SELECT COMMITTEE ON EUROPEAN AFFAIRS debate -
Wednesday, 21 Feb 2007

European Development Fund: Motion.

Chairman

I welcome the Minister of State at the Department of Foreign Affairs with special responsibility for overseas development and human rights, Deputy Conor Lenihan, and his officials to our meeting for the purpose of assisting our consideration of this motion. I also thank the Department for providing briefing material in advance. It has been circulated to members. The motion was referred to the select committee by the Dáil on 13 February 2007 and reads as follows:

That the proposal that Dáil Éireann, approves the ratification by Ireland of the Internal Agreement concerning the 10th European Development Fund, signed in Brussels on 17 July, 2006, which was laid before Dáil Éireann on 5 February, 2007, be referred to the Select Committee on European Affairs, in accordance with paragraph (1) of the Orders of Reference of that Committee, which, not later than 6 March, 2007, shall send a message to the Dáil in the manner prescribed in Standing Order 85, and Standing Order 84(2) shall accordingly apply.

Minister of State at the Department of Foreign Affairs (Mr. C. Lenihan)

I thank the Chairman and the committee members for affording me the opportunity to meet them to discuss the Dáil motion regarding the internal agreement relating to the tenth European Development Fund, EDF.

At the launch of the White Paper on Irish Aid in September 2006, the Taoiseach spoke about the thousands of children who die every day from easily preventable diseases and of the millions who go to bed hungry every night. The European Union is the largest single development assistance donor in the world. Together the member states and the European Commission provide more than half of the total global development assistance given to the developing world.

The EDF is a key instrument in the struggle to improve the appalling conditions in which so many people live. It is the primary instrument for development co-operation between the states of Africa, the Caribbean and the Pacific, the ACP countries, and the European Community. The main purpose of the EDF is to promote economic and social development in the ACP states. It consists of several instruments, including grants, risk capital and loans to the private sector. It provides support for economic partnership agreements and sectoral policies and reforms in areas such as education, health and transport. Other areas of support include institutional development and capacity building, debt relief and balance of payments problems, technical co-operation programmes and humanitarian and emergency assistance.

Each EDF is concluded for a period of five years and is financed through direct contributions from EU member states. The ninth EDF will run to the end of 2007, while the tenth will run from 2008 to 2013, and has already allocated €22.682 billion for co-operation with ACP states. Ireland's total contribution to the tenth EDF will be approximately €206.4 million. Our previous contribution was €85 million and our rising contribution, which begins this year, reflects the growing wealth here and the rising levels of GNP.

In line with our Irish Aid commitment to the poorest of the poor, a high proportion of this aid goes to least developed countries and almost half of all ACP states are classified as least developed. The internal agreement concerning the tenth EDF, copies of which were laid before the Dáil some weeks ago, is the subject of the motion under scrutiny this afternoon. It arises because the Minister for Foreign Affairs signed the internal agreement on behalf of Ireland in Brussels last year, but the agreement now requires to be ratified. The internal agreement lays down procedures for the allocation of funds and for contributions from member states to those funds. It is one of the better funds because our Irish Aid officials and diplomats from the Department of Foreign Affairs sit every six weeks to monitor the operation of the fund in a formal committee session in Brussels.

The internal agreement lays down procedures for the allocation of funds and for contributions by member states to those funds. Article 29.5.2 of the Constitution requires Dáil approval before ratification of the charge on public funds entailed by the tenth EDF can be notified. I propose that the committee approve this so that the motion can now be referred to the Dáil. If members have any questions, I shall be delighted to answer them.

Ms Sexton

I thank the Minister of State for his contribution. Everybody would support Ireland's ratification of the internal agreement of the European Development Fund. Deputies have probably received representations from Concern about the way in which the European Union implements the EDF. Should we insist that the model we use for our overseas development aid, which is universally accepted as a fair and measured system for the distribution of aid, should be a priority for the European Union? There is concern about the three bones of contention in the aid. We may need to be more involved.

The Minister of State may also have received communications from Concern. The three principles of paramount importance to the programme, the ownership, participation and prioritising of people's needs and rights, might not coincide with our view. We need to ensure that the ownership and participation refers to the countries receiving the aid and not as something imposed by the European Community.

Mr. C. Lenihan

Deputy Sexton is absolutely correct. My officials and I have made Concern's points directly to the European Commissioner, Mr. Mandelson, who is primarily responsible for the negotiation of these economic partnership agreements or instruments and we are consistently in line with Concern's points about local ownership and partnership. We favour ratification and consultation and hope that perhaps by the end of the year we will get these agreements up and running.

