I welcome officials from the Department of the Environment, Heritage and Local Government to this meeting. Today's discussion will deal with the scrutiny of legislation COM (2004) 621 on the topic of the proposed financial instrument on the environment, the new LIFE+ programme. I understand Mr. Tom O'Mahony, assistant secretary of the Department, will make the presentation.
Scrutiny of EU Proposals.
Mr. Tom O’Mahony
I thank the Chairman. I propose to make the initial presentation, but I am accompanied by a number of officials, whom I will now introduce. Depending on the nature of the questions, I will ask the relevant experts to give the answers. On my right is Dr. Alan Craig, director of the national parks and wildlife service, who is an expert on the existing LIFE nature programme. On my left is Ms Riona NíFhlanghaile, who heads up our EU environment section and is therefore dealing with this brief in terms of the EU Council. Mr. Michael McKenna, from our environment awareness section, deals with the new LIFE+ programme and Mr. Pat Gilheaney, from the environmental policy section, deals with some of the competitiveness and technological innovation aspects which are relevant to the new proposal.
I thank the committee for the invitation to discuss the proposal. This is a demonstration of the effectiveness of the Oireachtas scrutiny process for EU legislation. For some time we have been coming before the committee with the Minister immediately in advance of each Council meeting. At that stage the bulk of the preparation work will have been done and, while the Minister has some opportunity to take account of comments that may be made, in general Ireland's position will have been pretty much finalised at that point.
In this case we are talking about five or six weeks before LIFE+ is discussed at the meeting of the Environment Council in the first week of December. We will be preparing for that over the coming weeks and there is an opportunity now to hear the views of the committee so that these may be fed into the process. In briefing the Minister over the next few weeks, we will take on board the matters discussed today. Again I thank the committee for that opportunity.
I will now set the context of the discussion. The achievement of the Lisbon and Gothenburg policy goals, that is, the development of a European economy which delivers growth and social cohesion while reducing negative impacts on the environment, requires continued commitment to sustainable use and management of resources and environmental protection. The European Heads of State and Government at their spring Council in March 2004 concluded that "growth, to be sustainable, must be environmentally sound".
EU funding is fundamental to achieving these policy goals. Environment will be integrated into these priority policy areas. In the Commission proposal document we are discussing, it is noted that 16.5% of the European Regional Development Fund and 50% of the Cohesion Fund are devoted to the environment. In addition, all cohesion, agri-environment and rural development interventions must respect Community law on the environment. It is important that appropriate levels of funding for environmental activities are maintained and that they reflect the importance of the environment as a key dimension of sustainable development.
As the Commission says in the proposal document, funding for the environment has clear European added value. Environmental degradation and climate change, combined with the increasing incidence of natural disasters of a transborder nature, all demand a Europe-wide and global approach and response.
Looking at what has happened to date, the Commission presented in September 2004 its proposal for a new financial instrument on the environment, called LIFE+. Essentially, the objective of LIFE+ is to contribute to the development, implementation, monitoring, evaluation and communication of Community environment policy and legislation, with a view in particular to promoting sustainable development in the EU. Supporting the implementation of the sixth environmental action programme and streamlining environment funding programmes are further aims.
So far the proposal has been discussed in a number of different forums. It has had detailed technical examination at several meetings of the working party on the environment. It has been an agenda item at two Environment Councils, and indeed the Minister has spoken to this committee in his pre-Council briefings about it. It is expected to be an agenda item again for the Environment Council of 2 December 2005, where the UK Presidency will try to achieve partial political agreement on the proposal. That means agreement on everything except the budgetary aspect; this must await the outcome of the negotiations on the Financial Perspectives 2007-13.
The European Parliament adopted a legislative resolution on 7 July 2005 which proposed 35 amendments to the proposal. These included restructuring the proposal to enable it to fund the conservation and management of Natura 2000 sites and a significant increase in the original proposed budget of €2.1 billion to accommodate this.
There is an important difference between the new LIFE+ and the current LIFE programme. LIFE+ is intended to be a policy support instrument. It will not fund tangible projects in the way that the current LIFE programme does. This change is consistent with what is called the integration approach, whereby the mainstream EU funding programmes will be used to support physical and tangible investment in the environment. I will come back to this later on, because it is one of the key issues in the debate on this issue between member states.
