This report includes comments on the draft Parliamentary Report (PE 229.394).

30 March 1999

This report has been produced by Fern (UK and Brussels) and is supported by World Wide Fund for Nature - European Policy Office (WWF-EPO); the Rainforest Foundation UK; the Netherlands Committee for IUCN (NC-IUCN), ICCO (Interchurch Organisation for Development Co-orporation) the Netherlands; Amis de la Terre, France and Friends of the Earth the Netherlands.

The above mentioned NGOs strongly support the Tropical Forest Budget Line and therefore the establishment of a new Regulation. There have been positive steps towards the provision of a small grants fund and the support of forest peoples as being conditional for approval of projects and this has been noted. However, there are three major areas which need further elaboration in the current Commission's proposal:

Three Key Concerns:

1. Improvement of the quality of EC aid by 1) greater access to information, 2) proper implementation of existing policies, 3) increased staffing, 4) proper monitoring and evaluation of projects.
2. Prior informed consent for local people and support for local initiatives rather than for national or regional initiatives.
3. Ensuring sufficient funding for tropical forests. As the Regulation has been extended to the Maghreb region there is a danger that a large proportion of the funds will be diverted away from the tropics. This would be not only against the spirit in which the Regulation was created but would also ignore the immense ecological, and social and cultural values of these forests and the enormous problems these forests face.

Concerning 1:

The Improvement of the quality of EC aid by greater access to information, proper implementation of existing policies, increased staffing and proper monitoring and evaluation of projects.

• Recent evaluations of EC aid show that a considerable improvement of the quality of EC aid is needed. The ECO Evaluation (focusing on tropical forest projects) shows that 53% of all projects displayed poor performance. It should be noted that the Tropical Forest Budget Line performance is notably better than the EDF and ALA Budgetlines. The main causes of the poor performance appear to be:

• Lack of environmental expertise, and lack of involvement in environmental issues in key positions in the Commission.
• Lack of human resources in the Commission. (It should be noted that the ratio of funds managed to the number of staff is up to 7 times higher than in the World Bank).
• A late and insufficient use of EIAs (Environmental Impact Assessment) and SIAs (Social Impact Assessment).
• A dominant 'top down' rather than 'bottom up' approach.

It would be good if the Parliamentary Report could indicate that more staff is needed to improve the current performance, as well as that proper EIAs (Environmental Impact Assessments) and SIAs (Social Impact Assessments) have to be carried out for all projects. It is a fact that in the newly established SCR (Service Commun Relex) there is still insufficient staff to deal properly with all tropical forests and environment projects.

• The process for selection of projects needs to be opened up. The procedure described in Article 8 does not provide the opportunity for scrutiny on any Commission decisions below 2 Million EURO. The EDF (European Development Fund) and ALA (Asia Latin America) Committees are the only outside Commission bodies to scrutinise the Commission on projects above 2 million EURO. It would be a great step forward in transparency and accountability if Project Identification Sheets, EIAs and SIAs could be submitted to the Parliament on request and published on the Commission's website (for example as project information by country/region) as a good example to other donors and to allow input from the Parliament and Civil Society in the broader sense.

• An annual report is insufficient, particularly as experience shows that they are often not delivered. We would like the Parliament to demand a biannual report instead of an annual report (Article 11). It would be even better if project identification sheets and finance proposals were published via the Commission's website or EU Information Offices. It should be noted that greater transparency can only be achieved by increasing the staff.

Suggestions for amendments related to this point

Article 3:

Add: new indent: proper coordination and information flows between projects of the Commission and Member States to create coherent actions in that region.

Article 4, point 6:

Delete: the second part of this sentence. (There is no global forest policy. According to almost all NGOs and Indigenous Peoples Organisations there should not be one , unless it is clear that all direct and underlying causes will be addressed by such a policy. This is currently not the case. )

Article 4, point 7:

Add: Positive activities under the budget line should be taken on by other EC funding mechanisms such as EDF and ALA and lessons learned should be disseminated to Member States.

Article 8:

Add: Project identification sheets, EIAs and SIAs will be available on the Commission's website within a month of finalising.

Article 8:

Add: Minutes of Commission meetings at which project-selection is being discussed will be open to Parliament and NGOs on request.

Article 9, point 2:

Add: These minutes will be made publicly available on the Commission's website within two weeks of the meeting and will be sent to the Parliament on request.

Add: The representative of the Commission shall, subsequent to consultation with external experts including NGOs submit to the Committee a draft of the measures to be taken.