I have spoken to Mr. Mandelson at various meetings we have attended in Leeds, Brussels and elsewhere. He is committed to the view that these are primarily development and not economic instruments. We have concerns about the lack of consultation which we have expressed at European ministerial meetings as well. Consultation was somewhat patchy at the beginning but has improved as the deadline approaches and there is evidence that many of the African countries which were somewhat sceptical at the beginning are now engaged in the discussions. The Caribbean countries will have their review in January and the west and central African groups will make the end of year target for signing up and engaging with these instruments. The Pacific group is quite active too and is coming here on 23 March when I will consult them directly. The southern African states are the back markers in this train of engagement but hopefully they will sign off too in time. Whatever might be said about Mr. Mandelson in trade matters, and I know him from my own days as a member of the British Labour Party, he supports and is committed to the development aspect of these EPAs.

Deputy Ó Snodaigh

These concerns have been raised by several groups and some of the countries forced into these negotiations and agreements. There are extreme disparities between the strength and wealth of the European Union and the countries trying to create a better economy and standard of living for themselves. There are major problems among farmers and producers who are forced into direct and unfair competition with the efficient and highly subsidised markets, or production in the European Union and other areas. These trade agreements are forced upon African nations, in particular.

Although the Minister of State says that some of these problems are taken on board and some of the African countries are happier, it does not mean this is an ideal situation. These countries risk losing control of public services and their economies because of these trade agreements. Not enough has been done to ensure that the ACP countries negotiating with the European Union have got the best deal. Ireland should try to force a better deal rather than row in behind the European Union and agree with a deal that is not the best possible in the long term for these countries.

Mr. C. Lenihan

I wholeheartedly agree with Deputy Ó Snodaigh's sentiments. We are strongly pushing and urging the Commission to go around the right path with regard to least developed countries, particularly in respect of these discussions. Deputy Ó Snodaigh may have different views on Mr. Mandelson's time in Northern Ireland but in this respect we find that he conducts the discussions well and is receptive to the views expressed not by us alone, but also by Concern and other European NGOs or civil society groups.

When we talk about people being forced into new trading relationships or liberalised regimes, the regime of preference that has existed for the past 25 years has done very little to assist African countries to trade into the wealthy developed countries, including the wealthy developed bloc of the European Union. One cannot but be disappointed that, even with open quota-free access, there is an absence of significant trading from Africa into the EU. The primary purpose of the EPA instrument is to facilitate regional integration in Africa in much the same way Ireland successfully exploited EU trade and investment through its EU membership. We are committed to ensuring the right results are achieved. There is a timeline and delay is of no assistance to these developing countries.

The EU made a significant commitment of €2 billion for aid-for-trade measures at the Hong Kong world trade talks. The aim of these measures is to provide and facilitate funding and finance that will allow developing countries to step up to the platform where they can trade with developed country markets like ours. That is a priority in the aid programme. In the White Paper we indicated that we will be funding the Tradelinks organisation which will be about facilitating and assisting investment from Ireland in the developing countries where we operate. I share Deputy Ó Snodaigh's concerns on this matter.

Mr. Allen

The Minister of State said the Commissioner is tuned into the key principles of participation ownership. Why then did the Commissioner reject the results of the consultation process on Jamaica? That is not hard evidence of the Commissioner accepting the principle of ownership.

Mr. C. Lenihan

I am not aware of that situation with regard to Jamaica. I will investigate this matter and return to the Deputy on it.

I met several Jamaican Ministers last summer who expressed concern about the consultation process. That pattern has reoccurred with some African countries which initially were taken aback at the process.

Mr. Allen

We cannot accept the Minister of State's assessment that the Commissioner, Mr. Peter Mandelson, is enthusiastic about these key principles when he has not adopted the principle of ownership in participatory states.

Mr. C. Lenihan

That was my personal observation about the Commissioner, Mr. Mandelson. The Deputy is free to contradict my assertion. It is still my view that broadly speaking the Commissioner is supportive and keen to hear the views of member states involved in this. Like all of us, he is not perfect.

Mr. Allen

For our own information, will the Minister of State send the committee a note on the Jamaican consultation process?

