Skip to main content

European Communities (Definition of Treaties) (Agreement amending the Cotonou Agreement) Order 2007

Volume 693: debated on Wednesday 27 June 2007

rose to move, That the draft order laid before the House on 4 June be approved.

The noble Baroness said: My Lords, as we know, despite the progress of recent years, considerable challenges remain in our efforts to eradicate poverty. The European Union, which represents the world’s largest multilateral grant provider, largest single market and main trading partner of most developing countries, can potentially make a huge contribution to eradicating global poverty.

It is just over five years since the Cotonou agreement, the successor to the Lomé convention, was agreed by the EU and African, Caribbean and Pacific (ACP) partners and ratified by this House. The agreement marked an important step forward in the EU’s relationship with the ACP states, improving and strengthening the principles and priorities of that partnership.

The 2000 Cotonou agreement made several important changes to the Lomé convention, including an overriding objective of poverty eradication, improving and simplifying development assistance through the European Development Fund (EDF) and making good governance underpin the agreement. The Cotonou agreement provides for a revision every five years. The first review was concluded in February 2005. Its aim was to improve the implementation of the agreement, focusing on certain areas of co-operation and addressing some new political and security issues. The trade provisions were not considered as part of the review, as they are the subject of a separate ongoing negotiation to establish economic partnership agreements, to come into effect on 1 January 2008.

The first order details those changes. The central objective remains the reduction and eventual eradication of poverty. New commitments by the international community to the millennium development goals, and on the need to improve the effectiveness of our aid, have been reflected. The changing security and foreign policy climate has been taken into account with an agreement to co-operate in the fight against terrorism, to combat the proliferation of weapons of mass destruction, to prevent illegal mercenary activities and to support the work of the International Criminal Court. The procedures for conducting political dialogue and addressing human rights, democracy and rule of law concerns have been elaborated.

Language concerning several potential areas of co-operation—for example, in regard to the fight against poverty diseases, supporting youth development and use of information and communication technologies—has been strengthened. A new emphasis has been given to supporting countries facing post-conflict or post-natural-disaster situations. The UK fully supports all of these changes. We firmly believe that they help to enhance and strengthen the longstanding partnership between the EU and ACP states.

The amendment of Cotonou also provides for the establishment of a new financial framework for EC co-operation with ACP states and the overseas countries and territories—the OCTs—of several EU members from 1 January 2008. In June 2006, EU member states agreed to a 10th replenishment of the European Development Fund, the EDF. That is the subject of the second order before the House.

Overall €22.682 billion, approximately £15.746 billion, will be made available over a six-year period from 2008-13. This represents a significant increase over the ninth EDF, which provided €13.8 billion over a five-year period to the end of 2007. That is a firm demonstration of the EU’s collective commitment to supporting the development of ACP states and OCTs. The UK is contributing approximately €3.36 billion, representing 14.82 per cent of the total. That too is a significant increase over our commitment to the ninth replenishment, reflecting our confidence in the ability of the European Commission to deliver poverty-focused assistance to ACP and OCT partners.

EU member states will also be able to increase their contributions to the 10th EDF. As aid is scaled up in the context of the EU’s 2005 aid volume commitments, EU member states will be able to look to the EDF as a vehicle for channelling additional resources. The UK believes that that voluntary mechanism provides a continuing incentive to the European Commission to improve the effectiveness of the EDF. The European Investment Bank will supplement those resources with an additional €2.03 billion for loans through the Cotonou Investment Facility.

Together with ongoing Commission reforms, the revised Cotonou agreement and the agreement to establish the new 10th European Development Fund represent a further important step in Europe’s efforts to meet the millennium development goals. I therefore commend these orders to the House.

Moved, That the draft order laid before the House on 4 June be approved. 19th Report from the Statutory Instruments Committee.—(Baroness Royall of Blaisdon.)

My Lords, I thank the Minister for explaining the orders. We on these Benches are happy to accept them. We support these moves to reduce global poverty, especially where good governance underpins agreements.

I have three questions. First, the EDF is funded separately from the EU budget. The EU has not always been an effective mechanism for giving aid. How will the Government monitor the allocation or lending of funds?

Secondly, to which countries do Her Majesty’s Government envisage the greatest amount going? That is important; the amount of EU aid to the poorest countries has gone down over the past 10 years. How do the Government intend to rectify that?

Thirdly, do they envisage most resources being allocated on bilateral programmes or through multilateral institutions such as the World Bank? If large amounts are to go directly to recipient Governments, how do Her Majesty’s Government envisage that corruption and fraud can be reduced as much as possible?