LIFE+ will replace several existing financial instruments including the current LIFE programme, Forest Focus, the NGO action programme, sustainable urban development and some other actions for the environment that are funded out of general budget lines. Most of these will be merged to fall under LIFE+. Thus LIFE+ will complement some of the main funding programmes and will group together most of the current support programmes for the environment in one instrument. Following suggestions from the working party and a July resolution of Parliament, the proposal now being considered has three strands, as opposed to the two in the original draft proposal submitted to this committee in October 2004 under the Oireachtas scrutiny process. These strands are LIFE+ Environment Policy and Governance; LIFE+ Information and Communication; and the new one, LIFE+ Nature and Biodiversity. I will now give a brief outline of what each strand is intended to cover.
LIFE+ Environment Policy and Governance is supposed to contribute to consolidating the knowledge base for the development, assessment, monitoring and evaluation of environmental policy and legislation through studies, modelling and scenario building, for example. It will support the design and implementation of approaches to monitoring and assessing the state of the environment and also the drivers, pressures and responses that impact upon it.
LIFE+ will support the development and demonstration of innovative approaches to policy development and implementation and facilitate the implementation of Community environment policy, especially at local and regional levels, for example, through capacity building, exchange of best practice and networking. Under that strand LIFE+ will provide support for better environmental governance and broader stakeholder involvement — including NGOs — in policy consultation and implementation.
The second strand is LIFE+ Information and Communication. Its objectives are to disseminate information and raise awareness of environmental issues, and to provide support for typical accompanying measures such as events, campaigns, conferences and so on.
The newly added third component, LIFE+ Nature and Biodiversity, is intended to contribute to the enhanced implementation of Community policy and legislation on nature and biodiversity, in particular the wild birds and habitats directives, and support the further development and implementation of the Natura 2000 network. Other objectives are the consolidation of the knowledge base for the development, assessment, monitoring and evaluation of the Community nature and biodiversity policy and legislation; the design and implementation of approaches to this monitoring; and to provide support for better environmental governance in this area.
It is important to note that LlFE+ is not a replacement for the LIFE instrument in place since 1992. It is somewhat unfortunate that the former is a variation on the name of the latter because the programmes are different, although each is an environment policy support instrument. LIFE Environment, the existing programme, has been a source of funding for projects which demonstrated the application of environmental technologies, while LIFE Nature has similarly funded practical action projects to manage the conservation of Natura 2000 sites and protected species. The likelihood is that funding for this type of practical project will not be available under LlFE+ which, as I noted, is to be a policy support programme. In the case of LIFE Nature this will possibly mean that from 2007 funding for practical actions, for example, the development and ongoing management of Natura sites, will be funded from rural development and structural funds.
The competitiveness and innovation framework programme is a new programme from the European Commission designed to bring together a number of existing separate Community initiatives in the areas of innovation, SME financing, ICT, telecoms and energy efficiency under a common budgetary and administrative framework. It is intended that the eco-innovation strand of this programme will, from 2007, be the primary source of funding for environmental technologies. Funding for the competitiveness and innovation framework programme is dependent on the outcome of negotiations on the financial perspectives for 2007 to 2013. The figure of €520 million proposed by the Commission for the promotion of eco-innovation must be viewed as indicative only.
It might be useful to consider briefly the existing LIFE programme. Members will have had experience of individual LIFE funded projects in different areas of the country. The LIFE programme, which is due to end in December 2006, has three strands. LIFE Environment has aided the implementation of EU environment policy by demonstrating a variety of clean technologies in key areas such as improving water quality and recycling waste. LIFE Nature has supported the implementation of EU nature conservation policy, in particular by helping to launch the establishment of Natura 2000. LIFE Third Countries has funded technical assistance activities for capacity building and promoting sustainable development in third countries.
Since 1992, when the LIFE programme was introduced, more than €1,807 million has been used to support LIFE projects, of which Ireland qualified for €37 million or 2% of the total. Given that our population is approximately 1% of the European Union total, it is reasonable to observe that Ireland has benefited well from this funding instrument. I stress again that all figures remain indicative until agreement is reached on the financial perspectives but as regards the budget for LlFE+, the indicative budgetary framework proposed for the programme is €2.19 billion for the seven year period from 2007 to 2013, which would work out at approximately €300 million per annum for all LlFE+ activities across 25 member states. It is estimated that it will cost at least €6 billion per annum to implement the habitats directive across the EU 25. Obviously, therefore, the LlFE+ programme, with an annual budget of around €300 million, will not be capable of making a significant contribution to the implementation of the directive. While the programme will support implementation of Community policy on nature and biodiversity, it will not be the appropriate mechanism for supporting the extensive management and conservation costs and day-to-day servicing costs of Natura 2000. Support for those activities is to be sought from the EU structural and rural development funds, in other words, it is to be mainstreamed or integrated into existing major funds.