Mr. C. Lenihan

Last summer when I met the Jamaican Minister for Finance, he argued that many African finance Ministers found the consultation process heavily bureaucratic, complicated and somewhat intimidating. The Caribbean countries are moving ahead of other regional blocs with regard to the EPAs. While Jamaica may have had difficulties with the consultation process, it is part of the advanced group signing up for the EPAs. The overall context would belie the suggestion that Jamaica has serious concerns about the instrument.

Mr. Allen

Based on the principle of ownership, is the Minister of State satisfied there was real dialogue between the participant countries or was it a case of just going through the motions?

Mr. C. Lenihan

There was real dialogue because at the beginning there were concerns about the process itself and the consultation. Ireland operates in eight programme countries, six of which are in sub-Saharan Africa. I had extensive meetings at the Hong Kong trade talks with Ministers from these countries on the subject of the EPAs. Irish Aid officials, who work in our missions in the programme countries, are heavily involved in this consultation process. A great number of these officials have been of practical assistance to the country partners. As a European donor we assist officials from the developing countries who negotiate these instruments. This hands-on approach assists these developing countries with poor administrative resources because the EU has its own way of working. It can often be intimidating, even for member states, to negotiate with it.

Proinsias De Rossa, MEP

The EU has its own way of working and we are all part of it. In March 2006, the European Parliament expressed concern over the ceiling the Council had placed on the amount of funding for the EDF until 2015. It believed it could result in an actual fall in the amount of money being spent by the Commission. It was estimated it could fall from 19% to 14%. The ceiling had been placed at 0.028% of member states' gross domestic product.

Given that various commitments have been made to increase Irish overseas development aid, will the proportion of our expenditure for the EDF be increased? Bearing in mind there are member states' bilateral aid programmes and the EDF programmes, what level of co-ordination does the Commission undertake? Clearly, funds could be lost or efforts wasted if there was not some coherence between the two sets of programmes.

I ask that we ensure, in so far as East Timor or any other state might accede to the Cotonou Agreement, that new money would be provided and that it would not be a question of spreading more thinly the resources already made available. We constantly get bombarded with promises by member states that they or the Commission will do X and Y. We then find that while they may do what they say, they take money intended for the millennium development goals or some other area, which results in progress being much slower than anticipated because of the failure to provide adequate resources. Those are the main points I wanted to raise.

While acknowledging that virtually all states have agreed to increase their aid, the Parliament is concerned that states will increase bilateral aid rather than ensuring there is also an increase in what the Commission can do. The Commission, representing the Union, can perhaps be more effective than the bits and pieces done by the member states, although this is not in any way to denigrate what Ireland or any other member state is doing in this area.

Mr. C. Lenihan

Just so we are clear on the overarching figures, 20% of what Europe contributes comes from the Commission. When one talks about the EU generally, the Commission and the member states make up the largest donor group in the world, providing 55% of all overseas development assistance. There is an 80%-20% breakdown between the EU as an institution and the member states, including Ireland, as bilateral donors. That gives a sense of the power we have with regard to change and reform of the way the European Development Fund works.

The good news is that the EDF is increasing greatly, with €22 billion of the fund allocated for ACP countries under this tenth EDF. That is an extraordinary sum and reflects growing levels of gross national product within the eurozone and Europe generally. While I take on board the concerns Mr. De Rossa expressed about the ceiling, our experience to date of the EDF — this is a point of criticism with regard to the fund as an instrument — is that funds are often not disbursed. In that context, we would be less concerned about the ceiling and more concerned, as a bilateral donor and as one who contributes to the EDF as a member country, that we would increase its operational efficiency so that moneys allocated to the EDF for the benefit of the Cotonou countries would be disbursed. That is the most significant issue for us with regard to the fund.

With regard to how much we are giving, the good news is we are increasing the amount. The bad news, if that is how I should term it, is that we have no choice in that matter because of our wealth. It is an assessed contribution, not one we can voluntarily decide to decrease or increase. The contribution is based on the level of GNP, the wealth generated in this country. As Mr. De Rossa will be aware, because of the fantastically strong Government that has been provided for the past ten years, our contribution is increasing.

Mr. De Rossa's point on co-ordination is a significant one. We are very concerned about the interplay and co-ordination of EU and member state funding for development purposes. We are a signatory, through the OECD, of the Paris declaration on aid effectiveness. This is a significant issue. For the first time in living memory, the European Union particularly but also many of the developed countries within the OECD is making serious individual commitments to achieving the 0.7% target by 2012, as is Ireland. This will involve substantial increases in the level of ODA in the coming ten or 20 years. With that, there is a parallel concern that has existed for many years with regard to how effective aid can be.

