Environmental and Social Audit

Report (Final Draft)

on behalf of the European Parliament, Committee on Budgetary Control

Coordination: Helmut Werner Budgetary Support Unit Directorate Budgetary Affairs Directorate General Internal Policies

Ellen Frings (Project Leader) Constanze Helmchen Arved Lüth Stefan Schäfers

Bensheim (Germany), 14 April 2004 Environmental and Social Audit

Content

SUMMARY ...... 5

1. BACKGROUND...... 10

1.1 European Funds and the Integration of Environmental and Social Concerns ...... 10

1.2 The Study’s Purpose ...... 11

1.3 The Study’s Approach ...... 11

2. ENVIRONMENTAL AND SOCIAL STRATEGIES AND OBJECTIVES WITHIN THE EU ...... 13

2.1 Environmental Policy...... 13

2.2 Social Policy...... 16

2.3 Conclusions ...... 18

3. AUDITS AND OTHER PROCEDURES TO ASSESS ENVIRONMENTAL AND SOCIAL ASPECTS – DERIVING BEST PRACTICE...... 20

3.2 Procedures in the Framework of Policies...... 21

3.3 Procedures in the Framework of Development Assistance...... 33

3.4 Procedures in the Framework of Export Credit Agencies (ECA)...... 37

3.5 Conclusions ...... 41

4. STRUCTURAL FUNDS...... 43

4.1 The Programme Cycle ...... 43

4.2 Indicators for Measuring Environmental and Social Aspects...... 47

4.3 Integrating Environmental and Social Aspects in Structural Funds...... 49

4.4 The Baseline for Recommendations...... 54

5. RECOMMENDATIONS ...... 55

5.1 Selecting the Right Indicators – Regarding their Functions in Programme and Project Cycles ..... 55

5.2 Auditing Complex Systems – Defining appropriate Auditing Procedures ...... 60

5.3 Mainstreaming Structural Funds - Integrating Environmental and Social Concerns in Programmes and Projects ...... 64

6. ANNEX ...... 67

2 Environmental and Social Audit

6.1 Environmental and social objectives ...... 67

6.2 Indicators and Approaches for Measuring Effects of Structural Funds...... 69

6.3 Specific Indicators for ESF Measures ...... 77

6.4 Process Indicators - Audit Questionnaire on Procedures in Member States ...... 78

6.5 Audit Questionnaire on Environmental and Social Project Management ...... 80

7 REFERENCES ...... 81

7.1 Literature...... 81

7.2 Communications, Regulations and Standards ...... 86

7.3 Internet Sources ...... 88

7.4 Interviews...... 89

7.5 Workshop...... 89

3 Environmental and Social Audit Table of Figures Figure 1: The policies mix 17 Figure 2: Relations between assessment in European legislation 21 Figure 3: The stages within an environmental management system 25 Figure 4: The AA 1000 framework 28 Figure 5: Principles of good reporting 29 Figure 6: The programme and project cycle in the framework of Structural Funds 45 Figure 7: Information levels in the framework of Structural Funds 50 Figure 8: Types of indicators and their purposes within programme and project cycle 57

List of Abbreviations: DG Directorate General EA Environmental Assessment ECA Export Credit Agency ECGD British Export Credits Guarantee Department EIA Environmental Impact Assessment EIB European Investment Bank EMAS Eco-Management and Audit Scheme EMS Environmental Management System ESF European Social Funds IA Impact Assessment IAIA International Association for Impact Assessment NEPP National Environmental Policy Plan (Netherlands) NGO Non-Governmental Organization OECD Organisation for Economic Co-operation and Development OED Operations Evaluation Department of the World Bank OP Operational Programm RIVM National Institute for Public Health and Environmental Protection (Netherlands) SAI Supreme Audit Institution SEA Strategic Environmental Assessment SME Small and Medium Enterprises

4 Environmental and Social Audit Summary Background The European Union's Funds are important instruments for promoting not only the economic but also the social and environmental aims of the European Union. Despite a long-lasting debate on indicators and evaluation methodology it remains a challenging task, to measure how expenditures actually contribute to achieving these aims. Against this background, on behalf of the European Parliament's Committee of Budgetary Control, and after a restricted call for tender, EP services requested IFOK to carry out a study on "Environmental and Social Audit“.