Ireland has been broadly supportive of the integration option for nature conservation funding and has not been as concerned as many member states about the ending of LIFE Nature. Ireland has tended to agree with the Commission's approach that mainstreaming and integrating nature conservation into rural development and structural funds creates a better opportunity to make available the type of funding needed for Natura 2000. This issue has dominated discussion at Council and in the working group. Some member states have adopted strong positions with particular focus on the funding of Natura 2000 sites. The key issue for some Mediterranean member states and new member states is that they fear Natura 2000 will not receive adequate funding if it is left to national governments to fund the programme because the allocation of funding from the large mainstream EU funds and national resources would be determined at national level. These member states argue that because Natura 2000 is a European initiative, the gain and benefit is European and significant EU funding should, therefore, be ringfenced and dedicated to the programme. The problem with this argument is that the whole basis on which LlFE+ is being introduced is that it is to be a policy support mechanism and that investment in management costs of Natura 2000 sites should be met from mainstream rural development and structural funds.
Our general position and that which the Minister tends to take at Council is to commend the overall concept of the proposal and the objective of having a horizontal funding mechanism to support EU environment policy and the implementation of the sixth environment action plan. We are conscious that it has always been the tradition that major EU investment in the environment has come from mainstream funds, rather than dedicated environmental instruments.
I remind members of the statistics I cited earlier. Approximately 16.5% of the European Regional Development Fund and 50% of the Cohesion Fund are devoted to the environment. This proposal has been the subject of intense discussion over the past 12 months and we expect much more debate in the next five weeks leading up to the Council in December. A number of working party meetings are scheduled in preparation for the Council and a great deal of work remains to be done. The UK Presidency's ambition is to achieve partial political agreement at that meeting. It remains to be seen whether it will be successful in achieving its objective. I will be glad to pass on to the Minister the views, observations and interest of the joint committee on the proposal.
Mr. O'Mahony stated that LIFE+ is to be a policy support instrument and the previous LIFE programme funded tangible projects in a practical way. What is the reasoning behind the decision to make such a major policy change and abandon practical projects? Were applications for funding under the LIFE programme made to the Department or directly to the Commission? A list was circulated setting out many practical projects which have been funded in Ireland under the programme. Many of the applications submitted for tangible projects were made by local authorities, companies and organisations based in a variety of counties.
It is regrettable the emphasis is changing and that it is becoming a policy support programme. What is the reason for this? If the new programme is agreed, will the Department make application for future funding? Is there a danger that this money will simply substitute for existing departmental Estimates? How can we prevent the money being used in future by the Department to fund existing programmes?
Mr. O’Mahony
I will deal with those questions. My colleagues will deal with the mechanics of the process. In terms of the general issue and the change in emphasis, I wish to make two points. There is a degree of simplification and consolidation now. There were a number of different programmes from which various elements of this type of policy support were made available, particularly in regard to environmental technologies and so on. The idea is to pull all those support programmes together into one instrument.
In terms of the total amount of funding available, the demands that will arise in respect of management acquisition, etc., in terms of Natura 2000 sites, are so great that the ability to fund it out of a dedicated programme would be impossible. There would be no possibility of that type of funding being made available by member states when the financial perspectives are being decided. The general thrust of Commission policy is to integrate within the mainstream funds, particularly the rural development funds, many of the small scale supports which have been available under the LIFE programmes in the past and allow the new LIFE+ be a particularly focused programme which will give added value in the way I described earlier.
I will ask my colleagues to comment on the nuts and bolts of how the applications will be made and the fear that the Department might just usurp the funding for other purposes.
Mr. Michael McKenna
The existing system, the LIFE environment programme, is a centralised programme run by the LIFE unit of the EU Commission. Its method of operation is that a call for proposals from member states is published around June. The Department places a notice in the newspapers and invites applications with a deadline of last Friday, 21 October 2005. The Department largely acts as a post box in the case of the applications. While we consult colleagues on the technical merits of the applications, our job is simply to check that the forms are properly completed and that all the information is passed on to the European Commission by the due date.
The projects are further examined by the Commission and the selection process is carried out by independent evaluators hired by it. The results are returned the following June and the Department is informed which projects have been successful and the amount of grant aid they will receive. It is quite a centralised process.