Article 10:

Add: Parliamentarians, external experts and NGOs working on forest issues will be invited to this presentation.

Article 11, point 1:

Change: annual to bi-annual report

Article 11, point 2: last sentence:

Add: The assessment reports shall be available to any Member States MEPs and NGOs requesting them.

Article 11 point 3:

Add: These decisions will also be published on the Commission's website within a month.

Suggestions for Parliamentary amendments as mentioned in the draft Parliamentary report (PE 229.394)

Amendment 4 (article 3):

Drop: and of sustainable forest management. (The point is that the status of forests should be raised by proper valuation of all forest values (ecological, social, cultural and economic). By highlighting SFM it looks like the amendment opens the door for emphasizing the economic aspect.)

Amendment 6 (article 4(1)(b)).

Drop: and creation of forests in other areas.

Amendment 9 (article4(3), introduction and first indent):

Add: environmentally and socially responsible entrepreneurship

Amendment 11:

Add: environmental sustainability and possible negative social effects of the activity envisaged

Concerning 2:

• It would be advisable to incorporate the Development Council Resolution on Indigenous Peoples (December 1998, see end) into the current Regulation. As almost all humid tropical forests are inhabited by indigenous peoples Article 5 and 6 of the Council Regulation should be adopted in Article 4 point 1 and 3.
• In the draft Regulation priorities are being set at a national and regional level. There is a need to look at all levels (preferably also ecoregional and ecosystem level) and an even greater need to ensure the budget line can fund projects which benefit local people and the forests but which may not be in line with official government policies, i.e. land demarcation projects. The Regulation should acknowledge that often 'vested interests' closely linked with governments are part of the problem of forest loss (as rightly acknowledged in the Commission's draft Communication on Tropical Forests). Country Strategy Papers and National Forest Plans often do not reflect the need of the forest peoples in that country).

Suggestions for amendments related to this point

Article 3:

Add: new point: Ensuring active participation of local people in the development of national forest policies and development planning

Article 4:

Add: point (f): capacity building of forest peoples and other local communities to ensure proper participation of these people in national, regional and local decision making processes.

Article 4, point 1 a:

Add:...institution building, support to private and informal sector and taking into account other sectoral policies which impact on forests and the interests and customary rights of forest peoples;

Article 4, point 1 b:

Add: All conservation and restoration efforts should be carried out with full participation of local people.

Article 4 point 1 d last line:

Add: 'large scale' before forest clearing .

Article 4 point 2:

Add: new indent: reliable information from forest peoples, conservation organisations and civil society.

Article 4, point 3, third indent:

Change: participation of forest peoples in the decision making on and implementation of operations carried out pursuant to this Regulation.

Article 6, point 2:

Add: Community based or grassroots organisations will not be requested to provide co-financing and the Commission will investigate innovative and appropriate means to ensure funds reach grassroots projects.

Suggestions for amendments to the draft Parliamentary report (PE 229.394)

Amendment 12 (Article 4 (4), second sub paragraph):

Add: Forest peoples and local communities should be involved in evaluation processes.

Concerning 3:

Ensuring sufficient funding for tropical forests.

• A solution would be to set aside a certain maximum amount for countries in the Maghreb region, thereby ensuring sufficient funds will be spent in the rest of the tropical forest area.

5. The Council recognises that cooperation with and support for the establishment of partnerships with indigenous peoples is essential for the objectives of poverty elimination, sustainable development of natural resources, the observance of human rights and the development of democracy. The Council notes in particular:

• the key role played by indigenous peoples in the conservation and sustainable use of natural resources;

• the positive contribution of indigenous peoples in the development process;

• the vulnerability of indigenous peoples, and the risk that development programmes may disadvantage them;

• that indigenous peoples have the same rights as everybody else to a secure livelihood, and the lifestyle of their choice, and should be treated equally in the legal framework; they should also have access, on a non-discriminatory basis, to the opportunities and natural resources required to achieve these aspirations, as well as multilingual education and health services;

• that indigenous peoples have the right to choose their own development paths, which includes the right to object to projects, in particular in their traditional areas. This includes compensation where projects negatively affect the livelihoods of indigenous peoples.

6. The Council acknowledges that the development cooperation should contribute to enhancing the right and capacity of indigenous peoples to their "self-development". This implies integrating the concern for indigenous peoples as a cross-cutting aspect at all levels of development cooperation, including policy dialogue with partner countries and enhancing the capacities of indigenous peoples' organisations to take an effective part in the planning and implementation of development programmes.