budgetisation of the European Development Fund

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Budgetisation of the European Development Fund

Outline of the Community (European Union) legislation about Budgetisation of the European Development Fund

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > African Caribbean and Pacific states (ACP)

Budgetisation of the European Development Fund

Document or Iniciative

Communication from the Commission to the Council and the European Parliament of 8 October 2003: “Towards the full integration of cooperation with ACP countries in the EU budget” [COM(2003) 590 final – not published in the Official Journal].

Summary

In this communication, the Commission recommends the incorporation into the EU budget of the aid granted to the ACP and OCT countries under the European Development Fund (EDF).

A POLITICALLY DESIRABLE CHANGE

Countering the risks of marginalisation

With the extension of the external relations of the Union, the conclusion of cooperation agreements with numerous other regions and the increase in the amounts earmarked for external aid in the budget, separate financing for the ACP countries is no longer a privilege, rather the opposite.

These cooperation agreements with numerous regions around the world, like the Cotonou Agreement broach a series of subjects of common interest: political dialogue, trade arrangements, democracy objectives, etc. After the integration of the EDF into the budget, all the major geographical programmes will be part of the structure of the budget. From a technical point of view, that will permit increased synergy between the programmes centred around the national/geographical approach and those that pursue thematic objectives.

The cooperation programmes with the ACP countries have created a wealth of experience and good practice that is worthy of application to other programmes pursued in other developing regions. The incorporation of the EDF will facilitate the mutual enrichment of the different programmes.

The incorporation of the EDF into the budget will also facilitate cooperation between the regions of Africa. A similar gain in coherence could be brought about for Caribbean countries in relation to Latin America and for the Pacific group in relation to Asia.

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Towards greater independence

With the budgetisation of the EDF, the financing of EU-ACP cooperation would gain independence from voluntary contributions determined as a result of national viewpoints and would present better prospects for continuity. For Member States, that would signify that financial cooperation with the ACP was genuinely placed at the EU level.

Towards stronger legitimacy

The EDF is currently the only expenditure that is not subject to authorisation by the European Parliament. Incorporating the EDF into the budget would put an end to this anomaly, thereby strengthening the public legitimacy of the EU’s external assistance. Not being part of the budget, cooperation with the ACP countries is clearly excluded from one of the most important political decision-making processes of the Union. The already significant risk that relations with the ACP countries are marginalised in comparison with other economically more advanced regions of the world is exacerbated by their lack of visibility in the political arenas of the Union. Furthermore, the influence of the ACP-EU Joint Parliamentary Assembly will be enhanced through its members in the European Parliament.

Towards greater transparency

A single budget including all external aid expenditures offers the possibility of providing a global picture of the EU’s external assistance and of EU development policy, in terms of both size and geographical distribution. Citizens will have to refer only to a single document in future when they want to know what the EC spends on development policy.

Towards greater efficiency and effectiveness

The integration of the EDF into the budget will lead to greater cost effectiveness. The unification of administrative and legal rules, decision-making structures, and commitment and payment procedures will remove a certain amount of duplication which is currently imposed on the different operators and stakeholders. It will help simplify reporting requirements, reduce the administrative burden on beneficiary countries and respond in a more efficient manner to the challenges faced by developing countries. The management principles applicable to the budget will also make the pattern of commitments more regular and help improve the delivery of aid to the ACP.

CONCERNS LINKED TO BUDGETISATION

Will the quality of the partnership with ACP countries be maintained?

Yes. In the Commission’s view, the European Development Fund is a historical, not a substantive element in the privileged relations between the ACP and the EU. The Cotonou Agreement remains the cornerstone of this partnership and will continue to govern EU-ACP relations as in the past.

Commitments to individual ACP countries will continue to be made on the basis of programmes prepared and approved with them. In every country, the government will continue to be closely associated with multiannual indicative programming, the preparation of annual action plans, etc.

Will budgetisation challenge the financial commitment of the EU to the ACP?