The new proposal is that the Commission will draw up what is called strategic multi-annual programmes setting out the broad parameters. Member states will then be invited to draw up their own national programmes which will be for each year of the four-year period from 2007 to 2010 and, when the time comes, for the following four-year period. These will be submitted to the Commission and allocations will be made to member states. If what is being discussed now comes to fruition, it will not be the case that each project will be competing for funding. Rather, the allocation for each member state will be determined by the Commission. The question to be evaluated will be whether the national programme submitted by each country meets the broad parameters of the multi-annual strategic programme drawn up by the Commission. This is my understanding of how the LIFE+ programme might operate.
Has any thought been given to our national programme?
Mr. McKenna
We are beginning to consider it but there is nothing concrete at this stage. We propose to implement this programme from January 2007, so there is some space in which to get our act together.
Will the national programme involve funding of organisations?
Mr. O’Mahony
It could do.
Mr. McKenna
Until the Commission proposal is adopted by the Council, we cannot be sure as to the final parameters. While we can engage in some initial consideration regarding the shape of a future programme, there is not much point in going too far down that road until we know exactly the type of rules, conditions and eligibility criteria which will be applied.
Is reverting back to the funding of practical projects not possible at this stage? Is the new emphasis on a policy support programme the philosophy to be agreed?
Ms Riona Ní Fhlanghaile
There is a sense that there is a risk of losing all these opportunities for practical programmes and clearly all of us like the idea of something practical and tangible. The environmental technology action plan and the competitiveness innovation framework programme will pick up on those. We understand that the opportunities will still be available but, as Mr. O'Mahony stated, through another programme that will be integrated and part of a bigger picture. We understand that there will still be opportunities for those people who are innovative and who have good ideas to receive support from the EU.
Mr. O'Mahony referred to the three strands of the LIFE programme which is due to end in December 2006. The LIFE environment programme has aided many developments over the years with regard to clean water technologies. Many smaller towns and hundreds of villages do not have basic sewage treatment plants in place and this must be addressed, particularly for those in close proximity to rivers and tributaries of main rivers. For example, many villages in close proximity to the River Shannon do not have proper sewage treatment plants. This must be addressed with urgency because this problem has been discussed for the past decade and one must go through many layers of bureaucracy in order to access funding for these schemes. Local authorities regard these layers of bureaucracy as quite an annoyance. The system needs to be simplified. A new approach to the LIFE programme will create further layers of bureaucracy.
On the question of the recycling of waste, the disposal of plastic has been paid for by farmers in all parts of the country but waste plastic wrapping is not being collected and is being stockpiled in farmers' yards. Many farmers are in REPS and must dispose of this waste but there does not seem to be a market for it at present. This build-up may cause serious problems. Is there any domestic market for recyclable products?
Mr. O’Mahony
The LIFE programme has contributed €37 million in the 15 years since its inception, or between €2 and €3 million per year. This is relatively small in comparison to our own national contribution towards environmental research, particularly in the last two or three years since the environment fund came into existence. This fund is resourced from the plastic bag and landfill levies and generates some €40 million per year. This is put to a range of different uses in the general environmental protection area, including capital grants towards recycling facilities. It funds, to the tune of some €7 million per year, the EPA's environmental research programme. It also funds the national waste prevention programme which has been in place for two years and a new market development programme established to deal with the issue raised by Senator Bannon, that products collected for recycling may constitute waste if there is no market for them.
I am conscious of the danger of getting into a discussion on general waste management policy rather than the LIFE+ proposal. My general point is that irrespective of the outcome in regard to LIFE+, significant sums of money will be spent in the coming years on research into better waste management, improved water quality practices and other environmental issues. Most of this will be channelled through the EPA.
Mr. O'Mahony observed that the amount of money available through the LIFE programme is relatively small in the broader context. The €37 million expended since 1992 provides an average of less than €3 million per year and the LIFE+ budget for 2007 to 2013 will not herald significant increases. I do not want to comment on individual projects because I am sure they are all worthwhile. However, of the various projects funded through the years under the LIFE programme, there seems little evidence that one of the objectives of the programme, the active involvement of citizens in environmental issues, has been realised. Most of the projects involved grant-aiding industry, local authorities or statutory agencies to perform various environmental tasks which may have been undertaken by these same bodies in any case. In regard to waste management and recycling in particular, it seems funding may have been provided to particular bodies in respect of core activities that would have taken place irrespective of the receipt of this funding.
Given that the amount of funding provided under the LIFE programme is so small, is it a good idea that it should be used in this way? If the EU is going to spend more than €2 billion on the LIFE programme between 2007 and 2013, would it not be better to focus on environmental problems that are Europe-wide? Deputy Bannon raised the issue of the lack of a domestic market for recycled products. We have all heard about recycled paper and other materials going to China and other far-flung locations. The market that was here for recycled glass seems to be in decline. Is it not better that spending should focus on solving and addressing the environmental problems which are Europe-wide and which might have a better dividend for individual member states than simply assigning €3 million or €4 million per year to states of our size?