Objectives The study’s principal objective is to identify methods of measuring and auditing the contribution EU funds have towards the European Union’s environmental and social objectives. Furthermore, the study formulates suggestions on how to integrate environmental and social auditing into the existing management systems of the European institutions, and specifies procedures how to strengthen environmental and social concerns into programming and implementation of financial interventions within the Member States. For concrete recommendations the work focuses on the Structural Funds.

Approach As a baseline for recommendations, social and environmental objectives already defined at European policy level are investigated and best practice in social and environmental evaluation and auditing of policies and funds is analysed. Building on the above, the current practice in the framework of Struc- tural Funds is examined. In bringing these together, the study finally formulates recommendations appropriate to be implemented into existing management systems within the European Institutions.

Results Social and environmental objectives In recent years, the strategic debate on objectives in the European Union has intensified considerably, resulting in a generally increased awareness of environmental and social subjects within the European administration. However, there is a substantial difference between strategies at the Union’s level and the implementation of funded actions in Member States. Therefore, the social and environmental targets defined in the EC-Treaty, the Sustainability Strategy, the Environmental Action Programme, the Social Inclusion Report and the Guidelines for the Employment Policies, were compiled in the present paper to provide a baseline for evaluating and auditing procedures.

A Variety of Methods to Assess Environmental and Social Impacts of Policies and Funds In the framework of policies and funding, various tools and procedures are used to assess impacts of policies, plans or programmes. Complementarily, the procedures in development assistance and in export credit agencies are analysed.

· ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT is an important tool in the area of policies, amongst others applied to check legislative intentions. In recent years, the European

5 Environmental and Social Audit Union has been developing a conceptual legislative framework to stipulate assessment of policy strategies and programmes. As an example, the study introduces the Dutch “E-Test”.

· ENVIRONMENTAL MANAGEMENT SYSTEMS (EMS), including audits, mark a set of new instruments to foster the consideration of environmental aspects not only in business but also in administrations and public bodies. Although the European EMAS Regulation as the legal base for EMS requires tackling indirect impacts caused by planning and administrative decisions of organisations, there is still a lack of appropriate methods. Thus, EMS in public bodies mainly focus on the direct effects caused by the organisation’s infrastructure.

· Another tool including audit procedures are environmental and social REPORTS. Voluntary Standards, such as AccountAbility 1000, SA 8000 or that of the Global Reporting Initiative (GRI), provide guidance, all emphasizing the requirement of involving stakeholders. Although specified for businesses in the first instance, they provide useful principles for accounting, auditing and reporting within the public sector and policy. As one best practice example, the Strategic Social Plan of the Canadian province of Newfoundland and Labrador is introduced in the present paper.

· Traditional financial accounting provides one more approach to audit procedures in the area of environmental and social objectives: more and more institutions in the area of financial accounting have widened their view to include the effects of funding on society and the environment. As one audit example the study presents procedures for Animal Protection in Po- land.

· Not only financial institutions carry out environmental and social audits. Due to their political traditions, some countries have also established auditing institutions to monitor the success of their policy strategies. An example is the Canadian Commissioner on the Environment and Sustainable Development

· Most PUBLIC BODIES FOR DEVELOPING ASSISTANCE have established procedures to assess the anticipated environmental and social impacts and to evaluate the results of their efforts. E.g., the World Bank has developed an increasingly rigorous system of assessment and evaluation over the past thirty years. However, there seems to be a gap between the high policy priority assigned to the environment and actual practice. Limiting factors are, amongst others, a lack of capacity within country and task teams of the World Bank as well as institutional capacity constraints within recipient governments and institutions.

