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«20.11.2014 ARBEITSDOKUMENT zu dem Sonderbericht Nr. 13/2014 des Europäischen Rechnungshofs (Entlastung 2013) mit dem Titel „Rehabilitationshilfe ...»

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EUROPÄISCHES PARLAMENT 2014 - 2019

Haushaltskontrollausschuss

20.11.2014

ARBEITSDOKUMENT

zu dem Sonderbericht Nr. 13/2014 des Europäischen Rechnungshofs

(Entlastung 2013) mit dem Titel „Rehabilitationshilfe der EU nach dem

Erdbeben in Haiti“

Haushaltskontrollausschuss

Berichterstatter: Jens Geier

DT\1038363DE.doc PE541.419v01-00 DE DE In Vielfalt geeint Introduction Haiti is one of the most fragile states in the world and the earthquake which hit the country on 12 January 2010 dramatically exacerbated the situation. It claimed a heavy toll in human lives, caused massive destruction, had a grave impact on the national economy and reduced the already weak administration's capacity to provide basic services to the population.

Likewise the EU delegation was also severely affected both at human and operational level. It can be acknowledged that the EU delegation made significant monitoring efforts and that the programmes examined by the European Court of Auditors were appropriately designed to link humanitarian and rehabilitation phases and allowed conditions for sustainable development.

It has to be taken into account; however, that working in a fragile country including limited resources and the lack of administrative capacity and reforms entails risks, which ultimately challenge the effective and efficient implementation of programmes.

As part of the important international financial mobilization, the European Union response amounted to 1.23 billion EUR, out of which 460 Million EUR for rehabilitation and development of Haiti from the Commission on EDF funds (later increased to 522 million EUR), 18 Member States, which contributed 759 million EUR altogether, and 16 million EUR from the European Investment Bank. In addition, humanitarian aid was also provided by the Commission through the Directorate General for Humanitarian Aid and Civil Protection (ECHO) up to 232 million EUR for 2012-2013.

Despite the international effort, the recovery was still hindered end 2013 by pre-existing structural and operational issues before the earthquake in 2010 i.e. a weak public administration in sectors like health, education, water and sanitation combined with a poor public finance management making it difficult to optimize the use of resources and prevent fraud and corruption.

Audit Scope and Objectives The Court examined whether the EU support for rehabilitation in Haiti following the

earthquake was well designed and implemented with three main questions:

- Did the Commission address priority rehabilitation needs?

- Did the Commission ensure linkage between relief, rehabilitation and development?

- Did the Commission ensure effective implementation of EU support for rehabilitation?

The audit covered the support provided to Haiti in 2010-2013 by ECHO, the DirectorateGeneral for Development and Cooperation (EuropeAid) and the Service for Foreign Policy Instruments (FPI) and was carried out between May and November 2013. It included a review of the 10th EDF country cooperation strategy and other key policy documents, interviews with Commission and European External Action Service (EEAS) officials in Brussels, a visit to Haiti from 26 August to 6 September 2013 involving interviews with EU delegation staff, representatives of the Haitian authorities, the main international development partners, international NGOs and civil society organisations, as well as visits to projects.

PE541.419v01-00 2/9 DT\1038363DE.doc

DE 13 EU-funded programmes aimed to provide support for rehabilitation and disaster risk reduction were examined representing in financial terms about two thirds of the commitments made by the Commission for those two areas i.e. 141 million EUR out of an overall commitment from the Commission of 202 million EUR from February 2010 to December

2012. The review focused on assessing the relevance, design and outputs of these programmes, which were scored using relevant criteria from the Commission's Results Oriented Monitoring.

Court's Findings and Observations

- Did the Commission address priority rehabilitation needs?

The Court found that EU support for rehabilitation after the 2010 earthquake in Haiti was based on an appropriate assessment of needs agreed between experts, main donors and the government of Haiti. Several needs assessment were performed by ECHO experts on preliminary and multi-sectors needs assessment, by a joint team of experts from Commission and three Member states (DE, FR ES) on needs assessment in the areas of infrastructure, Public Finance Management (PFM), governance, justice and security and social services while the Commission also supported the Post Disaster Needs Assessment (PDNA)1 aiming at setting up a framework for development and growth. Furthermore, due to the multiple rehabilitation needs and scarce public resources, it is to be noted that budget support was considered crucial to fuel the restart and recovery of essential state functions in the very fragile context in the post-disaster era. A diagnosis of PFM weaknesses and an action plan with priority measures were agreed between the government and the donors involved in supporting economic governance.

The Court's examination also revealed that the EU support for rehabilitation was set up within a sound new cooperation strategy: the Commission revised the 10th EDF cooperation strategy with Haiti in relation with the above needs assessments while continuing supporting both long-term socio-economic development to eradicate poverty as well as responding to postearthquake rehabilitation challenges. This revised strategy was also accompanied with an increased financial allocation respectively of 100 million for the programmable aid to reach 391 million euro and an increase from 13.6 to 73.6 million euro to cover unforeseen events such as emergency assistance. In addition, the programmes reviewed by the Court generally reflected the strategy defined by the Commission.





As regards the geographical division of labour between the Commission and other main donors, the Court considered it was appropriate but nonetheless highlighted a difficult day-today coordination during the implementation of programmes. Three major difficulties with regard to the coordination among donors in Haiti were identified namely (i) the limited effectiveness of the coordination mechanism for humanitarian assistance run by the Office for the Coordination of Humanitarian Affairs (OCHA) wherein ECHO participated due to its complexity, the high number of humanitarian actors with their own operational methods or the reluctance of certain donors to work together, (ii) the complex coordination mechanisms The PDNA covers eight domains: governance, production, social sectors, infrastructure, regional development, environment and disaster risk management and cross-cutting issues such as gender, youth and vulnerable populations.

