By Patricia Feeney, Queen Elisabeth House

MARCH 1998

WHY THE EU NEEDS A COMPLAINTS MECHANISM FOR ITS DEVELOPMENT COOPERATION PROGRAMME

1.     European NGOs and their Southern partners are calling on Member States who are currently negotiating the future of the Lome Convention - the EU’s aid and trade agreement with developing countries in Africa, the Caribbean and the Pacific (the ACP States) - to establish a dedicated mechanism to enable people in developing countries, who may have suffered adverse material harm as a result of an EU project or programme, to have their complaints independently assessed.

2.     The EU is virtually the only major multilateral aid institution not  to offer the intended beneficiaries of its development projects and programmes a means of having a fair and reasonably independent hearing should problems arise which cannot be settled through the usual channels.

3.     NGOs believe that one way of translating the goals of transparency, accountability and participatory development into specific action would be to set up a complaints mechanism for non-EU citizens, who at present are excluded from the existing procedures.  MEPs most involved in monitoring the EU’s aid programme suport this proposal.  Mrs Glenys Kinnock,for example, believes  that a complaints mechanism could help the Commisison and MEPs assess grievances at a much earlier stage and,if after an inquiry,the complaints were considered to be well-founded, then a  complaints panel could make recommendations to correct damage to the local community. 

Deficiencies in the Current Disputes Settlement System

·        Double Standards

There is an implicit assumption in the current system that any failure to meet the human rights and sustainable development principles of the Convention will be on the part of   the ACP State and not on the part of the Community.  Disputes that arise between and ACP-State and Member States or the Commission over both the application or interpretation of
the Convention may be resolved by referral to the Council of Ministers or, if necessary, through arbitration.  In extreme situations either the Community or the ACP-State may denounce the Convention.  But ‘denouncement’ of the Convention only makes sense as a sanction when it is applied against an ACP-State.    The human rights suspension clause that was introduced after the mid-term review of Lome IV (Mauritius, November 1995) has only served to reinforce the impression of dual standards.

Yet Article 10 of Lome IV, stipulates that the Contracting Parties have a duty to  take all appropriate measures to ensure that the fulfilment of the obligations arising from this Convention.  This obligation might reasonably be interpreted as applicable to both the Community and the ACP-States in the redress they offer people adversely affected by a project.   Yet to date no specific measures of redress for third parties have been proposed.

·        Evading Responsibility

The EU in its Green Paper on the future of Lome acknowledges that shared responsibility for managing aid between the Commission and the beneficiary countries has been a source of confusion and delay.  It has also been used at times as a pretext for the Commission to evade all responsibility for rectifying problems that have occurred within its development programmes.  Repsonsibility is usually laid at the door of the ACP governments.  The  Council of Ministers at times has disclaimed all  responsibility for the EDF programme, on the grounds that it has delegated decision-making authority to the Commission assisted by the EDF-Committee.  Yet the Development Finance Cooperation Committee, a subsidiary body of the Council of Ministers, already has powers to examine specific problems, but only at the request of the Community or the ACP States.  The Council of Ministers is also charged (under Article  324, Section 6 of ACP-EEC  Convention - Lome IV ) with examining ‘at least once a year whether the objectives of development finance cooperation are being attained’ and ‘the general and specific problems resulting from the implementation of that cooperation’.  These obligations and powers have virtually never been excercised in respect of complaints from project affected people.  

·        Limited Parliamentary Oversight

The  European Parliament’s Development and Cooperation Committee has the power to raise concerns about the implementation of the EDF programme and to question Commission officials, but the level of detailed knowledge about specific projects and programmes that is inevitably required puts even the most conscientious MEPs at a disadvantage.  With no dedicated procedures in place, and given MEPs heavy workload, effective monitoring of these situations is problematic.  On occasions the Commission has gone back on assurances it has given to MEPs that remedial action would be undertaken.

Since 1981 the European Parliament’s rules of procedure have allowed for the setting up of ad hoc committees of inquiry.  Article 138c of the Maastricht Treaty strengthen this provision allowing the Parliament to establish a temporary inquiry committee ‘to investigate alleged contraventions or mal administration in the implementation of community law’.  There are a number of problems with this mechanism: one is that the European Parliament has no formal control over the EDF so it would have no authority to recommend remedial action for project affected people.  (The 1993 Treaty on European Union gave the European Parliament the power of granting discharge to the Commission in respect of the implementation of the budget,  so formally the Parliament does have greater control over non-Lome aid.)   Another problem is that an ad hoc committee structure might inhibit the development of common procedures and interpretations of Community aid principles - essential elements of any complaints mechanism.

There is also an entitlement for both citizens and any person resident in or having their office in a Member State to petition the European Parliament (Article 138 d of  the Treaty of Union).   This mechanism appears to be relevant for domestic issues concerning the application of Community law but, as once again non-EU citizens are excluded, it offers little scope to people whose rights and livelihoods may have  been damaged as a result of poorly conceived and executed EU development programmes.

·        The Role of the Ombudsman

Community institutions are also subject to the jurisdiction of the Ombudsman (a position established by Article 138 e of the Treaty of Union), who is appointed by the European Parliament.    The Ombudsman may examine cases of mal administration on the part of Community institutions, by which is meant administrative irregularities or omissions, abuse of power and negligence.  The institutions must supply information on request and give access to files, except where grounds of security are pleaded.  Once the Ombudsman has concluded his investigation he sends a report to the European Parliament and to the institutions under investigation and the complainant is to be informed of the outcome.  But once again the Ombudsman may only receive complaints of mal administration from EU citizens.  Furthermore, at the end of this protracted process, even if the Ombudsman finds that the Commission has been negligent he has no formal powers to ensure that remedial action is carried out.