· EXPORT CREDIT AGENCIES (ECA) cover an important sector adopting environmental and social guidelines and standards in funding. Most of the OECD Members agreed in November 2001 to implement the OECD GUIDELINES FOR CONSIDERATION OF ENVIRONMENTAL CONCERNS IN THE NATIONAL EXPORT CREDIT INSURANCE. In the recent past, major ECAs have firmly integrated environmental impact assessment for projects into their lending practices. Nevertheless, many projects are subject to criticism by NGOs. As a consequence, in

6 Environmental and Social Audit December 2003 the OECD announced an agreement to strengthen their common approaches for evaluating the environmental impact of infrastructure projects supported by their governments’ ECAs.

Coordination, Participation and Capacity Building – Key Criteria for Best Practice Based on the methods and examples analysed above, the following principles should be regarded for identifying best practice: · Adoption of GENERAL PRINCIPLES, such as the Safeguard Policies of the World Bank, and specifying them with a view to defining OBJECTIVES AND TARGETS early in the process, · CLOSE COORDINATION of the DIFFERENT STRATEGIC LEVELS, ensuring, that screening and assessments of projects are intertwined with policy and programme objectives, · Allowing wide but structured and moderated PARTICIPATION OF STAKEHOLDERS THROUGH- OUT all relevant stages of the programme and project level, · ENHANCING TRANSPARENCY OF THE DECISION-MAKING POCESSES not only by participation, but also by providing information in an appropriate and appealing manner, · GUARANTEEING INDEPENDENCE AND A HIGH QUALITY of Audits and Evaluation, · Making available SUBSTANTIAL RESOURCES – including expertise, finances, time and technical support, such as operational working papers, · Ensuring the availability of instruments to take CONSEQUENCES IN CASE OF NON COMPLIANCE.

Structural Funds – An Ambitious Legislative Framework and the Challenge of Its Implementation THE LEGAL BASIS for Structural Funds was revised in 1999. Supplementary to the main objectives of the Funds, the protection and improvement of the environment, the elimination of inequalities and the promotion of the equalities between men and women were defined as horizontal themes. In addition, ‘partnership’ was formulated as a basic principle. In determining the most representative partners, Member States are required to create a wide and effective association of all relevant bodies.

The programme cycle includes monitoring and reporting measures, amongst others by the means of environmental and social indicators. A mid-term evaluation after three years and an ex-post evaluation three years after programme completion have to be carried out by the Member States and the Euro- pean Commission. An external controlling institution is the European Court of Auditors, also taking into account environmental and social aspects.

Although the legislative framework makes Structural Funds an appropriate instrument to foster environmental and social objectives in the European Union, their implementation is still challenged. Time and again NGO’s or auditors identify projects that disregard or even counter environmental and social objectives. Even though environmental and social objectives enjoy a high priority on the policy level, implementation on the local level within Member States is obviously not always appropriate.

7 Environmental and Social Audit How to Strengthen Environmental and Social Objectives in the Framework of Structural Funds? INDICATORS are considered important instruments to ensure that environmental and social aspects are taken into consideration in the Structural Funds´ programme cycles. In the recent past, numerous sets of indicators have been developed. Nevertheless, up to now, there has been no single agreed set of indicators available. The study discusses the feasibility and limits of a consistent set of indicators and comes to the conclusion that indicators should be regarded as an essential part of the processes. Pro- cedures to develop indicators should consider the diverse functions which indicators must fulfil at the different stages of the programme and project cycle. Thus, the concept proposed in the study, distinguishes between indicators to · describe gaps in the regional situation within the programming phase, oriented at, amongst others, the European Union’s strategic objectives (context indicators), · support learning processes at measure and project level (specific indicators) and · to describe the appropriateness of procedures established in the Member States in order to integrate environmental and social demands into the Structural Funds (process indicators).

Recommendations according to Indicators Anchoring the Union’s Environmental and Social Objectives at the Regional and Local Level · A DIALOGUE PROCESS should be established to agree on a set of objectives, derived from the EU strategies on environmental and social objectives, and appropriate context indicators, which should then be taken into consideration in the developing plans of Member States. Criteria and Indicators to Measure Environmental and Social Mainstreaming of Structural Funds Programmes · A SET OF CRITERIA should be developed in a participatory process to describe how the Mem- ber States ensure that environmental and social concerns have a high priority in their Struc- tural Funds programmes and projects. These criteria may include aspects such as participation, capacity building, and procedures for prioritising and assessing projects.

