JOINT COMMITTEE ON FOREIGN AFFAIRS AND TRADE debate -
Wednesday, 7 Mar 2012

Irish Aid Policy and Funding Criteria for NGO Sector: Discussion

Chairman

The primary purpose of today's meeting is to deal with the funding and development of the NGO sector. I welcome Mr. Michael Gaffey, assistant secretary in the development co-operation division of the Department of Foreign Affairs and Trade. He is accompanied by Ms Fionnuala Gilsenan, director, and Ms Alison Milton, deputy director, of the development, education and civil society section, who also are very welcome.

Irish Aid, the Government aid programme administered by the Department of Foreign Affairs and Trade, supports a wide range of NGOs and their work in long-term development, humanitarian response and development education. An average of approximately 32% of the Department's annual international co-operation budget is channelled to NGOs. Almost €90 million, or just half of the aforementioned 32%, is channelled to Irish NGOs and missionaries for long-term development. Recently, the Department of Foreign Affairs and Trade has redesigned its system of funding allocation to NGOs to one based on a more performance-focused and result-orientated approach, which I believe to be both timely and welcome. Members of the joint committee are broadly highly supportive of the work of Irish development NGOs. Many members of the joint committee have seen this great work on the ground in the development programme countries and as recently as last November, a delegation of members visited Ethiopia. The committee also is aware of the good communication and close co-operation between the Department of Foreign Affairs and Trade and the NGO sector. Nevertheless, all systems must be reviewed, particularly in light of leaner budgets, and it is incumbent on the NGOs to reflect the effectiveness demanded of all funded sectors to provide consistent and transparent value for money. Irish Aid has a responsibility to ensure that each cent of Government funding channelled through the NGO sector is being used to good effect and can show positive outcomes.

The focus is now on the NGO sector. In other words, are NGOs equipped for the tasks in hand? Do they have the governance and accounting structures commensurate with their funding? What issues have the new funding allocation system brought to light? Are there weaknesses in the sector? Hopefully, Mr. Gaffey will cover all these questions this afternoon for the members of the joint committee. It is important for him to address the joint committee on the Department's policy and criteria for funding, as well as the development NGO sector through Irish Aid programmes.

Before inviting Mr. Gaffey to make his presentation this afternoon, I want to advise him that he is protected by absolute privilege in respect of utterances at this committee. However, if he is directed by the committee to cease making remarks on a particular matter and he continues to do so, he is entitled thereafter only to qualified privilege in respect of his remarks. He is directed that only comments and evidence in relation to the subject matter of this meeting are to be given. He is asked to respect the parliamentary practice to the effect that where possible, he should not criticise or make charges against any Member of either House of the Oireachtas, a person outside the Houses, or an official by name in such a way as to make him or her identifiable. I am sure Mr. Gaffey has gone through all that before now as a witness appearing at this committee and on other occasions. I welcome Mr. Gaffey and his officials to this committee meeting. I am looking forward to a good and progressive meeting. I now call on him to make his opening remarks.

Mr. Michael Gaffey

I wish to thank the Chairman and other members of the committee for the invitation to address this session. My colleagues and I look forward to answering any questions the committee may have, as well as discussing the important partnership between the Government and non-governmental sector in order to maximise Ireland's influence and impact in the fight against global poverty and hunger. I hope the presentation will not be too technical but there are various issues, to which the Chairman adverted, which we need to cover.

The first point to make is that Irish Aid is an integral part of the Department of Foreign Affairs and Trade, and that development policy and the development programme are central to Ireland's foreign policy. That is an important point to make before we start talking about this partnership. For many years, the Irish NGO sector has been a key partner for the aid programme. This partnership recognises the shared commitment to prioritising the fight against poverty and the agreement, which is supported strongly by the Irish public, that Ireland has an obligation and an interest in working to improve the lives of poor people and communities in the developing world.

Irish development agencies and charities, as well as individual volunteers, missionaries and aid workers, consistently receive strong support from the public, even at times of difficulty at home. The Government's aid programme recognises the significance of this support and, in turn, channels a higher proportion of its aid budget through NGOs than virtually any other international aid donor. It is just over 30% of the Irish Aid budget, amounting to €174 million in 2010. About €90 million of this went directly to Irish NGOs and missionaries for long-term development work. They also receive significant funding for emergency and humanitarian assistance as well as lesser amounts for development education.

The work of the NGOs is an important part of Ireland's overall contribution to development, and it is important to ensure that official and non-official assistance is complementary, and not competitive or overlapping. NGOs have a particular role to play through their direct access to vulnerable or excluded groups, their work at household level, their ability to provide assistance when circumstances in a country make structured intergovernmental relationships difficult, and of course, for their policy work at home and in developing countries.

NGOs involved in international development are independent, autonomous organisations. They have their own resources and corporate governance structures and are responsible for setting their strategic direction, ensuring transparency and sound management practice. When they receive official funding, Irish Aid's responsibility is to establish transparent criteria and standards on which funding decisions can be made.

Over the last decade, international thinking on aid effectiveness - and increasingly on the broader concept of development effectiveness - has challenged governments and NGOs alike to examine their ways of working. This has resulted in a rethink by NGOs of their role in service delivery, and the relationship with the Government role. Greater emphasis is now placed by NGOs in their long-term development work on partnership with local civil society organisations. It is widely understood that NGOs are not there to replace the role of the State but to act in a complementary manner to build capacity and achieve clear development results.

There is a long tradition in Ireland of missionaries and development workers engaging in development co-operation. It is sometimes a revelation for people to realise that this tradition is not matched in many other European countries. That tradition is probably one of the fundamental bases for the success of Ireland's aid programme. In the years to 2008, as the development co-operation budget increased, Irish Aid built strongly on this tradition. During this period, there was also a significant increase in the number of NGOs established in Ireland. Branches of international NGOs - such as Plan, Sightsavers and Voluntary Services Overseas - set up offices here, while smaller Irish-based charities emerged or grew substantially. Between 2000 and 2008, the range, volume and scope of NGO grants increased significantly. While this contributed to the development of the sector, some organisations developed high levels of dependency on Irish Aid funding.