The German Presidency, through its Minister for Economic Co-operation and Development, Ms Heidemarie Wieczorek-Zeul, has expressed this to be one of the major priorities for her during that Presidency. She wants to see much greater co-ordination and effectiveness between the Commission and bilateral donors but also among the bilateral donors. Ireland has led this process in a practical way. We are part of a process on the ground, particularly in Zambia where we began what is called harmonisation in practice. This is where certain countries take the lead with regard to funding in a particular country. For example, if the country was Lesotho, we might take the lead with regard to health issues while the other donors present would in a sense submerge their desire to be leaders with regard to health issues in that country and would be placed under our leadership role. This is increasingly happening locally. We are also piloting such an initiative in Vietnam. The issue is about pooling funds and co-ordinating our action rather than having duplication or waste because several donors are working on their own account.

East Timor is a programme country for Irish Aid and we are very committed to helping it, notwithstanding its major difficulties in the past year or two. I am personally friendly with Mr. Ramos Horta, to whom I spoke quite recently. He has asked us for support, especially with civil and security issues concerning the law courts and their administration. We are delighted to be of assistance in this regard.

Will Mr. De Rossa refresh my memory on his last question? Did he express a concern that the Commission would not increase its funding while the member states did so?

Proinsias De Rossa, MEP

There is a range of commitments by the member states to increase their aid commitments independently. By placing a ceiling on the proportion of GDP that will be allocated to the Commission, the fear is that this will result in a significant growth in bilateral aid and a relative shrinkage of the EDF in terms of the total portion of GDP spent on aid. It is our view, in the Parliament, that this would be a negative development. While I am making that point, does the Minister of State have the figure for the Commission in terms of the amount of unspent funds that arise from year to year with regard to the EDF?

Mr. C. Lenihan

I will try to find those figures and provide them to Mr. De Rossa. It is a significant issue and a point of criticism we have made directly to Commissioner Michel at various times, even with regard to the tsunami. A number of member states made the point perhaps six months after that disaster had occurred that money for that emergency from the Commission's civil response mechanism was still unspent. This is a severe disappointment to us and an issue we have raised consistently with the Commissioner.

Last year, 2006, was a very successful one for the implementation of the EDF in that the Commission met its financial objectives for the period. The overarching priority for 2007 is to commit all remaining EDF resources before the end of the year. After a period of not doing this, they are beginning to do so.

Proinsias De Rossa, MEP

They are listening to the Minister of State.

Mr. C. Lenihan

Reform happens slowly as peace comes dropping slow.

Proinsias De Rossa, MEP

To return to the issue of East Timor, the Parliament called for the Council to take into account the accession of East Timor to the Cotonou Agreement and expressed the desire that any aid directed towards East Timor under the EDF umbrella would not result in a diminution of resources to others. Clearly, if there is a limit and a new member accedes to the system, the money must be found somewhere.

Mr. C. Lenihan

I support Mr. De Rossa with regard to that issue and will communicate it directly to the Commissioner involved, Louis Michel. I am delighted to support that and come back to Mr. De Rossa because it is something about which I feel strongly.

Mr. Costello

I welcome the Minister of State. The amount of money going into the tenth EDF is quite substantial at €22.68 billion. Do we have a figure in respect of what each member of the total membership of 27 is putting in by way of bilateral aid as well? Could we get those figures? Do we have a global figure in terms of the money going into these 55 ACP countries in terms of various bilateral arrangements between other countries and so on? Does the Department of Foreign Affairs have access to this amount so we can get an overall look at just the amount of funding that is being directed to those countries?

The EDF agreement is twofold. Its first aim is to reduce and then eliminate poverty, while its second aim is to integrate into the global economy. How is the distribution relative to both these objectives? Is there a weighting in favour of one as against the other? In that respect, what strength was given to the views of the various countries that will be recipients of the aid in terms of the negotiations? How did the EU decide? Did it decide largely on its own criteria or did it decide in terms of criteria emanating from the prospective recipient countries? What weighting was given to those countries?

The aid will be distributed along six separate regional groupings. This will be the target. Does the Commission appoint individual members or is it responsible for each of these groupings? Are there any lead member states involved in ensuring that proper supervision takes place and that there is a proper audit of how the money is spent and the results because past development funds do not appear to have produced the desired results? What accounting mechanism is being put in place to ensure the goods are delivered?