Moreover, external performance AUDITS by financial and controlling institutions are important controlling tools. In the framework of Structural Funds, they complement the monitoring and evaluation procedures established in Member States and the European Commission. With the present study, a first suggestion for procedures has been worked out and should be further specified in a pilot project. Amongst others, the procedures described include questionnaires for an audit of the management system on the programme and project level.

8 Environmental and Social Audit

Recommendations concerning Audits · COORDINATION BETWEEN EVALUATION AND AUDIT: Approaches for assessing, monitoring, evaluating and auditing programmes and projects should be aligned among the evaluating authorities and the financial institutions (e.g. by standardised checklists for appraisal, derived from strategic objectives) in order to enhance synergies. · ENHANCING MOTIVATION FOR PERFORMANCE AUDITS IN NATIONAL CONTROLLING INSTITUTIONS: Member States should be called upon requiring their payment authority and their controlling institutions to include environmental and social aspects in their lending activities and auditing schemes

MAINSTREAMING ENVIRONMENTAL AND SOCIAL CONCERNS INTO STRUCTURAL FUNDS: Since horizontal themes have been explicitly embedded in the Structural Funds legislative framework, many innovative methods to put these requirements into practice have been developed. The approaches include participation, capacity building, and procedures for prioritising projects, assessments and evaluations. In the current period substantial experience has been gathered on how to integrate horizontal themes into Structural Funds. In the context of the forthcoming revision of Structural Funds, these experiences should be evaluated and serve as an input for the next programme period.

Recommendation Concerning the Processes Used in order to Mainstream Environmental and Social Concerns into Structural Funds Setting up a Participatory Process · A DIALOGUE PROCESS should be initiated, involving all Member States and representatives of the Union. This panel of delegates should first and foremost aim at identifying best practices and work out guidance papers for mainstreaming environmental and social concerns in Structural Funds. How to organise the processes in detail, should be up to each managing authority at Member State or regional level. · Results on environmental and social aspects from the findings of the audits, monitoring, and evaluation should be used as the basic information for the ALLOCATION OF THE PER- FORMANCE RESERVE. The General Provisions on Structural Funds from 1999 do not explicitly require environmental and social indicators as a part of the performance indicators.

Outlook Summarized, the legislative and institutional framework of Structural Funds is appropriate for promoting the social and environmental objectives of the European Union. Moreover, at Member State level there are promising approaches in use to strengthen environmental and social concerns in the Structural Funds programming and implementation. These procedures are worth further developing – in particular as the protection of environment and natural resources as well as securing a sustainable society are crucial pre-conditions to ensure the Union’s economic potential in a long-term perspective.

9 Environmental and Social Audit 1. Background 1.1 European Funds and the Integration of Environmental and Social Concerns The European Union's Funds are important instruments for promoting not only economic but also social and environmental objectives of the European Union. Moreover, all EU funding is channelled towards precise objectives and priorities under the various common policies, which, in turn, are based on provisions of the Treaties.

Most EU funding is not paid directly by the European Commission but via the national and regional authorities of the Member States. This is the case for payments under the Common Agricultural Pol- icy and most payments under the structural policy financial instruments (European Regional Devel- opment Fund, European Social Fund, European Agricultural Guidance and Guarantee Fund and Fi- nancial Instrument for Fisheries Guidance), which make up, in money terms, the great bulk of EU funding. Structural Funds and the Cohesion Funds are both aiming at a more balanced socioeconomic development in the Union, essentially by transferring funds from the wealthier to the poorer regions of the Union through specific programmes. For the 2000-2006 period 195 billion Euros will be spent by the four Structural Funds (see above), and a further 18 billion Euro is allocated to the Cohesion Fund.1

In the Communication on Environment Policy Review of 2003, the Commission emphasises the importance of Structural Funds for implementing environmental and social objectives. “Cohesion policy, which represents one third of the EU budget, makes a significant contribution to implementing environmental legislation. (...) The use of structural funds requires compliance with Community policies and instruments including those for environment and sustainable development. In this way, structural funds constitute an important lever for the implementation of environmental legislation. (...) Taking further steps towards establishing sustainable development as an overarching objective of cohesion would usefully extend possibilities for structural funds’ contributions to environmental policy – alongside economic and social priorities.” 2