In order to deal strategically with the larger more established organisations such as Concern, Trócaire and GOAL, multi-annual framework agreements were put in place from 2003, in order to provide predictable funding for multi-country, multi-sector programmes of long-term development work based on the organisations' strategic plans.

Mid-sized organisations, such as World Vision and Oxfam, also received grants on a multi-annual basis but tied to specific projects. In 2007-08, a further 18 organisations began to receive multi-annual grants on the same basis. They included Frontline, Aidlink, Vita and branches of international NGOs mentioned earlier. I am setting this out to give an idea of the range of funding and extent of partnerships with organisations that were developed in that period.

Between 2008 and 2011, Irish Aid carried out extensive monitoring of NGO partners' projects and programmes. Findings indicated that many NGO partners were implementing effective projects and programmes, delivering important services at the household and community level, and working with local civil society partners and governments. While there was much that was positive, there was also evidence of some missed opportunities. In some cases, NGOs were failing to plan adequately in the context of what others, including government, were delivering. In other cases, they were not targeting adequately to ensure that the most vulnerable were reached, and some became so focused on implementing activities that they were in danger of losing their strategic vision.

Overall, there was a general weakness in systems for tracking results and sustainable outcomes. This is not a criticism of the NGOs because this challenge was faced equally by the Government and all donors. It was a weakness which Irish Aid also had to recognise some years ago, and which has been addressed to the extent that Ireland is now recognised as a world leader in making aid more effective.

It was broadly recognised by the NGOs themselves and by Irish Aid that stronger planning and monitoring systems were needed to set out and track intended results. There was also general acknowledgement that effective programmes at local level need to be complemented by work to influence policy at national level.

We all recognise that in Irish Aid programme countries, our embassies and the NGOs working in the field constantly need to consult, co-ordinate and learn from each other, while recognising their distinct roles. Last year, presented an opportunity to act on these studies, reviews and evaluations. Most grant agreements were coming to an end in 2011. In consultation with the NGOs, Irish Aid concluded that a new approach to funding should promote stronger analysis at the developing country level, strategic decision-making on best use of resources, and a greater degree of clarity on intended results. Organisations were encouraged to clarify their added value and their specific development expertise in advance of the new programme cycle.

A stronger and more transparent basis for deciding the level of grant allocations was developed, taking into account organisational size, funding track record and the quality of the proposed programme of work. The first step in that process involved clarifying the eligibility criteria. This allowed Irish Aid to draw a clear distinction between organisations with a sufficient level of capacity suitable to programme funding and those which were more suited to funding for specific projects.

The new eligibility criteria require that organisations be based in Ireland - or, in exceptional cases, be invited to apply on the basis of their particular niche expertise - have a formal and established governance structure, audit their financial statements on an annual basis and place these accounts on their website. A further dependency criterion was established so that no NGO receiving programme or project funding would be more than 70% dependent on Irish Aid. This ratio will be reduced gradually over the coming years. In this programme funding round, none of the larger NGOs comes close to having such a ratio. It probably applies more to the smaller NGOs.

These criteria were set as the core criteria for all funding to NGOs. Two additional criteria were established for organisations wishing to be considered for long-term development programme funding. They focus on organisational size and a funding track record in the previous three years. Irish Aid applied the criteria to existing partners and invited 24 NGOs to apply for programme funding.

During 2011, a series of consultations was held with the NGO sector to discuss how new funding arrangements should be designed to ensure greater development effectiveness. Critical elements of effectiveness include the need to pay greater attention to context – that is, the political, economic and social situation in a country or region; the link with local actors, including government, civil society and private sector actors; a specific area of expertise; and the results to be achieved. These were translated into appraisal standards to be applied to funding applications.

The applications, or proposed programmes of work, were then appraised by teams of Irish Aid officials against a detailed set of standards. An external quality-assurance expert was appointed to review the process for consistency and fairness. This resulted in a set of recommendations to the Minister on the percentage of the available funding to be allocated to the 19 NGOs, amounting to a total of €65 million for 2012. Each NGO had an assessment resulting in the determination of the percentage of the €65 million it would receive this year. The grant allocations are performance based, but as this is the first cycle of these grants they are also linked proportionately to organisational size and previous grant record. This is so there will not be a totally new basis on which we fund organisations with a track record with Irish Aid. The performance element will, it is hoped, be increased in future rounds.

The Minister approved the allocation for programme funding at the beginning of February. Organisations are now developing detailed results frameworks and budgets so funding can be disbursed at the end of April. Irish Aid officials are meeting all the NGOs which applied for programme funding to provide oral and written feedback on the appraisal process. The percentage grant allocations will be applied again next year. There then will be a review of the performance element at the end of 2013 to determine whether grant allocations need to be adjusted for the remaining two years of the cycle, to the end of 2015.

This new funding model is in line with best practice internationally. It provides transparency. It enables Irish Aid and organisations to identify clear strengths and areas for development, and it enables us, together, to track improvements in capacity and delivery over time. This is all with a view to delivering sustainable development results for poor countries and communities.

In the coming weeks, a separate memorandum of understanding will be signed between each NGO and Irish Aid. It will include benchmarks on accountability and transparency where necessary. The new approach to funding aims to strengthen the results focus of the Irish Development NGOs, provide a framework for multi-annual programming and enhance the strategic focus of the programmes supported by Irish Aid. While, inevitably, every organisation will not be fully satisfied with the allocations provided, which allocations I will not elaborate on in this presentation, we can collectively take satisfaction from the collaborative effort that has resulted in a more transparent and effective partnership between the Government's aid programme - the people's aid programme - and the NGO sector in Ireland.

Those are my introductory remarks. The purpose of this session, however, is to hear from the members. We will do our best to answer their questions.

Chairman

I thank Mr. Gaffey for updating the committee on the new system. It is good to have heard the presentation. It will be a matter for the NGOs to plan, monitor and review what they are doing. It is good to hear there will be a mid-term review in 2013.