This financial commitment must be renewed every five years, either through a new EDF within the framework of the general budget. The instruments currently available in the budgetary framework, and more particularly the decisions on the financial perspectives, offer the same guarantees.

Background

There are currently two main channels of EU assistance to the ACP countries: funds from the EU budget and funds from the EDF. Different administrative rules and decision-making structures apply to these two forms of aid. Funds from the EU budget are administered in accordance with the general Financial Regulation. Funds from the EDF meanwhile are administered according to the rules laid down by the Cotonou Agreement.

The proposal to incorporate the EDF into the budget would mean that the new financial perspectives could include the totality of expenditure for EU-ACP cooperation. This is not a new proposal: the Commission had previously proposed the integration of the EDF in the Community general budget in 1973 and 1979. During the negotiations on the 2007-2013 financial perspectives, the Commission revived the proposal, but it was once again rejected by the European Council (15-16 December 2005). The debate is likely to be reopened when the next financial perspectives are prepared.

Future relations between the EU and Overseas Countries and Territories

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Future relations between the EU and Overseas Countries and Territories

Outline of the Community (European Union) legislation about Future relations between the EU and Overseas Countries and Territories

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > Overseas countries and territories (OCT)

Future relations between the EU and Overseas Countries and Territories (OCTs)

Document or Iniciative

European Commission Green Paper of 25 June 2008 on future relations between the EU and the overseas countries and territories [COM(2008) 383 Final – Not published in the Official Journal].

Summary

The arrangements for association of the overseas countries and territories (OCTs) with the European Community (EC) were established by Council Decision 2001/822/EC, in accordance with Part IV of the European Community Treaty.

The Green Paper should serve as a basis for the development of future relations between the OCTs and the EU. It presents an assessment of the needs and economic, social and cultural development potential of the OCTs.

A new development strategy

The OCTs have specific characteristics in common. They are not part of the Community, however they are constitutionally linked to EU Member States. The majority of them are located in the African, Caribbean and Pacific States (ACP), but their level of development is higher than that of their neighbours. However, the micro-island character of their economies makes them dependent on importing goods and energy. These factors make them particularly vulnerable to international economic shocks.

By following a new approach, relations between the EU and OCTs could be better differentiated from Community development cooperation policy.

The implementation of a sustainable development strategy for OCTs could support their competitiveness, as well as stimulate economic and social exchanges on a regional and global level. The Green Paper underlines the specific importance of exchange between the OCTs, and between the OCTs and the ACP States.

A renewed partnership with the EU could have reciprocal institutional, economic, social and cultural advantages, as well as benefits in the fields of security and environmental protection. Cooperation could prove essential in tackling climate change and biodiversity protection.

Trade regimes

The OCTs and the EU have close economic relations. The OCT-EC trade regime consists of a non-reciprocal preferential trade regime, established in accordance with tariff conditions which are amongst the most generous that have been granted by the Community. However, in view of progressive global and regional trade liberalisation, a reform of the system proves necessary.

Furthermore, in order to maximise the potential of the preferential regime, the rules of origin and cumulation of origin should be modernised. The OCTs should also improve their ability to comply with Community export standards.

Context

Due to Decision 2001/822/EC expiring at the end of 2013, there will be a review of the OCT-EC association before this date. The Green Paper aims to open the debate on the modernisation of OCT-EC relations, the results of which will be taken into account as part of the review. Furthermore, the funding of cooperation must also be reviewed during the negotiations on the multiannual financial framework for the period 2013 to 2020 and on the budgetisation of the European Development Fund (EDF).

Instrument for Pre-Accession Assistance

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Instrument for Pre-Accession Assistance

Outline of the Community (European Union) legislation about Instrument for Pre-Accession Assistance

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > Agriculture: enlargement

Instrument for Pre-Accession Assistance (IPA)

Document or Iniciative

Council Regulation (EC) No 1085/2006 of 17 July 2006 establishing an Instrument for Pre-Accession Assistance (IPA) [See amending act(s)].