Indeed, the legislative framework of funding has been integrating environmental and social aspects in recent years. Reforms of the Structural Funds from 1993 and 1999 already aimed on stronger consideration of horizontal concerns such as environmental and social demands3 in the planning and implementation of Structural Funds interventions.4

1 europa.eu.int/comm/regional_policy/intro/regions4_en.htm 2 European Commission (2003 a): COM (2003) 745 final 3 so called “horizontal themes” 4 Council Regulation (EC) No 1260/1999, Article 1.

10 Environmental and Social Audit reason lies in the lack of established evaluation and controlling procedures along these dimensions.5 Thus, despite a long-standing debate on indicators and evaluation methodology it remains a challenging task, to find out whether expenditures actually contribute not only to their specific objectives, but also to the Union’s overarching environmental and social objectives set up on strategic policy level6.

1.2 The Study’s Purpose Against this background, the European Parliament's Committee of Budgetary Control requested a study on "Environmental and Social Audit“. The purpose of the study is to identify methods of measuring and auditing the contribution of EU funds to economic development while at the same time considering its effects on the quality of life of the workforce and their families, of the local community and of society at large in a long-term perspective. Therefore, both social and environmental factors have to be considered.

In a questionnaire delivered for further clarifying the study’s scope the subject was specified more precisely as follows: “The study should focus on Structural Funds-expenditure (= Structural Funds and Community Initiatives) in general”. As a focus for case studies to specify a matrix of criteria, the study’s initiators suggested ESF measures and projects.

At the same time, the study’s scope was extended: The focus should be laid on “ex-post evaluation as well as on the early stage of decision making. The intermediary e.g. executive steps should not be excluded.”7 Oriented at these, the study should deliver concrete recommendations. Amongst others, “indicators and methods useful for measuring social and environmental progress, especially for evaluating the added value and other effects of Community funding should be identified”. Furthermore, the work should “identify goals for procedural and specific organisational improvement so that environmental and social auditing could be integrated into existing management systems within the European Institutions.“

1.3 The Study’s Approach Basic Investigations As a baseline for the recommendations the study specification required the investigation of the social and environmental objectives already defined at European policy level; the objectives are structured and compiled to provide a basis for deriving areas of auditing procedures and indicators (chapter 2).

Another fundamental element required was the analysis of best practice in the evaluation and auditing of funds (chapter 3). Amongst others, special focus is laid on the following questions:

5 IRPUD and nova (2003). 6 E.g. objectives defined in the Lisbon Process, the EU Sustainability Strategy or the Cardiff Process 7 Reply of the European Parliament’s Budgetary Support Unit on IFOK questionnaire from 23 January 2004

11 Environmental and Social Audit

· Which instrument is suitable in which phases of the programme and the project cycle? · Are quantitative indicators developed and adopted? · Who is responsible for conducting assessments and evaluations? · Is participation an integrative part of the programme and project cycle and to what extent is it realised?

Analysis of Current Practice in the Framework of Structural Funds Building on the above, the current practice of including social and environmental criteria in the Pro- gramme Cycle of Structural Funds was analysed (see chapter 4). Here, the following aspects were taken into consideration: · the legal requirements on the programme cycle, including the monitoring and evaluation procedure for EU Structural Funds · the debate on indicators. · the current practice of the integration of so-called “horizontal themes”.

The study is primarily based on analysis of the documents listed in chapter 7. However, to ensure practicability of the recommendations, 15 interviews were carried out both in person and by telephone (see references in chapter 7.4). Moreover, first results were presented and discussed during an expert workshop on 16 March 2004 at the European Parliament in Brussels, involving representatives from non-governmental organisations (NGOs), the European Commission, the European Court of Auditors, the European Investment Bank (EIB) and Member States’ administration (see references, chapter 7.5).