Deputy Pádraig Mac Lochlainn

I thank Mr. Gaffey. It is very useful to examine the criteria. Last night the Members of the Houses has had an opportunity to hear a presentation by Dóchas. It was a snapshot of its various projects and of the impact of its constituent members in the countries with which they are involved.

Now, more than ever, there is a need to defend the overseas aid budget. Mr. Gaffey referred to the unique approach Ireland has taken. Our NGOs and missionaries have led in this regard. The Irish Aid programme seeks to enhance this on behalf of the Irish people. It is clear that the overwhelming majority of Irish people are proud of their history in this area. It will become more critical than ever to defend the aid budget, tell the positive stories and demonstrate how the money is having the maximum impact.

A number of points we made to the NGOs were on practical examples of co-operation at country level. It is a matter of not having six or seven NGOs and various Government aid programmes duplicating work. I want to hear the delegation's thoughts on this. There is a need to demonstrate cohesion. Activity should not be replicated and activities should be complemented at country level. This will be critical.

I want to hear the delegation's views on the role of parliamentary oversight in both donor and partner countries. How can we involve Irish and partner country parliamentarians increasingly in respect of the Irish Aid programme? Donor countries have committees that co-operate and share perspectives and strategies. How can civil society be more central?

The background paper states the delegates will be visiting a number of the programme countries. What are the criteria? Will they visit all the programme countries to obtain a comprehensive overview? What is their approach? Will they tease out how they intend to approach the process?

The memorandum of understanding with the NGOs refers to communication using a range of media with the general public on the results achieved. Will the delegates be specific on this? What would be the expectations of the NGOs? What is the strategy on communicating achievements to the public and parliamentarians in Ireland? How do they intend to involve us in the process? Have they a strategy for discussing affairs in the Oireachtas through a partnership process including NGOs?

Let me refer to the contributors who make submissions on the review of the White Paper. I, on behalf of my party, will make a submission, and this committee will make a submission also. Do the delegates intend to revert to people on their submissions? People really feel they are making a difference when they make submissions. It is very important that they do not feel there is an outcome predetermined by the Department or the Government and that they believe there is scope for submissions to have an impact on the White Paper and the overall strategy.

Senator David Norris

I welcome Mr. Gaffey and his colleagues. I thank Mr. Gaffey for his very clear presentation. It was exceptionally useful because of its clarity and concision and it addressed exactly the issues that have concerned us over a number of years.

It is important for Ireland's reputation that it maintain the strongest possible support for Irish Aid. I say this in light of the fact that the name of the Department has changed from the Department of Foreign Affairs, which it was always called, to the Department of Foreign Affairs and Trade. That suggests a possible rebalancing of priorities. In that rebalancing aid to less fortunate areas of the globe and also the question of human rights must not be allowed to be sidelined. There is a terrible danger that this could happen particularly when this country is facing such a difficult economic period. All my colleagues would be at one on this. It is part of our resolve and duty as a committee to support the target of 0.7%, particularly because - I have made this point repeatedly including at previous versions of this committee - as the economy alters, the 0.7% alters in synchronisation, meaning we are always able to afford it. We must continue to aim for that.

I believe Mr. Gaffney also answered the question of co-ordination between the NGOs and local authorities, which is terribly important. It is very reassuring to hear that this is part of Irish Aid's criteria to work with people on the ground on that.

I was very pleased that Mr. Gaffney mentioned Frontline and other organisations. He used a phrase that attracts me, when he said: "NGOs have a particular role to play through their direct access to vulnerable or excluded groups". I wish I did not need to say this, but I am probably the only person who will. For that reason even though it might lead to me being pigeonholed again, I wish to say that among those marginalised and excluded groups, I hope gay people are included, particularly because along with front-liners, I met and had coffee with a young man named David Kato, who was subsequently murdered in Uganda simply because of his sexual orientation. The Irish missionaries - I have had experience of many of them - do remarkable work of which we can be proud. However, there are other primitive, allegedly Christian churches, from the United States of America, which do immense and inhuman damage in inciting hatred. I hope that sexual orientation will continue to be included specifically in those excluded and marginalised groups. I am sorry I have to say it because it could lead to further typecasting of me but I do not believe anybody else will say that.

I believe Mr. Gaffney's analysis is correct when he said they are not there to replace the role of the state. First, that is patronising and second, it also lets the state off the hook and engage in diverting moneys. It is much better to co-operate with local people thereby creating an organic society that can sustain itself. I applaud the Department in that regard. I declare an interest. Until I had to fight two elections simultaneously, I was on the board of Voluntary Service Overseas. I notice it was given a mention and then disappeared. In what category is that organisation? Does Mr. Gaffney wish to make any comment about its work? I do not seek to single it out except in the following sense. Owing to the recession here we have a large number of professionally qualified people in various areas - medical, construction etc. - who could be of very considerable interest to those countries. Is that being encouraged? It is an irony that we now have a resource and this temporary situation could mean that people who are well qualified would be able to contribute to other areas of the world and then come back.

I will make this final point as I do not wish to be too selfish and greedy - I express my gratitude to the Chairman for calling me. The very clear criteria laid down in terms of accountability for the expenditure of taxpayers' money are splendid. The media will always seek stories suggesting that taxpayers' money is being wasted on these undeserving people and spendthrift charities, while our people at home are being left high and dry. That is terrible begrudgery, but that is the defence. I noticed the emphasis on auditing of books, presentation of accounts, having performance-based grant allocations and so on. However, it is necessary to be somewhat delicate with anything that is performance based. In an effort to get performance some people may try to get statistical results, which do not have the kind of impact desired. That is the one criterion to which I would be sensitive. I greatly value the work the Irish Aid does.