Summary

The Instrument for Pre-Accession Assistance (IPA) is the financial instrument for the European Union (EU) pre-accession process for the period 2007-2013. Assistance is provided on the basis of the European Partnerships of the potential candidates and the Accession Partnerships of the candidate countries, which means the Western Balkan countries, Turkey and Iceland. The IPA is intended as a flexible instrument and therefore provides assistance which depends on the progress made by the beneficiary countries and their needs as shown in the Commission’s evaluations and strategy papers.

Nature of the IPA

The beneficiary countries are divided into two categories, depending on their status as either candidate countries under the accession process or potential candidates under the stabilisation and association process, namely:

  • candidate countries (Annex I to the Regulation): the former Yugoslav Republic of Macedonia, Croatia, Turkey;
  • potential candidate countries as defined at the Santa Maria da Feira European Council of 20 June 2000 (Annex II to the Regulation): Albania, Bosnia and Herzegovina, Iceland, Montenegro, Serbia including Kosovo as defined by the United Nations Security Council Resolution 1244/1999.

The annexes will be amended as and when changes in the status of the countries occur, pursuant to a Council decision adopted by qualified majority on a proposal from the Commission.

Exceptionally, and in the interests of coherence and efficiency, other countries may benefit from measures financed by the IPA. Provided these measures form part of a regional, cross-border, trans-national or worldwide framework and do not duplicate other programmes under Community external aid instruments.

The IPA was designed so as to address the needs of the beneficiary countries within the context of pre-accession policy in the most appropriate way. Its main aim is to support institution-building and the rule of law, human rights, including the fundamental freedoms, minority rights, gender equality and non-discrimination, both administrative and economic reforms, economic and social development, reconciliation and reconstruction, and regional and cross-border cooperation.

To ensure targeted, effective and coherent action, the IPA is made up of five components, each covering priorities defined according to the needs of the beneficiary countries. Two components concern all beneficiary countries:

  • the “support for transition and institution-building” component, aimed at financing capacity-building and institution-building;
  • the “cross-border cooperation” component, aimed at supporting the beneficiary countries in the area of cross-border cooperation between themselves, with the EU Member States or within the framework of cross-border or inter-regional actions.

The other three components are aimed at candidate countries only:

  • the “regional development” component, aimed at supporting the countries’ preparations for the implementation of the Community’s cohesion policy, and in particular for the European Regional Development Fund and the Cohesion Fund;
  • the “human resources development” component, which concerns preparation for participation in cohesion policy and the European Social Fund;
  • the “rural development” component, which concerns preparation for the common agricultural policy and related policies and for the European Agricultural Fund for Rural Development (EAFRD).

Candidate countries are therefore prepared for full implementation of the Community acquis at the time of accession. While potential candidates shall benefit from support to progressively align themselves to the Community acquis. Potential candidates may however benefit from similar measures as those provided under the last three components under the framework of the first component. The difference is essentially in the way these measures are implemented, since for the three components preparing for implementation of the structural and agricultural funds the beneficiary country is required to manage Community funds in a decentralised manner.

Management and implementation of the IPA

The IPA is based on strategic multi-annual planning established in accordance with the broad political guidelines set out in the Commission’s enlargement package, which now includes a Multi-annual Indicative Financial Framework (MIFF). The MIFF takes the form of a table presenting the Commission’s intentions for the allocation of funds for the three forthcoming years, broken down by beneficiary and by component, on the basis of the needs and the administrative and management capacity of the country concerned and compliance with the Copenhagen accession criteria.

The strategic planning is made up of multi-annual indicative planning documents, with the MIFF constituting the reference framework. They are established for each beneficiary country and cover the main intervention areas envisaged for that country.

As regards action on the ground, annual or multi-annual programmes (depending on the component) based on the indicative planning documents, are adopted by the Commission. They are implemented following three management methods: by centralised, decentralised or shared management.