·        The Court of  Auditors

Control of the Communities’ finances is the responsibility of the Court of Auditors, which reveiws all EU expenditure, including the cost effectiveness of the Commission’s development and humanitarian work.    The Court of Auditors reports, which have at times been critical of the aid programme, have been influential in changing spending priorities and improving accounting procedures. It uses its audit work as the basis for proposals to encourage the institution responsible for management (the Commisson), and, to a similar extent, the legislative authority (the Council of the European Union and the European Parliament)  to make the necessary improvements.  It also monitors activities outside the geographical boundaries of the EU, including cooperation agreements between the EU and ACP States.  As an institution, however, it is less well adapted to following up specific problems arising in particular projects.  There seems to be no mechanism in place to ensure that recommendations that it makes in its reports on specific projects - even strictly financial ones - are acted upon.   It acknowledges in private that if it were to press claims with regard to individual projects this might undermine the degree of cooperation it obtains from the Commission and which it requires in order to conduct its wider role as the ‘financial conscience’ of the Union.  

·        The Possibility of Legal Redress

Unlike the World Bank, which enjoys immunity from legal action before national courts except where this is explicitly waived, the EU does offer one other potential avenue for  project affected people to seek redress. [1]  Article 215 of the Maastricht Treaty entitles even non EU citizens to file a complaint before the European Court of Justice (which overseas the proper application and interpretation of Community law) and seek to recover damages caused by Community institutions  or “by its servants in the performance of their duties”.   But all litigation is  lengthy, costly and complicated and this perhaps explains why to date no cases concerning the Commission’s development cooperation programme  have been filed by project affected people.   A non-judicial procedure that is mainly directed at correcting harm to the intended beneficiaries of EU aid rather than in apportioning blame would be preferable.

·        Arbitrariness in Decisions on Remedial Action

One of the inherent weaknesses of existing grievance procedures is the fact that the Commission,  in its anxiety to avoid any suggestion of formal liability, usually restricts remedial action to community-wide, small-scale development projects.  Individual or household compensation is almost never an option.  Development literature is replete with examples of how (usually inadequate) cash payments are an inappropriate method of compensation, however there are clear equity problems with the current “community” solutions.   First of all there are huge opportunity costs for a community in drawing up project proposals which meet the Commission’s stringent requirements.   In order for them to do so almost inevitably requires support from an established intermediary, which  has the effect of  transferring responsibility for  solving the problem from the Commission to an NGO.  These remedial actions  tend to  become bogged down in wider government-EU aid negotiations and project cycles.  In one case,  for example, the Commission insisted that since it had no contingency funds to draw on remedial action  would have to wait for the next round of (the 5-yearly) national indicative programming.   In another case, those affected by a road construction project were not a homogeneous or readily identifiable group.   In these circumstances the Commission’s insistence that  remedial assistance could only be provided once the diverse, shifting and fragmented population living in the Nairobi suburbs had  produced a cluster of inter-locking micro projects was unrealistic.  Secondly, community solutions are by their nature non-specific, which leaves open the possibility that the proposed remedies may not address or correct the residual harm suffered by particular, vulnerable individuals or households.  The building of a school, for example, though desirable to the majority of  people in a community, may not be of any direct benefit to an elderly widow bereft of  adequate shelter or means of support.  Thirdly, in the absence of base line data, the lengthy delays that almost invariably occur between the damage being inflicted and obtaining the agreement from the  Commission that it will finance some mitigatary measures means that the task of identifying those who have suffered the greatest physical or economic losses becomes more difficult and contentious. Finally, neither the World Bank’s Inspection Panel nor the European Ombudsman and European Parliament are empowered to make binding recommendations.  This means that final discretion for  determining the level and scope of  any remedial action rests in the hands of the aid managers who may have been, at least in part,  responsible for the original damage.   At the present time it would appear that an arbitary ceiling of 300,000 ecus has been unilaterally determined by the Commission for funding remedial actions irrespective of the nature of the losses and the damages incurred by the affected people.   In such a  process the needs and views of the injured parties are easily sidelined.

·        Conclusion

One of the most tangible indications of  the EU’s determination to overcome past difficulties in the effectiveness of  its aid  and its willingness to incorporate principles of  transparency and accountability into its own operations would be the establishment of  a complaints mechanism which recognizes the rights of non-EU citizens.  If the EU is genuinely interested in fostering participative approaches then it should acknowledge that the traditional closed governmental circuits that have typified its deliberations and decision-making processes will have to be opened up not only to EU citizens but to a wider public, including the intended beneficiaries of its development cooperation.

·        Proposal

An expert group including MEPs, Commission officials, NGOs and others (in particular individuals who are or who have been members of  the World Bank’s Inspection Panel) should be convened to discuss the need for a dedicated EU complaints mechanism for non-EU citizens, which should consider the following: issues:

*          the arguments for and against such a complaints mechanism;

*          the scope of such a mechanism;

*          the criteria for admissibility;

*          the relationship of any such complaints mechanism with existing procedures, in particular the Parliamentary Petitions Committee and the Ombudsman;

*          the possibility of establishing a contingency fund under the management of the complaints panel but subject to Parliamentary supervision, which could award compensation payments.

NGOs believe that a complaints mechanism should not be limited to aid provided under the Lome Convention (and its successor)  but across  the whole range of EU aid programmes, including the European Investment Bank (with additional safeguards built in to protect areas of business confidentiality).  Furthermore, over time such a mechanism could develop powers to hear claims concerning the bilateral aid programmes of EU member states.

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