Mr. O’Mahony
This issue forms part of the current debate. In the most recent version of the proposal, which went to the Council last week, four member states — Denmark, Germany, France and Sweden — issued a reservation on the national agencies approach. They believe it would be preferable to select projects and manage the LIFE budget at Community level. They consider that the proposed approach and the delegation of a significant part of budget implementation to national agencies would neither guarantee European added value nor ensure the best projects receive funding. There is concern that this could lead to additional bureaucracy and administrative costs. This is not far removed from the argument made by Deputy Gilmore.
One of the objectives the Commission set out from the start in regard to the selection of projects, irrespective of whether it is done at national or Community level, is that account should be taken of their potential for providing European added value. The regulation stipulates that all measures financed by LIFE+ must satisfy certain eligibility criteria to ensure they provide such added value. It can be argued, however, that this requirement may not be met when there is a system of national allocation and projects are subsequently managed at national level. This issue will form part of the discussion we will have with the Minister in the lead-up to the Council. Ireland's position up to now has coincided with that of the majority of member states in that we considered this funding as something allocated at national level and utilised in projects handled at national level. This is a matter that is up for debate.
Ms Ní Fhlanghaile
New versions of the proposal are being produced almost on a weekly basis because the Presidency is so keen to achieve agreement on this matter. One of the issues under discussion is the possibility of the Commission managing a percentage of the budget and another percentage going to member states. There would be obvious challenges in operating such a 50:50 management system. As Mr. O'Mahony said, the strong and repeated message in regard to this proposal is that it is now time to raise the bar so that funding is only provided for European added value projects. This is not to suggest that none of the projects undertaken heretofore under the LIFE programme has satisfied this requirement but the thrust of the new proposal is to take the approach suggested by Deputy Gilmore. The idea is that national governments should be able to manage the local and regional challenges.
What is the position in regard to the projects funded to date? While I presume there will be an evaluation, what is the general view of their value or outcome?
Mr. McKenna
The Commission recently commissioned an evaluation of the projects carried out under LIFE since its inauguration in 1992. The evaluation concluded that the programme had been very successful and added a great deal of value. Among the criteria for funding under the existing scheme is a requirement for a project to be innovative. A project must demonstrate that it does something new which can be replicated in other member states. Results are required to be disseminated widely throughout the EU to provide other countries with the opportunity to learn and build on what has been developed.
Were there many applications? We have a list of projects, but we do not know the level of interest.
Mr. McKenna
Interest is quite high. While the list of Irish projects is in single figures, the success rate has been quite high. In 2004-05, there were four applications, of which two were successful. That represents a very good success rate by comparison with the way other member states fare and indicates that applications of a high quality are going forward from Ireland. There has been a steady level of interest over the years producing between four and six applications per annum of which two or three are generally successful. While there have been quite a number of queries about the programme, it is often the case that people do not come directly to the Department but learn about it from the excellent website the LIFE unit has developed. The website contains full information on the projects which have been funded over the past 15 years and is a very useful place to research whether one's idea has any chance of success before one takes it any further.
I have a question on the proposed 50:50 split which may be on the cards. Where funding has been administered at the lowest level, it has gone out through local authorities. Will there be a conflict in that decisions will be made instead at top level and on a global basis rather than locally?
Ms Ní Fhlanghaile
It is almost too soon to tell. It does not look like the split will be 50:50, but that fewer decisions will be made in Brussels and more will be made at national level. So much remains undecided that it is very difficult to anticipate how things will turn out. Our wish, no more than anybody else's, is to avoid making the scheme overly bureaucratic.
I thank the witnesses for their presentation which has been most helpful. While politicians like to look at tangible, practical projects and to obtain finance for them, a new approach is being adopted which the committee must reluctantly accept having regard to the integrated policy of the Commission and member states. In that context, we wish the Minister and the officials well in the negotiations.
Mr. O’Mahony
Thank you, Chairman. You will, of course, see the Minister a day or two before the Council. We may at that stage have a better picture of how the matter is shaping up and be able to provide more information to the committee. The committee will be able to influence the Minister's final position. I thank the committee for its input today.
Members should note that the Minister will address the joint committee on 1 December at 9.30 a.m. prior to the Council meeting.
The joint committee went into private session at 3.25 p.m. and adjourned at 3.35 p.m. until 2.30 p.m. on Wednesday, 9 November 2005.