How does Ireland propose to be involved in a supervisory role over the next five or six years up to 2013? What role would Ireland play as a member state? I know the Commission is involved, but what role does Ireland play in terms of ensuring the EDF does what it proposes to do?

Mr. C. Lenihan

I will answer the last question first. Ireland plays a hugely active part in the management of the EDF. My aid officials attend meetings on the EDF in Brussels every six weeks. It was for precisely this reason that Ireland as a bilateral donor and member of this committee opposed what was described as the Commission's initiative to budgetise the EDF. In other words, in the past year or two, the Commission believed the entire EDF or Cotonou system would be brought into the general EU budget. We vigorously opposed that along with the Dutch and many other like-minded donors because we felt we would lose that operational scrutiny and control we currently have by dint of this being a unique fund which has as its apex the idea of poverty reduction. We feared this would be lost if it was simply moved into the general budgetary set-up of the Commission. This is the role we play in terms of the EDF on an ongoing basis through our participation in the committee, which is unique because it does not happen with regard to other funds operated by the Commission. We were also concerned that by moving it into a general budget allocation, it would present the risk that the Commission could spend moneys outside of the strict parameters that operate within the EDF of poverty reduction, particularly with regard to the emphasis on least developed countries, where we specialise as a donor and on which we concentrate our money and resources.

In respect of bilateral aid, I said earlier that the percentages were roughly 80% to 20% in respect of bilateral European member state donors versus the Commission contribution. I do not have the precise figures, but I can get them and come back to the committee.

The global aid figures are enormous. Total EU aid in 2004 was US$43 billion and it is hoped that figure will reach US$80 billion by 2010. As the committee is aware, the EU has made a collective, as opposed to an individual, commitment to reach the 0.7% target by 2015. This refers to something referred to earlier by Mr. De Rossa. All the indications are that most of the 15 states that signed up for it will achieve it, with the possible exception of between one and three countries who may have difficulty achieving that target by 2015. Ireland as a bilateral donor has signed up to achieve this target by 2012, three years ahead of the EU collective commitment. This one decision, which I was very proud to be part of in Brussels, means that an additional €20 billion will come into development by 2010, which will be of enormous assistance.

I do not have the figures for global aid. Notwithstanding these huge increases occurring in global aid levels because of decisions to make the target of 0.7% important and achievable, global aid is still dwarfed by the amount of money that goes home from migrants through remittances, which puts it in context. While we are spending enormous amounts of money, they are still dwarfed by the level of remittances emigrants or migrants send back to their host communities, countries and families.

The views of recipients are regularly sought by the Commission with regard to the EDF. Commissioner Michel held regional seminars with the six regional groups referred to by Deputy Costello, so there was a fairly rigorous system of consultation with the regional groups and a considerable amount of discussion and negotiation before the tenth agreement was finally agreed.

The audit issue is very clear and obvious. There are very good audit systems in place for Commission aid, as there are for Irish aid. One of the arguments advanced to us by partner countries is that there is almost an over-audit of ODA flowing from developed countries like Ireland and the EU to other countries. This is one of the reasons the Paris declaration about which I spoke earlier was signed. There is now a commitment by donors to be far more effective and cost-effective. Individual countries are sometimes the subject of a blizzard of audit compliance from a variety of donors. This is something on which we are working so that, for instance, there will be one audit crossing a number of countries' donors and there will be a shared audit in countries. When one speaks to Ministers from Africa and other continents who are recipients of aid, this is the biggest complaint they make about what we might call western donors. These Ministers complain that the level of compliance, bureaucracy and red tape that comes with the money sometimes drives them to utter frustration. I do not think we can complain too much about the auditing. Obviously, I do not want to be seen to dismiss that concept because significant difficulties and problems remain in our own and other donors' engagements in Africa with regard to maladministration, poor administration and lack of collection of or ability to collect taxes. Obviously, the issue of corruption also looms large, which is a source of ongoing concern with regard to audits and other issues.

Mr. Mulcahy

I support the motion. Ireland's contribution to the tenth EDF will consist of €206.4 million. Is that included in our ODA amount per year?

Mr. C. Lenihan

That is part of our ODA contribution.