My Lords, we, too, welcome these orders as an opportunity for the United Kingdom to carry on with its hitherto rather impressive contributions to international aid under these programmes. I thank the Minister for the detailed explanation of the two orders.

The relative position of the recipient countries in the ACP framework is, and always has been, that they are much weaker on average as recipients than are the donators—the member states of the European Union. To some extent that difference has not narrowed as much as we might have expected because of the slowness of development in some recipient countries. The fact that the EU is much stronger gives us the opportunity to increase our contribution; the figures for EDF 10 show an impressive increase from previous figures. A lot of progress has been made over the years since the old days when the Lomé convention first started.

The negotiating postures between the member states and the recipients can often bring problems when the recipient countries do not effectively negotiate what they should be getting and lose out, not only in certain marketplace opportunities and aid fund receipts, but also in how they can deploy their strategies for internal economic development for the few years ahead of whatever year of settlement this is.

This gives the opportunity, which the Conservative official spokesman referred to, for the European Union to carry on increasing its monitoring, supervision and surveillance procedures for these matters. This is a matter of concern. There is a general impression that a lot of improvement has been made in the technical surveillance capacities and the ability of the officials representing the European Union and the member states to make sure that the money is deployed properly for specific projects. The use of money remains a concern in certain countries. The Minister may wish deliberately to avoid highlighting which countries are giving concern, but it is of help to the House if that information is available.

At the time of Commissioner Patten’s work on the previous negotiations, when Cotonou started in 2000, there was to be much more focus on the eradication of poverty, rather than the general disbursement of aid in a much vaguer way, as one had had hitherto. Does the Minister feel that progress has been made in that focusing exercise, so that the millennium development goals of the United Nations are beginning to be achieved by the global activities of the EU as part of that general picture? Commentators and people in the entertainment business have made great intellectual contributions to these matters and registered their disappointment at how these goals are not being achieved. More needs to be done by the European Union, which—speaking from memory and not having the figures to hand—gives more money in aid than the United States does. One significant proportion of total US aid goes to one country—Israel—which can be classified as an advanced country and not a developing country. The figures for the European Union are therefore impressive and we welcome the increases.

There are, as the Minister knows, still exemptions in these fields, which are disadvantageous to developing countries. One thinks of the exemptions for sugar beet, and other favoured markets in the European Union, where the cartel protection for European advanced countries still exists; that continues to be very unsatisfactory.

The EU-Africa second summit will take place in Lisbon in December 2007. It will not primarily deal with matters such as aid and European Investment Bank activity. It is much more to do with non-economic, non-financial, non-aid matters. It is also about an ambitious strategic new partnership with African countries—part of the ACP framework—on security and so on. Security as a global umbrella concept is important from the point of view of development, so there is a link there. It is good to see that that link—the wider context between the EU and Africa—is developing apace. The success story is there.

Good governance has to be emphasised much more, and the five-year reviews constitute a good framework on which to develop these matters over the 20-year period, but the good governance syndrome needs special attention. I hope the Minister can reassure us yet again that that will be given priority. She said that trade issues were not directly involved in this and that they were a separate part of the discussions coming through the other frameworks. That brings us back to the question of whether our international institutions, which were developed after the Second World War, are still as apposite as they should be for direct assistance to developing countries, and whether they need to be modified in any of their parameters and procedures to help countries, besides just representing the advanced and wealthy West. I am glad that, as she said, the United Kingdom is giving nearly 15 per cent of the total of these increased figures. The partnership agreement between the ACP group of states and the EC has got off to a good start. A lot more needs to be done, and we welcome the increases that will come, presumably, as the years unfold. It is still in the early stages; we need to be reassured that the procedures and administration are running efficiently. On that supposition, I am happy to support these orders.

My Lords, I am not a full expert in this area, but I echo my noble friend’s welcome for this agreement. I have always been rather uncomfortable with the concept of the ACP, which seems to reflect the colonial geography of the 19th and early 20th centuries. Does the Minister feel that the continuation of a major flow of aid and assistance through this structure distorts the way in which aid is distributed globally? Are more worthy developing states left out because of this historical relationship between European Union member states and their former colonial territories? I am concerned about the continuation of that. Perhaps states that are not within the ACP are less looked after by developed countries than other states that are better off.

