Informing NGOs, MEPs, member states, the European Commission and the media.  Issue 90, November 2004.

 
Funding changes raise fears over EC Aid

The Commission’s long-awaited proposal to simplify EC aid has raised fears that the changes could undermine the EU’s commitments on poverty alleviation and sustainable development.

The new proposal sees the current array of geographic and thematic budget lines reduced down to just six financial instruments. These will form the framework for the future funding of aid-related issues.

Under the new structure, most developing countries will be funded through two of these instruments:

1) Development Co-operation and Economic Co-operation¹ – replacing all thematic Regulations, including those on tropical forest, environment and gender; the Asia and Latin America (ALA) Regulation; and the European Development Fund (EDF) – if this fund is integrated, as currently proposed, into the Budget;

2) Stability Instrument² – partially replacing actions on human rights issues, this instrument aims to tackle crisis and instability in third countries.

But while both the Commission and civil society groups agree that more flexibility in aid spending is needed, the draft Regulations hand over key powers from the EU’s only democratically elected body – the Parliament – to its executive body – the Commission. For by collating some issues under a single Regulation and removing others from the co-decision procedure, Parliamentary involvement in future decisions will be greatly reduced. This leaves the Commission free to define priorities for co-operation with no obligation to consult civil society.

FERN is concerned that these changes could reduce transparency in aid allocation and increasingly divert development funds towards economic co-operation. It is crucial both that these concerns are addressed and that the Commission integrates the EU’s sustainable development and other international commitments into its future aid allocation decisions. To this end, FERN is calling for a decision-making process which will involve meaningful scrutiny by civil society, and in particular, the European Parliament. FERN will publish a preliminary analysis of the proposal later this month.

 

1 See: http://europa.eu.int/eur-lex/en/com/pdf/2004/com2004_0629en01.pdf

2 See: http://europa.eu.int/eur-lex/en/com/pdf/2004/com2004_0630en01.pdf

 

UK certification assessment

On 9 November 2004 the UK government published its long-awaited assessment of which of five existing forest certification schemes were deemed to guarantee that timber imports into the UK come from legal and/or sustainable sources. The assessment, which will form the basis of the UK's public procurement policy for timber concludes that all forest certification schemes give assurance of legal harvesting, but that only the FSC (Forest Stewardship Council) and the Canadian Standards Association (CSA) provide assurance that timber comes from well-managed forests. The US’ Sustainable Forestry Initiative (SFI) failed to qualify because of its lack of a proper chain of custody, while the PEFC (Programme for the Endorsement of Forest Certification) and MTCC (Malaysian Timber Certification Council) failed due to inadequate stakeholder involvement in the standard-setting processes. The PEFC additionally failed on the grounds of lack of consultation and transparency. These findings echo those of FERN’s report ‘Footprints in the Forests’which also questions the legality claim for all five schemes. In six months from now, UK government departments will begin making distinctions between the schemes in their procurement policies.

 

1 For more information see http://www.sustainable-development.gov.uk/sdig/improving/partf/greenbuy/24a.htm

2 Available at: www.fern.org

 

ECAs back suspect mill

Research in Indonesia’s highly threatened Tesso Nilo National Park has revealed that trees cut illegally in the park were delivered to the PT Indah Kiat Pulp mill. The mill, owned by Asian Pulp and Paper, is known to have received funding from several – mostly European – Export Credit Agencies (ECAs): EDC (Canada), Finnvera (Fin), EKN (Swe), CESCE (Spain), EKF (Den) and apparently also from the German Hermes.

The Tesso Nilo park, located in Sumatra’s Riau region, represents the largest remaining lowland forest in Sumatra and is home to an extraordinarily rich biodiversity. Threatened species still surviving in this area include the endangered Sumatran elephant and the Sumatran tiger.

The research, carried out by the Indonesian NGO Network Forest Rescue Alliance Riau, was conducted in July 2004. It provides further conclusive evidence for the urgent need for ECA reform.

 

Species and habitats to lose LIFE

The Commission’s new financial programme for environment, LIFE +, looks likely to have serious implications for wildlife conservation in many Member States. This September's proposal will replace the current LIFE programme from 2007-2013.

Under the existing LIFE programme, LIFE-Nature contributes funding for the implementation of the Habitats and Birds Directives, including Natura 2000, filling important funding gaps for issues falling outside the remit of the EU's Rural Development and Structural funds. Yet while the Council previously adopted Conclusions stating that LIFE should be enlarged, the new LIFE + sees LIFE-Nature more or less scrapped.