Mr. Mulcahy

I made this point at the Joint Committee on Foreign Affairs when the Minister for Foreign Affairs launched his white paper, which is an excellent document. The funds are now enormous. A sum of €22.6 billion will be paid in 2008-13, a considerable amount of taxpayers' money. I am pleased the Minister has confidence that showers of auditors are descending on these countries but that is not necessarily a good thing. Some people may not agree with the Minister of State when he says that this money is not lost to corruption and inefficiency.

This matter is also on the agenda of the Joint Committee on Foreign Affairs. Given the sums invested in overseas aid we must redouble our efforts in auditing and monitoring. While money may be spent on the purpose for which it was allocated, that is not helpful if we must give the same amount of money to the project in a few years' time. Are we achieving something with these sums? When the white paper was launched I was not satisfied the correct resources were put into monitoring and evaluation. All members support Ireland's commitment to 0.7% of GNP by 2012 but the taxpayer is entitled to be reassured that the sums are audited and we are receiving value for money. I ask the Minister of State to re-examine the matter. I do not seek to raise problems where there are none but critics do not agree that everything is well spent. Such views undermine this programme to the detriment of those who really need help. Perhaps this committee or the Joint Committee on Foreign Affairs cannot undertake this role because of their agendas but it must be done.

Several countries are getting involved in various projects across several subjects. Could an EU country adopt a country in the African, Caribbean and Pacific, ACP, region and specialise in monitoring and reporting in that country? If Ireland is involved in a country's health service and another country is involved in its education or water services, is there a risk of duplication? Does it make more sense for countries in the EU 27 to specialise in one ACP country? Perhaps this could lead to savings. The sums are considerable and we must reassure ourselves that these funds are properly spent.

Mr. C. Lenihan

We are conscious of the enormous sums of money allocated to development in the past two years. These sums are almost intimidating and for this reason the audit committee in the Department of Foreign Affairs is strong. The unique aspect of this public service funding is that it is not spent in Ireland, it is spent abroad. Unlike many domestic Departments of State, only 5% of my budget is spent on salaries and administration. That places a unique obligation on us to have the funding well audited, monitored and scrutinised by committees such as this. At present, we are conducting value for money reviews of money spent in countries affected by the tsunami and overall spending in Mozambique. We are also conducting such a report on money spent on HIV-AIDS. There are global concerns about the money spent on AIDS in the developing world. The issue of replication and duplication has been a concern over the past ten years. Worthy donors or NGOs are committed to assisting but duplicate each other's work and do not deliver aid efficiently. In the recent Estimates round the Department of Foreign Affairs was granted 14 extra staff for audit, evaluation and monitoring of the programme. We are undertaking a management review with the Department of Finance regarding staffing and the human resource needs of this operation. This is expected to be complete by July, at which point we can commit to extra staffing requirements to run the current programme of €813 million. By 2012 this will grow to in excess of €1.5 billion. If extra staff are employed, many of them will be in the area of monitoring and evaluation. It would be criminal not to do this, as it would do a disservice to Irish taxpayers and the people we seek to assist.

The idea of adopting a country has been put to me before. We do that, in effect, with the eight programme countries. One may ask why we do not reduce it from eight to one. From visiting different countries, one is exposed to different experiences and one can learn what can be transplanted from one country to another. There is an absolute limit of 12 countries and I suspect we will settle on a maximum of ten by 2012. If one moves beyond that, one is duplicating and creating more administration rather than a better result. Other donors rushed far too quickly to achieve a target of 0.7% of GNP. Five countries have achieved this amount but created innumerable programme countries. Subsequently they had to reduce this number. The Dutch, for example, reduced the number of programme countries from 25 to 15 because it was not as effective as they wished.

Mr. Mulcahy

I agree with that. The smaller the number, the greater the concentration.

Mr. C. Lenihan

Involvement and engagement also becomes deeper. Some countries are over-assisted and others are under-assisted. The EU has produced its own donor atlas, as has the OECD, specifically with a view to giving an indication of which countries do not receive aid or the attention of the international community.

Mr. Mulcahy

Can I ask the Minister of State for a copy of the two reports?

Mr. C. Lenihan

I will get them for the Deputy. On the question of the audit requirement, there are terrible inefficiencies at times. I met President Johnson-Sirleaf in Liberia and she said one of the first difficulties she encountered was when three or four different agencies, two of them from the UN, came to her assistance with feasibility studies on land ownership. There are issues around co-ordination of aid, as Proinsias De Rossa said, and it annoys people when agencies try to assist but only replicate others' efforts.