Assistance under the IPA can take, inter alia, the following forms:

  • investment, procurement contracts or subsidies;
  • administrative cooperation, involving experts sent from the Member States;
  • participation in Community programmes or agencies;
  • measures to support the implementation process and management of the programmes;
  • budget support (granted exceptionally and subject to supervision).

The rules of participation for implementing the different programmes launched under the IPA are flexible enough to ensure that the instrument is effective. Participation in the award of procurement or grant contracts is open to all natural and legal persons and international organisations. As such, natural persons must be nationals of, or legal persons established in:

  • a Member State of the EU or the European Economic Area (EEA);
  • a country that is a beneficiary of the IPA or a country that is a beneficiary of the European Neighbourhood and Partnership Instrument (ENPI).

Moreover participation is also open to natural and legal persons from countries other than those mentioned above where these countries enjoy reciprocal access to Community external assistance. Reciprocal access is based on a country’s or regional group of countries’ status as a donor and is subject to a Commission decision adopted after consulting the IPA Committee.

All supplies and materials needed to implement such contracts must comply with the rules of origin, in other words they must originate in the EU or a country eligible under the previous paragraph. Experts are not subject to the nationality condition.

However, in exceptional cases, the Commission may depart from these rules. Moreover, operations may be co-financed by the EU and a regional organisation, a Member State or a third country (subject to reciprocity), or financed by the EU and implemented via an international organisation. In this case the natural or legal persons eligible for co-financing are also entitled to IAP financing.

The management of funds granted under this Regulation complies with the general management conditions for Community funds set out in Regulation (EC, Euratom) No 1605/2002, which the Commission is responsible for implementing (management, monitoring, evaluation, reporting). Such management must also comply strictly with the rules on the protection of the Community’s financial interests. In this context the Commission and the Court of Auditors have the power of audit over all contractors and subcontractors, on the basis of documents and on the spot, ex ante and ex post.

The Commission is also assisted by committees. The purpose of the IPA Committee set up by the Regulation is to ensure coordination and coherence between assistance granted under the different components. However, for implementing the “regional development”, “human resources development” and “rural development” components, the Commission is assisted by committees established within the framework of each structural fund.

The application of the IPA is also subject to a suspension clause, which applies to all beneficiary countries that fail to comply with the principles of democracy, the rule of law, human rights and minority rights, and the commitments contained in the partnership (accession partnership or European partnership). It also applies to countries that fail to make sufficient progress towards fulfilment of accession criteria or, for the Western Balkan countries, towards the reform process. The Council may then take appropriate measures, acting by qualified majority on a proposal from the Commission, after informing the European Parliament.

Background

This Regulation forms part of the revised external aid framework for the 2007-2013 financial perspective, in particular in terms of efficiency and coherence, while taking into account the specific features of pre-accession aid. The IPA must be consistent with development aid, but its primary aim is to prepare the beneficiary countries for accession in the not too distant future. One of the main characteristics of pre-accession aid is its bridging function, since it is designed to prepare countries for the period after accession.

The IPA therefore provides a unique and rationalised framework. As such it will replace, from 1 January 2007, the programmes for the period 2000-2006, namely:

  • the programmes for candidate countries, namely Phare, SAPARD and ISPA, Phare Cross-Border Cooperation (CBC) and Coordination, pre-accession financial assistance for Turkey;
  • the programmes for potential candidate countries, namely CARDS.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1085/2006

1.8.2006 – 31.12.2013

–

OJ L 210, 31.7.2006
Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EU) No 540/2010

14.7.2010

–

OJ L 158 of 24.6.2010

Related Acts

IMPLEMENTATION OF THE IAP

Commission Regulation (EU) No 80/2010 of 28 January 2010 amending Regulation (EC) No 718/2007 implementing Council Regulation (EC) No 1085/2006 establishing an instrument for pre-accession assistance (IPA)
This Regulation clarifies the rules on granting and evaluating pre-accession assistance. Furthermore, it establishes Community rules for the five thematic IPA components. It also includes the potential for funding granted under cross-border cooperation.