Deputy Eric Byrne

I do not have much to say because having read this document it is clear to me that there has been a consultative process with the NGOs and the criteria have been worked out in conjunction with them. I wish to make some general observation. NGOs becoming dependent on Irish Aid would have been a severe weakness in the system. Irish Aid has noted that some organisations had high levels of dependence on Irish Aid funding. I find it remarkable that although we laud ourselves as being great funders of NGOs, they collect in the open field €100 million from the general public, which is substantially more than what we are contributing. I have not been on any missions to observe how Irish Aid is doing in the field but Ethiopia keeps coming into play. When people go to Ethiopia essentially on an Irish Aid monitoring mission, how do they discriminate between the aid being provided as being Irish Aid funded as against NGOs delivering on a programme that has been funded to a greater extent by private sources of funds from public collections?

I was terribly shocked and disturbed once when I was dealing with the very lovely citizens of Kurdistan who happened to be Muslim and their treatment by evangelical Christians from United States of America who had a terrible policy of enticement to get these people to gainful employment from these organisations on condition that they reneged from their religious beliefs. Does this policy consider those with whom our funded organisations collaborate, lest we collaborate with what to my mind are unsavoury agencies?

Is this approach separate from or complementary to the debate on the White Paper on Irish Aid? Does this agreement indicate that Irish Aid has been just ahead of the posse or is it deemed to be an integral part of the review of the White Paper?

Deputy Dan Neville

I welcome Mr. Gaffney, Ms Milton and Ms Gilsenan. As a Government Deputy, I fully agree with the absolute need and responsibility to protect the aid budget. In the lead-up to the budget we were very concerned that difficulty might arise, which would have been very negative and to say the least a very great disappointment to those of us interested in the area. Thankfully, while there were some reductions, it was modified to what some people may have anticipated or even forecasted. It is important to ensure that we protect our aid budget. We have a moral responsibility to our fellow human beings to do so. Those of us on the Government side saying this is as important as those on the Opposition side banging the drum.

My experience is that the committee is less protective and battles harder to ensure the aid budget, and works towards the international commitment to reaching the levels of GDP.

It is one thing to say one ensures accounts are audited, which is very important for NGOs, but as a development of this have governance standards been laid down? I have just left another meeting with Allied Irish Banks and we know all about auditing with regard to many organisations. It is very important, but so is governance. I am involved with another association and I have seen NGOs outside the area of Irish aid experience difficulties with governance which created problems. Public funding of one specific organisation was cut not because of how it was performing, but because of its governance.

Four of us attending the meeting were members of a delegation to Ethiopia. Difficulties arise there with regard to human rights and although prior to leaving we were informed about this, they did not come to my attention while I was there. I studied the matter after returning and learned about many specific cases. In its role of developing aid does Irish Aid try to influence, recognise or indicate any views of the Government and the Department of Foreign Affairs and Trade when dealing with foreign governments? We appreciate the level of aid to a country and a people should not be heavily influenced by human rights issues, but those issues should be part of the agenda when dealing with the governments and civil authorities of those countries.

My experience in Ethiopia was that aid was going to develop the capacity of the people as a long-term benefit rather than the immediate benefit of alleviating stress. It was pointed out to us by some people that Irish Aid had the most progressive approach of any organisation. In one case we were told about those from the most powerful country in the world who had a great deal of money and many volunteers who received much in expenses. They fed many people and did much for them, but after they cleared out there was nothing left other than the experience of their having been there and the benefit of that time. However, Irish Aid has a developmental and educational approach, which is why its work was evaluated as second best in the world after the World Bank. This is an international indication and is not stated often enough particularly when we hear critics who simply state aid should be cut by 75% while our people are in difficulty. Those of us in politics see this at the coalface every day of the week and not to lessen it but when one is in an African country one appreciates the vast difference in the human experience, opportunity and position.

I also found in Ethiopia positivity of people responding to the assistance given. This is also true in Eritrea which had many difficulties 20 years ago. It was most encouraging and brings me back to my initial point that we must keep the markers down in the protection of Irish overseas aid.

Deputy Maureen O’Sullivan

It is almost as if we had not left the committee room because so many of the same faces are here today as were here last night. The theme last night of the wonderful presentations was that aid works, not in a patronising way but in a real way. The point was made very forcefully that NGOs do not see aid as continuous and going on forever, but as something to do a job and then finish.

Senator Norris mentioned a marginalised group and I would like to mention another group, which is people with disabilities and mental health issues. Sometimes they get lost in the issue. Everything to do with aid is valuable whether we are looking at poverty, maternal mortality, water rights, population or land rights, but we sometimes lose sight of this particular group.

The document presented today is very comprehensive. It shows a very good way forward. I hope there is still room for these submissions to have an effect.

Some of us are concerned we might lose sight of the human rights issues because trade has been tagged on to the title of the Department. However, I do not think we can lose sight of human rights issues because they are central to everything Irish Aid does. Human rights issues are also raised with regard to trade. These are ethical issues and tax justice on which we must keep focused also.

There is a need for an extra dimension to capacity building for parliaments when it comes to dealing with multinational companies and foreign companies coming into African countries. We have had startling examples of very bad practice in Africa where certain companies brought in their own workers, paid lip-service to doing anything for the African country and took more than they gave. Perhaps we can play a role in assisting countries. I know we are in a difficult situation ourselves and we are not exactly leading by example but we have something to offer in this regard.

Senator Lorraine Higgins

I welcome Mr. Michael Gaffey, Ms Fionnuala Gilsenan and Ms Alison Milton and I thank Mr. Gaffey for his very succinct presentation at the outset of the meeting. Along with other committee members, during a recent visit of an Oireachtas delegation to Ethiopia I saw at first hand how effective Irish Aid has been there. It was very clear Irish Aid has an excellent reputation there. We are lauded for teaching people how to fish rather than giving fish. Given the challenging economic times we are in at present and the fact that ten of the largest NGOs receive €100 million annually from the general public, which is not an inconsiderable amount, has Irish Aid thought about assisting or advising on contingency plans if this figure drops? The quality of our overseas development aid would be affected which would undermine our aid effectiveness in the programme countries and make it very difficult for us to make an argument for the retention of overseas development aid at the current amount?