So while future funding for managing Natura 2000 sites will come from rural and regional funds, there will be no designated funding for conserving habitats or species. After 2006, species and habitats falling under the Habitats or Birds Directives, but which are not designated Natura 2000 sites, will no longer fit into any funding programmes.

 

Land reform oversight

The Commission’s new Guidelines to support land policy design and reform processes in developing countries’¹ were presented on 19 October 2004. However, while the Guidelinesunequivocal language on links between poverty and unequal land distribution is welcomed, FERN is concerned that the role of EU policies in undermining land reform in the South receives no mention.

This is strange. The Guidelines acknowledge the political nature of land tenure, point out that land policy reform is fundamental to equitable and sustainable development, and are explicit about factors resulting in land re-concentration: lack of trade and agricultural policies which support small farmers; predominance of export-related agriculture; government withdrawal from providing rural extension services. Yet for some reason the Guidelines do not make the link between these “key” issues and the EU policies on trade, aid, climate and investment which have brought them about.

FERN suggests that the Commission has another look at the concept of cause-and-effect.

 

1 COM(2004) 686 final         

 

Trade limits

The Commission has developed a new proposal to reduce import tariffs for certain products from developing countries. The aim is to promote exports while encouraging sustainable development.

The proposal is an extension of the existing Generalised System of Preferences (GSP) beyond forests.¹ The new GSP+ will require beneficiary countries to ratify and implement 27 key international conventions including 16 labour standards and human rights conventions as well as 11 ‘sustainable development’ conventions including the CBD, CITES and Kyoto Protocol. Tariff reductions are immediately granted to countries ratifying all 16 labour and human rights standards and 7 of the remaining conventions. All conventions must be ratified before January 2009.

Unfortunately, while such incentives should be strongly supported, the impact of GSP+ will be limited: The 90 or so countries with an existing or pending bilateral trade agreement with the EU will be removed from the list of potential beneficiaries.

 

1 GSP aimed specifically to improve forest management by granting lower tariffs to countries managing their forests sustainably. To date, only one country (China) has applied for lower tariffs. For more information see: http://europa.eu.int/comm/trade/issues/global/gsp/memo201004_en.htm

 

NEWS IN BRIEF

ACP-EU partnerships: Concerned that economic liberalisation under EU-ACP partnership agreements will undermine efforts to eradicate poverty, civil society groups in the Pacific region and the EU have asked to be consulted during all the stages of preparation of the agreements. The request was raised during the 7th Regional Seminar of the ACP-EU Economic and Social Interest Groups, held in Fiji on18-20 October 2004.

 

Carbon trading challenged: Representatives from around the globe came together in October 2004 to challenge the assumption that carbon trading, now the central pillar of international climate commitments, will avert a climate crisis. The Durban Declaration on Carbon Trading, which outlines the inadequacy of carbon trading to slow climate change, is available for sign-on at: www.sinkswatch.org

 

Sawn timber ban: September 2004 saw exiting Indonesian Forestry Minister Muhammad Prakosa announce an export ban on Indonesian sawn timber. While the ban seems as likely to protect Indonesia’s wood-processing industry as its forests, the increased control could still be a positive step in the country’s fight against illegal logging.

 

Indonesians discuss FLEGT: October saw Indonesian NGOs present their conclusions on the Forest Law Enforcement, Governance and Trade (FLEGT) process to NGOs, industry and policy-makers during a 12 day tour of Belgium, Finland, Sweden and the Netherlands. Their position papers are available from FERN: iola@fern.org

 

New publication: FERN is pleased to announce the publication of its new briefing paper Blood from a stone: can the new EU Directive on Public Access to Information force ECAs to open up?¹ The paper assesses the potential and limitations of the new Directive² for forcing European Export Credit Agencies (ECAs) to open up their characteristically secret operations.

11 Available at: www.fern.org

22 Directive 2003/4/EC of 28 January 2003 on Public Access to Environmental Information and repealing Council Directive 90/313/EEC

 

Forest Agenda

22 November: Stakeholder Conference: Post 2012 Climate Policy for the EU. Brussels, Belgium

30 November: Workshop: Export Credit Debt campaigning. EURODAD Annual Conference. Soesterberg, Netherlands

6-17 December: Conference of the Parties to the Climate Change Convention (COP10). Buenos Aires, Argentina

 

EU Forest Watch is published by FERN, the forest campaign group focusing on EU policy.
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PHOTO: Kakamega Forest.
Half of Kenya’s only tropical rainforest has already been lost. What is left provides a unique sanctuary for biodiversity and a vital resource for local people, many of whom depend on it for fuel, medicine and food.
Credit: A. Arbib.