Commission Regulation (EC) No 718/2007 of 12 June 2007 implementing Council Regulation (EC) No 1085/2006 establishing an instrument for pre-accession assistance (IPA) [Official Journal L 170 of 29.6.2007].

Decision 2007/766/EC of 14 November 2007 drawing up the list of regions and areas eligible for financing under the Cross-border Cooperation Component of the Instrument for Pre-accession Assistance for the purpose of cross-border cooperation between Member States and beneficiary countries for the period 2007 to 2013 [Official Journal L 310 of 28.11.2007].

PLANNING

Communication from the Communication to the European Parliament and the Council of 12 October 2011 – Instrument for pre-accession assistance (IPA). Revised multi-annual indicative financial framework for 2012-2013 [COM(2011) 641 final – Not published in the Official Journal].

Communication from the Commission to the Council and the European Parliament of 14 October 2009 – Instrument for pre-accession assistance (IPA) – Multi-annual indicative financial framework for 2011-2013 [COM(2009) 543 final – Not published in the Official Journal].

Communication from the Commission to the Council and the European Parliament of 5 November 2008 – Instrument for pre-accession assistance (IPA) multi-annual indicative financial framework for 2010-2012 [COM(2008) 705 final – Not published in the Official Journal].

Communication from the Commission to the Council and the European Parliament – Instrument for pre-accession assistance (IPA) – Multi-annual indicative financial framework for 2009-2011 [COM(2007) 689 final – Not published in the Official Journal].

Communication from the Commission of 8 November 2006 to the Council and the European Parliament – Instrument for pre-accession assistance (IPA). Multi-annual indicative financial framework for 2008-2010 [COM(2006) 672 final – Not published in the Official Journal].

REPORT

Report from the Commission to the Council, the European Parliament and the European Economic and Social Committee of 23 December 2009 – 2008 ANNUAL Report on the implementation of the instrument for pre-accession assistance (IPA) [COM(2009) 699 final – Not published in the Official Journal].

Report from the Commission to the Council, the European Parliament and the European Economic and Social Committee of 15 December 2008 – 2007 Annual IPA Report [COM(2008) 850 final – Not published in the Official Journal].

Code of Conduct on Complementarity and the Division of Labour in Development Policy

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Code of Conduct on Complementarity and the Division of Labour in Development Policy

Outline of the Community (European Union) legislation about Code of Conduct on Complementarity and the Division of Labour in Development Policy

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Development > General development framework

Code of Conduct on Complementarity and the Division of Labour in Development Policy

Document or Iniciative

Communication from the Commission to the Council and the European Parliament of 28 February 2007 entitled “EU Code of Conduct on Division of Labour in Development Policy” [COM(2007) 72 final – Not published in the Official Journal].

Summary

The present Communication proposes a Code of Conduct to enhance complementarity and the division of labour amongst EU donors (Union and Member States) in developing countries. The Code of Conduct was adopted on 15 May 2007 by the General Affairs and External Relations Council and the representatives of the governments of the Member States meeting within the Council. On that occasion, the Council amended certain points of the Commission proposal, in particular adding an eleventh principle to the ten principles proposed.

Donors frequently concentrate on the same countries and the same sectors. This leads to a significant administrative burden and high transaction costs in the beneficiary countries, diffuses policy dialogue, reduces transparency and increases the risk of corruption. Some countries, on the other hand, are almost ignored by donors.

The Code of Conduct defines the operational principles of complementarity in the field of development cooperation. In the absence of an internationally recognised definition of complementarity, the Commission defines it as the optimal division of labour between various actors in order to achieve optimum use of human and financial resources. This implies that each actor focuses its assistance on areas where it can add most value, given what others are doing.