Senator Michael Mullins

I join in welcoming Mr. Michael Gaffey, Ms Fionnuala Gilsenan and Ms Alison Milton and thank them for a fine presentation which was very informative. As a new member of the committee, I am very much on a learning curve. I am trying to come to terms with the various issues that arise with regard to the Department of Foreign Affairs and Trade. I have not been on any of the fact-finding missions so I have not seen the wonderful work that is done. However, we can be sure that aid works. I am pleased that, even in difficult times, the Government has been able to protect the aid budget relatively well. Recently, I was involved in a number of church gate collections on Sundays where I marvelled at people's generosity. It is only right and fitting that the Government would mirror that generosity by ring-fencing the aid budget. We must marvel at the work of Irish missionaries and development workers. That good work is continuing through the various non-governmental organisations, NGOs.

Irish people and the media are conscious of the need for accountability and transparency. I am impressed by the separate memorandum of understanding to be signed by each NGO with Irish Aid. This will ensure transparency, benchmarking of results and accountability. In recent days, there has been negative publicity concerning the salaries and earnings of CEOs and leaders of charitable organisations and NGOs. Will our guests comment on this controversy? How can we achieve a situation in which there is total accountability and transparency among all organisations that are in receipt of Government moneys to pay salaries and bonuses as a whole or in combination with fund-raising and donations? Given that all of the money comes from the general public, transparency is important. I would be worried and saddened if the good work done by the many worthy organisations were damaged by a lack of accountability and transparency.

Chairman

I wanted to give Deputy Ó Fearghaíl a breather. He was late because he was attending another meeting. Now that he has been present for a while, he can ask the last question.

Deputy Seán Ó Fearghaíl

I will be brief, as the salient points have been made. I thank Mr. Gaffey and his colleagues for their paper and commend them on their work. I also commend the Chairman on the priority he has had the committee give to the question of Irish Aid. I hope it will continue during the lifetime of the committee. I am sure it will, given the Chairman's interest in the matter.

Senator David Norris

Well said.

Deputy Seán Ó Fearghaíl

Without repeating the points that have been made by many, the twin challenges of maintaining the level of aid and responding to the public and political demand for proper governance and transparency are critical to this situation. To address these challenges, Mr. Gaffey referred to a memorandum of understanding. This represents progress, but is it sufficient in itself or should we consider a formal legislative framework to ensure the public can have absolute confidence?

Senator David Norris

No.

Deputy Seán Ó Fearghaíl

Is it sufficient that we can continue in this manner?

Many of the committee members present attended the presentation facilitated by Dóchas yesterday evening. I hope it will be the first of many informal and formal presentations before our meetings. One of the challenges presenting is to begin to expose to the public at large the sustainability of the projects being funded in the developing world through the use of taxpayers' money. In this way, we can show that the generosity they have demonstrated through the years can be maintained. In turn, they will keep the pressure on us as political representatives to ensure the State does not fail in its moral responsibility to the poorest in the world.

Senator Mark Daly

I will not repeat others' comments. A number of charities raised a point at the Dóchas briefing, but I would like Mr. Gaffey's opinion on it in terms of the credibility of the NGO sector. Although there is a Charities Act, the regulations have not been put in place. The NGOs are concerned that the good name of and goodwill shown towards NGOs will be affected by any misappropriation of funds or illegal or inappropriate fund-raising by people portraying themselves as fund-raisers on behalf of Third World countries and people in the developing world. Such activity would lead to a scandal. The NGOs want the regulations to be commenced and everyone to know what they are. Any scandal as a result of a lack of regulation would affect the good will shown by the Irish towards the NGO sectors. Has the Department been asked by Dóchas and others to push the Government to ensure transparency and regulation as a result of the Charities Act?

Chairman

That completes our line of questioning. I invite Mr. Gaffey to respond.

Deputy Pádraig Mac Lochlainn

If I may, I wish to speak briefly. I failed to ask a question. Mr. Gaffey outlined funding of €174 million for NGOs in 2010. Given that €90 million went to Irish NGOs, €84 million went to international NGOs. Does the change in criteria to require an NGO to be based in Ireland mean the €84 million will be reallocated to Irish NGOs or will there be a drastic cut in the overall contribution?

Senator David Norris

May I make a brief comment?

Chairman

Please, we have many issues to address.

Senator David Norris

We should discuss Deputy Ó Fearghaíl's point on legislation. I would warn against imposing an inflexible situation. Each of us supported the Freedom of Information Act, but now Ministers cannot even discuss matters in Cabinet. It has gone haywire. One should be careful.

Chairman

I will ask a supplementary question. Recently, Irish Aid completed an audit of GOAL and made some recommendations on same. Has the NGO taken on board those recommendations? Mr. Gaffey has been asked many questions. I hope he has many answers.

Mr. Michael Gaffey

I hope so. If I miss any, the Chairman might remind me. I will answer the two final questions before reverting to the start.

Deputy Mac Lochlainn asked about the criterion on being based in Ireland. This relates to major programme and project funding and does not mean we will support only Irish NGOs. The balance will remain fairly similar. Irish NGOs received approximately €112 million or €115 million of the €174 million in 2010. Much of the remainder was emergency and humanitarian funding and funding in our programme countries, where we work with local NGOs. We are making a distinction in this round of programme funding. Where we are funding large programmes of long-term development work with large amounts of money, we are dealing with Irish NGOs. However, we have a strong programme of funding for other NGOs as well.

I expected the Chairman's question. There has been a great deal of publicity surrounding our relationship with GOAL. We have worked well with GOAL in recent weeks and months. The audit which was carried out was not only of GOAL but Concern, Trócaire and all others in receipt of long-term funding. The GOAL audit revealed a number of concerns about its corporate governance and the role of its board, which concerns were taken into account in the programme funding assessment and by the Minister of State, Deputy Costello, in his consideration of the recommendations.

We have in recent months and, in particular, weeks engaged directly with the new chairman and board of GOAL on governance issues and on the need to have a properly functioning board of directors. The board regarded the audit report as positive and a contribution towards what it is trying to do. As agreed recently with GOAL, the board has produced a new governance plan for the organisation. We, and the Minister, have accepted that plan and agreement has been reached on the release of €12.5 million in funding to GOAL under this programme funding round. The governance plan is in place and GOAL is working on implementing it. It has agreed to a review by Irish Aid at the end of this year of its progress in this regard and to measurement of it against the Dóchas code of corporate governance.