I am interested that the European Investment Bank is involved in this process—again, I apologise that I do not have in-depth knowledge in this area—but is that a relatively new involvement? The EIB’s particular expertise is in developed countries, particularly within member states and aspiring candidate member states. It is very good at infrastructural projects, in terms of large loans. In many ways, the expertise in development finance has moved across to the European Bank for Reconstruction and Development, which is concentrated in the former Soviet bloc states and eastern Europe. Would it be more appropriate if this institution, with its specialist knowledge in development, played more of a role here than the EIB, which has a more developed economy role?

My Lords, I am grateful for the support of those on both Benches opposite for these important orders. It is very good news that all around the House we support the general aim of poverty reduction and that we all acknowledge that poverty reduction measures have to be coupled with good governance.

A number of important points have been raised. It is clear that Europe is playing, and will continue to play, a major role in helping developing countries, particularly in Africa, to meet the challenges that they face. The noble Lord, Lord Dykes, cited the fact that the EU was a major player when it came to aid and development. The EC was the world’s third largest distributor of OD aid to developing countries in 2005, behind the US and Japan. Too often the EC receives too little acknowledgement of the work that it undertakes in developing countries.

The noble Lord, Lord Astor, asked about monitoring the aid to ensure that it gets to where it is meant to be and is not subverted because of corruption. The creation of Europe Aid has led to better aid management and decentralisation to more able and active EC delegations. As the noble Lord, Lord Dykes, said, it is important to have the technical expertise on the ground. Strengthening the EC delegations so that people on the ground work with the people who are disbursing the aid is the best way to ensure that the opportunities for corruption are limited. There is more to do to ensure that the systems are still reformed so that we can address the capacity reinforcement that is still necessary. We want an integrated approach to development co-operation, where policy and funding go hand in hand and good governance is the key to all these issues.

What does the EC do to ensure that its funds are not wasted? The annual accounts and resource management are overseen by its external auditor, the European Court of Auditors. The court’s main task is to provide the Council and the European Parliament with an external independent audit of the European Community’s annual accounts, including those of the development co-operation programme. If we are worried about certain situations, we raise them in management committees and in the Council. We follow everything up very closely.

The noble Lord asked to which countries funds were going to be given in the 10th replenishment. Discussions about the poverty reduction strategies of the individual ACP countries are under way; it is too early to say to which countries we will allocate money. However, it is clear that poverty is the key focus for low-income countries and Africa. More than 90 per cent of funding in the 10th replenishment fund will go to Africa and to low-income countries, which is in line with the United Kingdom’s own development and aid ethos.

The division between bilateral and multilateral is, again, still under discussion. I should think that a high proportion goes in bilateral aid, but if I am wrong I will inform noble Lords.

In response to the question about how DfID is helping to make EU aid more effective, we support the Commission in decentralising much of its programme. In 2002, when reforms were just beginning, only 24 per cent of the value of the European Development Fund portfolio was managed by delegations, but in 2006 that number had risen to 82 per cent. We support the Commission in all these reforms.

The noble Lord, Lord Dykes, asked about the millennium development goals and whether the EDF would assist in enabling countries to reach them. As I have stated, the main focus of the EDF is poverty reduction. We believe that lifting a country out of poverty is the best way to enable it to reach the millennium development goals. One focus of EDF money is on things such as access to clean water and education—things that will enable countries to prosper and reach the millennium development goals.

I agree that the EU-Africa summit is a very important occasion for discussions with Africa to improve our relationship and what is happening on the ground.

I was asked whether the World Trade Organisation and other global organisations should be modernised to ensure that they can meet the difficult trade challenges in today’s world. The Government are continually seeking to modernise institutions such as the UN and WTO to ensure that they are in better shape and can meet the challenges of the 21st century.

The noble Lord, Lord Teverson, asked whether the Government believe that the ACP is still an effective way of channelling aid and whether aid is distributed in the most appropriate way. It is very important to maintain the relationships with the countries in the ACP but not every ACP country receives the same proportion of aid. The countries that are the most needy and deserving receive the most money. It is not a “one size fits all” tool but an organisation in which we provide targeted aid so that we reach the parts that need to be reached.

I do not think that the European Investment Bank is an innovation. It has certainly been involved since the Cotonou agreement was made five years ago. Whether it was used under Lomé, I am not sure, but I will inform the noble Lord. The EIB is a useful tool, although I take on board the noble Lord’s comments that perhaps other EU entities might be more appropriate.

In conclusion, the Government believe that Europe has a key role to play in the international community’s efforts to eradicate poverty. The amended Cotonou agreement and the 10th EDF provide a valuable framework for Europe’s co-operation with the ACP states. I commend the order to the House.

On Question, Motion agreed to.