Proinsias De Rossa, MEP

Deputy Mulcahy, as he usually does, gets under my skin on these issues. Of course €22 billion is a substantial sum of money from an individual's point of view, but we are talking about spending €1 per head of population each year for the next five years on people who need it. To characterise this as a vast sum of money given out of the goodness of our hearts is a bit rich. Most of the countries in question have been exploited and their population and resources robbed for 100 years or more, not by us but many of those states which currently pump in much of the money. The advantage of aid is that it creates a welleducated, wealthy society in the rest of the world, which will not be to our disadvantage. I also detect a conflict of opinion between the Minister of State and Deputy Mulcahy. The Minister of State argues against excessive auditing and the Deputy for a redoubling of auditing and monitoring.

We need to put the amount in perspective because we are not overspending on aid, even if some goes astray, which is inevitable given the range of countries which require it and the number of non-governmental organisations and state agencies which administer it. We are not by any means giving the shirts off our backs.

Mr. C. Lenihan

I will not get involved in Mr. De Rossa's row with Deputy Mulcahy, but the latter never gets under my skin and I welcome his views on all matters.

Chairman

I will ask a question as an aside. The German ambassador appeared before the joint committee recently and he mentioned a possible EU-Africa conference to be held under the Portuguese Presidency. I asked whether he agreed that Zimbabwe should take part in the conference. What is the opinion of the Minister of State?

Mr. C. Lenihan

Zimbabwe has been a source of conflict between donor countries such as us and recipient countries and is one of the reasons the conference has not taken place to date. We take the view that it would not be especially helpful because no right-minded person could stand over what is occurring in Zimbabwe at present and it would send all the wrong signals. A number of Deputies have expressed concerns, as have many civil society groups, about corruption and the systematic abuse of human rights, and donors and others involved in development must draw the line somewhere. There was a similar controversy over the Presidency of the African Union, which Sudan was scheduled to assume. Most countries, whether wealthy and developed or otherwise, were concerned about it and many ministers of African governments thought a country in which genocide was taking place should not become President of the Union, which would have involved it taking a leadership role in, for example, chairing meetings with the EU.

Chairman

The ambassador was of a different opinion and felt Zimbabwe should be allowed to participate but I agree with the Minister of State. The ambassador's point was based on inclusiveness and other African nations felt that such conferences gave them the opportunity to lobby Zimbabwe.

I will ask a question on the €206 million we contribute to the development fund. The Minister of State travels to these countries quite frequently and our presence varies from country to country. Do we get proper feedback on how well our money is spent? I understand that administrators spend the money but the example of Liberia is interesting. Four feasibility studies on a land issue seem excessive, to say the least. Do we know if our money is well spent in these countries and how do we find out? What is the procedure for feedback?

Mr. C. Lenihan

I would argue, as the Minister concerned, that it is well spent but there are problems. This is at the heart of what the Germans propose for their Presidency. Much more work needs to be done to make aid more productive, efficient and cost effective. Nobody claims that everything donors do is perfect and there is a pressing need for reform and co-ordination to make the aid more effective. We do not work in isolation, as the people who criticise Irish Aid sometimes think, but with other donors, particularly from the Nordic countries

Chairman

How does that work specifically?

Mr. C. Lenihan

Zambia is one of our programme countries, but we do not operate throughout the country. Instead, we choose a region, in this case the Ndola region, which is the old copper belt. It was in utter decline when I first took over but, since the huge growth in demand from China, copper prices are rising again and it is beginning to boom again. We then select districts within the region, so we operate at district, regional and national level. Nationally, we fund the department of education to build schools, not dissimilar to the school building programme in Ireland.

In simple terms, to ascertain how our money is spent, we can count the number of schools built. One of the ultimate justifications for government to government support is that overseas development assistance is spent through government channels and can therefore be checked, whether it is spent on a health centre or an educational resource. We are also helped by the fact that we hire local staff and do not simply rely on our ambassador, diplomats or even Irish Aid development specialists. Some of the most impressive people I have met in my visits to programme countries have been local staff. They are specialists, speak the language, know what is happening and are open and frank about what they see in their own country. When they see an inefficient district manager they are quick to bring that message back and we are quick to use our access at a diplomatic level to pass such information on to the relevant Minister in the country concerned.

The missionaries help us a great deal in remote areas where we are not present with specialist travelling outfits to supervise how the funding we provide is spent.