While GOAL is not a member of Dóchas it has agreed that its governance arrangements, based on the plan, will be reviewed against the Dóchas code of corporate governance and that funding decisions for next year will be taken on that basis. I believe this is a positive result in respect of which I pay tribute to GOAL. What was at times perceived in the media as an extremely difficult and almost confrontational situation has had a positive outcome. Irish Aid looks forward to working closely with GOAL this year in that regard.

Chairman

I thank Mr. Gaffey for updating us on that matter. It is good news.

Mr. Michael Gaffey

I will try now to address the many questions asked. Deputy MacLochlainn spoke about public communications and the need to build much stronger links with the Irish public, which we, too, believe is important. The Tánaiste and Minister of State have made clear to us that we have a duty, in promoting the aid programme, to speak ever more clearly to the Irish public about what we are doing and what is being achieved and to ensure parliamentary oversight, which is absolutely vital. While the Tánaiste and Minister of State are at all times available to parliamentarians they have made clear to us that we should engage directly with the Oireachtas. Officials in Irish Aid are open to whatever arrangements parliamentarians believe will work best in terms of examining and discussing any aspect of the programme. We are in Members' hands, as the representatives of the Irish people. We are available at all times to work with Members by way of appearance before committees or privately for briefings. We will be, as directed by the Tánaiste and Minister of State, adopting that approach.

Equally important is the role of parliaments in our partner countries. The most important way of ensuring transparency and accountability of our aid in our programme countries, in particular when working with governments, is to ensure a strong role for parliament and civil society. These are integral elements of our programme. We were in Malawi last week with the Minister of State, Deputy Costello and two members of the expert advisory group, which is chaired by former Minister, Nora Owen for a regional African consultation on the White Paper review. One of the main issues which arose during that visit was the need to maintain our focus on building up transparency and accountability in our programme countries and working with civil society on issues other than the delivery of services, including policy and the role of parliament.

During that visit, the Minister of State, Deputy Costello, had a lengthy meeting with the foreign Minister of Malawi, Mr. Peter Mutharika. Concern has been expressed in regard to the role of civil society in Malawi and Ethiopia. Serious concern has also been expressed about the rights of gay people in Malawi. A large part of the discussion with Mr. Mutharika was on the issue of human rights and gay rights, as was the case when former Minister of State at the Department of Foreign Affairs and Trade, Deputy O'Sullivan, visited Malawi last year. Human rights is also an issue for discussion when we go to Uganda. Due to the record of our development programme and the non-paternalistic manner in which Ireland works at government and NGO level with communities and governments people are willing to discuss with us sensitive issues which they might not be prepared to discuss with others. The extent to which we can influence change is somewhat different. I can assure the committee that human and political rights issues are not ignored in any of our engagements.

Deputy Maureen O’Sullivan

I should have mentioned earlier that I am a member of the Association of European Parliamentarians with Africa, AWEPA, which has had discussions with Irish Aid. It is important to stress that AWEPA works with Irish Aid and the partners countries in ensuring parliamentary oversight in this area.

Deputy Eric Byrne

Has Malawi's severe discrimination against Mormons been addressed?

Chairman

I will allow some time for Members to ask supplementaries later. I would like at this stage to hear Mr. Gaffey's response to the questions already asked.

Mr. Michael Gaffey

Against Mormons?

Deputy Eric Byrne

Yes.

Chairman

Please allow Mr. Gaffey to continue without interruption.

Deputy Eric Byrne

It may not have been Mormons.

Mr. Michael Gaffey

In response to Deputy O'Sullivan, I have a note on Irish Aid's engagement with AWEPA. The Irish branch of AWEPA and AWEPA internationally is important to us.

A number of points were made in regard to the White Paper review. What we have done in terms of NGO funding is separate from the Irish Aid White Paper review. We have a new programme cycle coming up and wanted to ensure we implemented a more transparent way of funding. All aspects of the aid programme are open to review. We would hope that the review will be concluded by September. There is an intensive serious of consultations under way with the public. We are having more consultations that we expected. Two public meetings have been held and two further meetings will be held, one in Dublin and one in Sligo. We are also having consultation with business and parliaments and are organising a consultation with the new communities in Dublin and Limerick, who want to make their views known. We are open to maximum consultation. There is no done deal in terms of the review. I can assure the committee that there is text waiting and ready. It might be easier for us if that were the case but it is not. We are engaging in a strong consultation process. We welcome engagement. As I said earlier, we are open to any arrangements which the Oireachtas would like to put in place in this regard.

I will ask Ms Gilsenan and Ms Milton to outline to the committee how we monitor the plan, which is an important issue. I hope I have made clear that the model we have been implementing is a work in progress, with lessons to learn. One does not get this right the first time. We will need to learn of the NGO's experience to it and to learn from our own experience of it.

I have already addressed the point made by Senator Norris in regard to the need to maintain public support. We recognise that we have an obligation to talk in clear, comprehensible language to the Irish people about what the aid programme is doing and to demonstrate what it is achieving. As many Deputies and Senators have said today, aid is working but we cannot assume that people know or believe that. We need to be able to show that sustainable results are being achieved. Concern has been expressed about the changing of the name of the Department of Foreign Affairs to the Department of Foreign Affairs and Trade.

Working in the Department, we welcome the broader departmental role and what the Department of Foreign Affairs and Trade can do in its embassies for Ireland. It has had no impact whatever on the aid programme, which should be clear. The Minister of State, Deputy Costello, was at great pains to indicate in Malawi our aid remains untithed. It is the firm intention of the Government that resources are not and will not be diverted from the aid programme for the trade role of the Department. It is a challenge to the Department to develop a stronger role in trade promotion, which is welcomed by the Department. In the development co-operation division and with the aid role, the only way we look at trade is the broader definition in the way of development.