DT\1038363DE.doc 3/9 PE541.419v01-00 DE for development aid pre-existing to the earthquake and involving many stakeholders with different mandates and (iii) the slow decision-making by the Haitian government and the inability of Haitian authorities (the Interim Haiti Recovery Commission and the 'Cadre de Coordination de l'Aide Externe au Développement d'Haiti') to coordinate and provide strategic guidance for the increased support from international donors.

Likewise, for budget support, the Court also observed, as already the CONT Delegation reported it, that the priority action plan designed to seek a better coordinated monitoring and policy dialogue with Haitian authorities and whose purpose was to improve financial controls, introduce reforms and a common matrix of progress indicators, faded out progressively during implementation.

- Did the Commission ensure linkage between relief, rehabilitation and development (LRRD)?

Despite some Commission efforts, relief, rehabilitation and development were not sufficiently linked. The Commission used a range of complementary instruments flexibly involving discussion with national authorities and coordination with other donors and designed a variety of individual rehabilitation programmes to ensure the linkage between relief, rehabilitation and development.

However, the Court stated that the overall coordination within the Commission had several weaknesses. Even though the Commission established a crisis platform to coordinate the EU response, it was found that ECHO and EuropeAid had no clear common country strategy on LRRD to optimise the synergies and smooth transition between their respective activities.

This weakness was also stressed by the Internal Audit Service and during the visit of the CONT delegation in February 2012 in particular between ECHO and the EU delegation. The Court highlighted the lack of continuity (gap in time) between the end of ECHO short-term oriented programmes and the availability of EuropeAid's funding, the differing views between humanitarian and development partners for addressing housing needs for instance and also the lack of formalization of ECHO's exit strategy and handover to the EU delegation.

The examination by the Court of certain LRRD programmes showed that their design was appropriate in particular for linking humanitarian and rehabilitation phases, creating the conditions for sustainable development or restoring essential functions of public services.

Nevertheless, the Court questioned the prospects of achieving these objectives due to lack of appropriate reforms, the Haitian authorities' failure to take ownership and the absence of a properly functioning national administration in order to create appropriate conditions for sustainable development. It has to be taken into account, however, that working in a fragile country inevitably entails risks, which ultimately challenge the effective and efficient implementation of these objectives. The Court identified certain impeding factors such as delays in the implementation of programs, the lack of effective controls by the administration in the field of reconstruction including issues of property rights and the long process of developing the land register for the whole country, the limited prospects for setting up a continuous supply of good quality seeds for agricultural production or the slow progress made by the Government in the General Budget Support programmes.

- Did the Commission ensure effective implementation of EU support for rehabilitation?

–  –  –

DE The Court stated that the Commission did not sufficiently ensure effective implementation of EU support for rehabilitation. Ten out of the thirteen programmes1 examined by the Court delivered, or were likely to deliver, their planned outputs, although almost all with delays compared to initial timetables. These delays were only to a certain extent caused by a difficult post-earthquake context, but also due to deficiencies in the Commission's programme implementation. Three programmes achieved limited progress, including the 10th EDF general budget support programme aimed to support the implementation of the Government's action plan for post-disaster reconstruction and its growth and poverty reduction strategy. It should be noted that the Court reported that disbursements were stopped by the Commission and other budget support donors for this programme in 2013 due to unsatisfactory progress in the reform of the Government's Public Finance Management.

With regard to risk management and while the Commission was well aware of the difficult post-disaster context, the Court found that the Commission did not sufficiently manage some significant resulting risks to the implementation and achievement of its programme objectives2 such as inter alia long customs delays impacting ECHO's programme notably the construction of temporary shelters or the high fiduciary risk in providing budget support considering inadequate national control and accounting systems as recorded during the CONT delegation visit to Haiti in February 2012.

The Court finally observed that the monitoring of programmes was based on an appropriate framework but the Commission and the EEAS did not take timely measures to swiftly strengthen the resources of the EU delegation which had insufficient capacity, in particular that no re-deployment has been done in the immediate aftermath of the earthquake, to perform on the-spot visits and in particular not enough specific competence in Public Financial Management.

Summary of the Commission and European External Action Service Replies

Given the need for a comprehensive approach and coordination among Commission services, a link between relief and development is necessary on a sectorial basis, despite the lack of a formal joint country strategy for LRRD in Haiti. Full and systematic integration of the LRRD approach has been eventually included in the funding cycle covering 2014-2020. The Commission pointed out the different mandates and procedures between the services namely for ECHO not being mandated to implement long term development investments.

The Commission and the EEAS emphasized that most projects have achieved their intended results despite the difficult context leading to delays in their implementation.

As regards risks, the Commission and EEAS recalled that working in a fragile country inevitably entailed risks. While these risks were identified, the Commission managed to mitigate the impact of some external factors that caused delays. The Commission and the EEAS also mentioned that it was decided, in some cases, to implement the programmes despite the risks involved in order to contribute to the benefits of the population.

The programmes examined were related to ECHO projects, Instrument for Stability, Neighbourhood reconstruction and development, Food security and Budget support.

The main risk factors identified concerned political instability, security, land ownership rights, shortage of land and urban complexity, poor administrative capacity, low levels of participation at community level, inadequate coordination and natural hazards.

–  –  –



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