The Code is based on good practices from the field and was drafted in collaboration with Member States’ experts. It builds on the principles contained in the Paris Declaration on the effectiveness of development aid (ownership, alignment, harmonisation, management by results and mutual responsibility ) and on the complementary objectives and values stressed in the European Consensus.

The Code proposes broad guidelines which establish the principles of complementarity in development aid. In particular, the Code consists of eleven guiding principles:

  • concentrate the activities on a limited number of national sectors (focal sectors). EU donors should confine their assistance in a partner country to two sectors in which they offer the best comparative advantage, as recognised by the government of the partner country and the other donors. Apart from these two sectors, donors can provide budget support and finance programmes relating to civil society, research and education;
  • redeploy into other activities in-country (non-focal sectors). As regards the non-focal sectors, donors should either remain committed through a delegated cooperation/partnership agreement * redeploy the resources becoming available in general budget support or exit from the sector in a responsible manner;
  • encourage the establishment, in each priority sector, of a lead donorship arrangement responsible for coordination between all the donors in the sector, with a view to reducing the transaction costs;
  • encourage the establishment of delegated cooperation/partnership arrangements through which a donor has the power to act on behalf of other donors concerning the administration of funds and dialogue with the partner government on the policy to be implemented in the sector concerned;
  • ensure appropriate support in the strategic sectors. At least one donor should be actively involved in each sector considered relevant for poverty reduction. In addition, there should be a maximum of three to five active donors for each sector;
  • replicate this division of labour at regional level through the application of the principles of the in-country division of labour in cooperation with the partner regional bodies;
  • designate a limited number of priority countries for each donor through dialogue within the EU;
  • grant adequate funding to the countries which are overlooked as far as aid is concerned and which are often fragile countries whose stabilisation would have positive repercussions for the region as a whole;
  • analyse and expand areas of strength: the EU donors should deepen the evaluations of their comparative advantages with a view to greater specialisation;
  • pursue progress on other aspects of complementarity, such as its vertical * and cross-modality/instruments dimensions;
  • deepen the reforms of the aid systems: the changes suggested by the Code require reforms of a structural nature and in terms of human resources.

The Commission believes that this Code of Conduct will enable the Union to play a driving role on matters of complementarity and the division of labour as part of the international harmonisation and alignment process (Paris Declaration).

Successful implementation will largely depend on the role of the Commission delegations and Member States’ field offices. In addition, its implementation is to be the subject of annual monitoring based on sampling of relevant country cases, a revised EU Donor Atlas and the Development Report.

The Code of Conduct is an ongoing document; it is to be reviewed regularly on the basis of the lessons learned from its implementation and the monitoring of the results.

Background

The objective of promoting the division of labour in EU development policy is not new. In 1995 and 1999, the Council had already adopted Resolutions on complementarity between the Community development cooperation policy and the policies of Member States. Then the Statement on Development Policy of November 2000 was an attempt to achieve operational complementarity between the Commission and the Member States on the basis of areas of added value for Community assistance. However, this approach gave rise to political and operational difficulties. In 2004 the EU decided to draw up an operational strategy towards complementarity the result of which is the present Communication. In addition, this commitment to enhanced complementarity has become a central element of the European Consensus and the Aid Effectiveness Action Plan.

Key terms used in the act
  • In-country complementarity: ensure balanced funding between all the sectors, transcending their political interest.
  • Cross-country complementarity: ensure that the EU has an overall, more regular presence in all the developing countries, by correcting the current imbalance arising from the fact that too many donors concentrate their efforts on certain efficient countries, often disregarding fragile countries.
  • Delegated cooperation: a practical arrangement where one donor (a “lead” donor) acts with authority on behalf of one or more other donors (the “delegating” donors or “silent partners”). The practical implementation modalities are defined between leading and delegating donors.
  • Vertical complementarity: ensuring synergies between similar activities in several areas undertaken at national, regional or international level.