The Chairman attended the Busan forum on aid effectiveness, which focused a little more on development effectiveness. What is development? It is not just a technical issue of aid being targeted to the right people in the right way. What role does aid play in the development of a country, as development involves political, social, cultural and economic aspects? Aid is only a small portion of that. We want to encourage in our partner countries their ability to drive their own aid, both through empowering them and also through encouraging them to develop their own financial resources. That is where we work in developing tax systems and fighting corruption.

It is also recognised when we go to partner countries that Ireland has a very strong role in development, with good political relations. Nevertheless, why are more Irish people not trading with these countries, and why is the economic relationship weaker? That is a different dimension and it would not affect the aid programme but as countries develop, it is clear that trade relations should develop. If we are successful with our aid, we will help countries move to the point where they seek to trade with us and Irish investors and traders will seek to trade with those countries. It is only in that context of natural development that we would talk about trade.

We have one programme country, Vietnam, which is a good place for us to learn. Through the amazing efforts of its people, much of the population has brought itself to lower middle income status and, increasingly, Ireland's relations are moving from a traditional aid relationship to a trading relationship. We still have an aid programme in that country of approximately €12 million per year, which is very firmly focused on some of the poorest and most marginalised communities.

Senator Norris also mentioned VSO and although I only brought it up once, it has not disappeared and it is part of the funding round. The Senator made a point about the availability of retired health, public service and education workers, for example, to help or volunteer in developing countries. The Minister of State, Deputy Costello, has made this point strongly in recent weeks and we have been in contact with VSO and other volunteer organisations to see if we can develop something more effective in harnessing the existing resource. The organisation is aware that we are in touch on the issue and the Minister of State, Deputy Costello, is pushing it quite strongly.

Senator Norris made another point about the performance aspect and that it could be that some organisations would focus on statistics, acting in a way that is more easily measured and which appears more favourably in results. We take that point as over the past few years there has, internationally, been a stronger focus on results. In some places and cases, those results have a tendency to have figures where they do not exist. In other words, there may be a focus on what may be called the "easy wins". It is good to be able to quantify the number of children receiving vaccinations but it is equally important to ensure there is a focus on development results for those children when they are vaccinated and should not die of terrible illnesses. There is a question of how to measure the education received and the opportunities to participate in society. The concept of development results and performance is much broader than just a statistic and a number. We must be clear on that, as the NGOs have been. Some of them were initially concerned that we were too heavily based in numbers. I can give an assurance that such a position is not our intention and Ireland has argued against any such approach at the international level.

Deputy Eric Byrne was worried about organisations we fund that may be working with proselytising groups or groups that may be pushing people to change their way of life. It is important, when working with an NGO, to fully engage with that NGO on its plans and the nature of its work. This model is making that approach of setting standards for the work of ourselves and NGOs more systematic. This ensures that we are not just providing checks but that we are engaging in planning, strategy and the partners. Likewise, there is an obligation on Irish Aid to ensure the partners we work with are fully in agreement with the strategic approach we are taking.

Deputy Eric Byrne

For the record, I mentioned the Mormons but I was incorrect. I meant to mention Jehovah's Witnesses, who because of their failure to stand for national anthems etc. were very viciously persecuted.

Chairman

I will give the Deputy a chance afterwards to clarify.

Mr. Michael Gaffey

Deputy Neville asked a very important question, which I touched on, about governance standards. The important aspect here is that we are setting standards but Irish Aid is not alone in doing so for NGOs. Dóchas has played a really important role in the development of this code of corporate governance, and NGOs must make a statement on their compliance with this code in the audited accounts. That Dóchas code of corporate governance has been a very important development for the sector as a whole and as I mentioned at the start, it is extremely positive that the discussions we had with representatives from GOAL resulted in an agreement to review their own governance plans against the code of corporate governance. It is important to note that sometimes it could seem that people might be more worried about the minutes of board meetings rather than the saving of lives on the ground. The important point that we all understand in Ireland today is the role of boards of directors and corporate governance in ensuring the effectiveness of organisations.

Deputy Neville asked about raising human rights issues and that is an important element in our discussions with partner governments. I believe they listen to us and when the committee members went to Ethiopia, their long meeting with Prime Minister Meles reflected the respect with which Ireland is treated and the readiness to listen to our views.

There was also a question from Senator Mullins on the salaries of chief executive officers. This relates to recent issues in the newspapers concerning a different sector. It also links to Senator Daly's remark on regulation, as there is an Act but regulation is not yet in place. Generally, self-regulation is very important, and even where regulations are not in place, it is important that Irish Aid works with NGOs to set standards and ensure there is self-regulation. That would be of direct interest to the public as if the public gives Irish NGOs €100 million per year from their own pockets at a time of significant difficulty, it is incumbent on Irish Aid to ensure we are open and NGOs would feel the same way. That is where the salaries issue arises. Nobody is suggesting there are CEOs in Irish NGOs who are receiving vast salaries but the issue is of concern to the public.

A number of the larger partner organisations, including Concern, Trócaire and GOAL, reveal salary scales of senior staff in audited accounts, which is very important. In the absence of clear regulation here, the financial and reporting method used comes from the SORP, or the UK statement of recommended practice, which is a type of audit practice. This is very positive but this is not applied by all NGOs. Irish Aid has used this round to examine these issues, in particular, NGOs were asked to provide us with the percentage spend on staff costs, the ratio of support costs to programme costs and we requested information on the number of staff in each applicant organisation earning more than €70,000. It is not that we want to focus on how much people are earning as this is really a matter for the board but the public want to know how much public servants earn and they want to know how those engaging broadly in public service are earning. In the coming programme cycle, in partnership with Dóchas, Irish Aid is planning to ensure that all partners in receipt of this funding meet a standard of financial reporting and accountability which will include a commitment to set out in their audited statements the number of employees whose salaries fall within each band of €10,000 above the threshold of €70,000, this to be included in their audited accounts by the end of each financial year. This commitment will be set out in the memorandum of understanding to be signed with the partners in the coming months. It will be possible, therefore, without any great trauma, to ensure that this issue is addressed and that the public are reassured. There is no suggestion of any need for worry but everyone recognises that this reassurance can be provided.