Chairman

Activities are checked regularly on an ongoing basis regarding the money put in and the development of particular projects but is a formula applied? Does the Minister of State compare our spending programme with other countries' programmes and does the development fund have this kind of checking system?

Mr. C. Lenihan

We do joint assessments with other donors and we hire the big auditing firms to carry out audits from time to time in addition to our own auditors who are in place at the various embassies. A combination of audit mechanisms exists.

Mr. Allen

The Minister of State has given an impressive account of how effective the auditing process is but how does he address the issues raised by the Comptroller and Auditor General, who expressed serious doubts about the audit process at home and abroad? What impact has decentralisation had on the development of new Irish Aid programmes and the auditing of present programmes? The Minister of State said a number of appointments were made recently; are they located within Irish Aid or in the Department of Foreign Affairs?

Mr. Mulcahy

On the same topic, the current European Development Fund, runs until the end of 2007; will there be a major audit and review of that programme? If so, would it not be appropriate to have a debate here on that review?

Mr. C. Lenihan

Is the Deputy asking for a debate?

Mr. Mulcahy

Will there be a review of the last programme at EU level?

Mr. C. Lenihan

Yes.

Mr. Mulcahy

Would it not be appropriate, then, to have a debate on the subject when it is published? We might not be here, of course.

Mr. C. Lenihan

The Deputy should not be so defeatist. I would be delighted to engage in such a debate and share any internal information we may have on our international assessments.

Deputy Allen referred to the Comptroller and Auditor General and, broadly speaking, he was positive in this his first assessment of the Irish Aid programme. We welcome the fact that, in recognising the volume of money involved in what we do, the Comptroller and Auditor General took it upon himself to conduct an audit of our operations. The Deputy may be confusing the comments of the Comptroller and Auditor General with comments reported in The Irish Times and attributed to our internal audit committee on our audit and evaluation requirements. This committee pointed out that we need to increase the panoply of audit, evaluation and monitoring control relating to the programme as it grows. Unfortunately, The Irish Times took these comments on a potential auditing danger to the programme in the future and used them on its front page to suggest they were critical of the existing system of evaluation and control. The internal audit committee is not anxious about the existing system of evaluation and control and the committee’s chairman wrote to The Irish Times to point this out subsequent to the publication of the article. I suspect this is the basis of the Deputy’s comments but I do not wish to make presumptions in this regard.

We have discussed the subject of decentralisation on several occasions and the two recently advertised positions are for auditors in Irish Aid in Limerick. At this point we have reached 71% of the staff requirement for Limerick and in total 124 posts will move there.

Proinsias De Rossa, MEP

The people will move, rather than the posts. The posts have moved already but the people have not.

Mr. C. Lenihan

I should not be too bureaucratic. Some 71% of the people we need are available and ready to move.

Mr. Allen

What percentage of the existing members of Irish Aid is prepared to move?

Mr. C. Lenihan

Some 85 staff out of a total of 124 are prepared to move to Limerick.

Mr. Allen

What senior and specialist posts?

Mr. C. Lenihan

The Deputy knows the answer from the many replies I have given him on the topic already.

Mr. Allen

I do not know, that is why I am asking. My last question on the subject of senior and specialist posts was asked many months ago.

Mr. C. Lenihan

I think I have told the Deputy in many parliamentary replies that the situation is unchanged. We are still at an advanced stage in negotiating with the Department of Finance the terms and conditions of the contracts under which senior development specialists and other specialists would work were they to move to Limerick. I am confident that we will achieve a result in the next month or two that will allow these valued members of the Irish Aid operation to move.

This is a subject under intense negotiation because it has wider Civil Service ramifications relating to the terms of employment for decentralised technical staff. We are deploying 25 members of Irish Aid staff to Limerick in May as an advance party to prepare for a full transition of staff, hopefully towards the end of 2007. I recently viewed the building works on the site in Limerick and they are proceeding well. We hope to lead a group of staff and others, including the Irish Aid Advisory Board, to Limerick in the next month or so to show the facilities and the pace at which we are moving.

I do not wish to sound boastful but in the context of progress made on decentralisation by other Departments we are one of the more successful examples. The Deputy is welcome to examine other Departments. We are mindful of ensuring the development specialists are catered for because it would not be feasible to operate in Limerick without them.

Chairman

I thank the Minister of State and his officials for attending the select committee.

Sitting suspended at 3.55 p.m. and resumed at 4 p.m.

Chairman

Is the draft report of the committee's consideration of the proposal agreed? Agreed.