Deputy O'Sullivan made a very important point about the fact that Dóchas attended the committee last night and that we are meeting the committee. From the point of view of those working in Irish Aid both at home and abroad, it is very important to have maximum parliamentary involvement in the programme, not just in terms of visits to the programme - which are crucial - but also with regard to discussion and policy, discussion and practice and our readiness to answer any question as this is essential for our communications with the public. I think I answered the question on trade and I hope it will allay concerns that the trade promotion function or title added to the Department will not undermine the aid programme but in fact is a positive factor.

Senator Higgins asked about contingency planning. This sum of €100 million is a remarkable amount of money being provided to NGOs from the Irish public at this time. We have contingency plans in place in case this should decrease. We work with the NGOs on the issue of risk management as this is crucial. Risk management is often regarded as one of those form-filling box-ticking exercises but on the contrary there is a real need for risk management processes and they are being undertaken. The biggest job we can do in trying to avert risk is to communicate more effectively with the public as to the importance of development aid, how it is working and how it is not just something which Irish people think of as a moral obligation but rather that it is actually in the interests of Ireland and the Irish people. We are a small open economy in a very fast-developing world with increasing global challenges. People might understand that we cannot afford not to work with developing countries. Apart from risk management and dealing with what might happen, the most important aspect is to be more strategic about communicating with the public about why development is not just the right thing to do but that it is in our interests.

Deputy Ó Fearghaíl asked whether the memoranda of understanding are sufficient and whether a legislative framework is required. This is probably an issue which Members of the Oireachtas may wish to discuss but in my view, Irish Aid is working collaboratively with the NGOs, working by agreement to ensure that we are all meeting higher standards and that is probably the best way to go.

I refer to Senator Daly's point about the NGO sector which I have answered, along with the two final questions. The most important point I wish to emphasise is how much Irish Aid welcomes the engagement of the Oireachtas. We are officials and servants of the State and any arrangements which the Oireachtas Members wish us to put in place we are happy to do so because it is in the interests of the Department and of the programme. I ask Ms Gilsenan and Ms Milton to speak about how the programme is to be monitored in the coming years.

Ms Fionnuala Gilsenan

Members were interested in understanding better how NGO programmes will engage with the programmes administered by the embassies. We envisage many opportunities for possible co-operation and the synergies and cohesion to be achieved in this regard. This policy is at the forefront of our request to the NGOs to set out their work programmes as per the national development plans and the broader national public expenditure plans so that they regard themselves as actors on the national stage as well as at local level. The Department also works in the same way and we set out to the embassies the results we hope to achieve at their level. When we visit the programme countries we want to identify common sets of objectives and results as between us and the NGOs. We decide how we can develop strategies to enhance the desired results. Much of the initial monitoring work will be looking at opportunities for closer collaboration with the embassy programmes and the NGO programmes. In the first instance, we will examine NGO programmes which have received substantial investment, which are the larger NGOs, and then move on to examine the smaller NGOs. We hope to visit at least once or twice during the four-year programme cycle each of the programmes funded under this programme. This is a broad description of our approach.

Ms Alison Milton

Deputy Byrne asked about our monitoring trips to Ethiopia, for example. He asked if we visit the Irish Aid-funded programme exclusively. We examine the programme strategy of the NGO in that country, the whole programme. We generally have a good overview of the context by talking to a number of different people involved in politics or in human rights. We consider the work of other NGOs in the same country. A number of members raised the issue of co-ordination between the NGOs. We generally meet all of our NGO partners in that country and compare their various programmes. We ask our partners to define their role compared with other NGOs. We use the monitoring trips to test the results we have agreed through the memorandum of understanding and also to gather evidence. It comes back to the point about communication in the aid programme. We use these trips to gather evidence about what is working well and we communicate this information back to the staff.

Deputy Eric Byrne

I have a question about the Jehovahs Witnesses in Malawi.

Chairman

I thank the delegates-----

Deputy Eric Byrne

I have asked a serious question, Chairman.

Chairman

I will let the Deputy have his say in the end.

Mr. Michael Gaffey

We will come back to the Deputy on that point.

Deputy Eric Byrne

Has the issue been resolved?

Mr. Michael Gaffey

No, I would not say it is resolved. I admit I do not know. I will check out that information for the Deputy.

Deputy Eric Byrne

Perhaps I am going back too far to Hastings Banda's day.

Mr. Michael Gaffey

Perhaps it goes back to Hastings Banda's day but I will have a word with our ambassador on that point.

Deputy Eric Byrne

It was a very serious problem.

Chairman

I thank Mr. Gaffey, Ms Milton and Ms Gilsenan for attending the committee today to outline the new system of allocating Irish Aid funding. The mid-term review is an interesting development and they will see for themselves at first hand its effectiveness. Many people in Ireland are rightly proud of our development aid programme and the NGO sector. It is important that it is working effectively and transparently. While some issues need to be tackled and which the Department will tackle, there is no point in being nostalgic about particular organisations. This work of Irish Aid is too important and I speak for the committee when I say that funding should be directed at the organisations which are professional in their internal structures and effective in delivering results because this is the aim. There are many good world-class Irish NGOs which meet these standards. I commend Irish Aid for its proactive role in ensuring that Ireland's aid programme remains a world leader. That was brought home to us in Busan at the fourth high level forum on aid effectiveness, which I attended. Everyone commended the work done by Irish Aid, particularly at the parliamentarian programme I attended. I thank the witnesses for attending and updating committee members on the new programme. We look forward to working closely with you. Hopefully, we will travel to another programme country later in the year to see at first hand the valuable work done by Irish Aid and the NGOs. It is important to emphasise the work done by NGOs. I note the presence of the head of Dóchas in the Visitors Gallery. I commend him on the meeting yesterday evening, which was very informative.

The joint committee went into private session at 4 p.m., suspended at 4.20 p.m. and resumed in public session at 5.35 p.m.