Recommendations on Implementation An important intention of the study is to formulate recommendations appropriate to be implemented into existing management systems within the European Institutions (chapter 5). The study does not only focus on Indicators and Audits, but according to the extended scope of the study also organisational measures to enhance the consideration of environmental and social objectives in programming, implementation and evaluation of Structural Funds are elaborated.

12 Environmental and Social Audit 2. Environmental and Social Strategies and Objectives within the EU In recent years, the strategic discussion on objectives and indicators in the European Union has intensified considerably, resulting in a generally increased awareness of the environmental and social subjects within the European administration. However, there is a substantial difference between debates on the level of the European Union and the implementation of funded actions in the Member States. Thus, structuring and compiling the ongoing discussion is an important step not only to facilitate the communication of the objectives but also to build a baseline for identifying areas of audit procedures. The following table gives an overview of the different key documents/ key summits dealing with EU targets in the area of social and environmental policy.

Key Documents/Key summits Used version Social Environmental Objectives Objectives EC-Treaty 2002 X X Lisbon Strategy 2000 X The Sustainability Strategy 2001 X X Environmental Action Programme 2002 X Cardiff Process Starting 1998 X Broad Guidelines of the Economic Policies 2003-2005 2003 X X Guidelines for the Employment Policies of the Member States 2002 X Social Inclusion Report 2003 X

2.1 Environmental Policy EC-Treaty Environmental policy is a policy area where the European Union holds legislative competence. Sev- eral articles of the EC-Treaty determine the objectives, principles and competences concerning environmental policy within the European Union. Article 2 declares that one main target of the EU is to take care of a high level of protection and improvement of the quality of the environment. Protection of the environment is also a target of the Structural Funds. Article 174 (former 130r) sets the following objectives of EU environmental policy: · preserving, protecting and improving the quality of the environment; · protecting human health; · prudent and rational utilisation of natural resources; · promoting measures at international level to deal with regional or worldwide environmental problems.

Concerning the integration of environmental targets into the different policy areas Article 6 of the EC- Treaty defines: “Environmental protection requirements must be integrated into the definition and

13 Environmental and Social Audit implementation of the Community policies and activities referred to in Article 3, in particular with a view to promoting sustainable development.“8

Cardiff Process In order to put into effect Article 6 of the EC Treaty, the European Council in Luxembourg (Decem- ber 1997), asked the Commission to prepare a strategy on environmental integration into the various policy areas of the European Union. The Cardiff European Council (June 1998) agreed on the Com- munication of the European Commission “Partnership for Integration”9: The objective of the Commu- nication was the integration of environmental demands into the European Union policies. The Council invited all relevant formations of the Council to establish their own strategies for giving effect to environmental integration within their respective policy areas. These were requested to set environmental objectives and to identify indicators. The policy areas Transport, Energy and Agriculture were invited to start this process. The European Councils of Vienna and Cologne (December 1998 and June 1999) requested further policy areas to start the process such as the Development, Industry and Inter- nal Market, Economic and Financial Affairs, General Affairs and Fisheries.

The Sustainability Strategy At its meeting in Helsinki in December 1999 the European Council invited the European Commission “to prepare a proposal for a long-term strategy dovetailing policies for economically, socially and ecologically sustainable development.”10 The European Commission prepared this strategy which was discussed at the European Council at Gothenburg in June 2001 in order to achieve sustainable growth.11 The Gothenburg Council softened the more concretely stated targets which were developed in the Commission’s Communication to the following environmental objectives: · “Combating climate change, · Ensuring sustainable transport, · Addressing threats to public health, · Managing natural resources more responsibly.”12

By integrating social, environmental and economic issues into one overall strategy, the Lisbon Strat- egy, which was developed one year earlier, was extended. The Lisbon Strategy had originally been developed in 2000 at the European Council of Lisbon and set a new strategic goal for the Union: “to become the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion”13 While Lisbon integrated economic and social matters into one strategy, the Sustainability Strategy added the environ-

8 European Communities (2002b); Consolidated Version of the Treaty in the Union. 9 EC (1998): Communication from the Commission to the European Council: Partnership for Integration. IP/98/471. 10 European Council (1999): Presidency Conclusions Helsinki European Council 10 and 11 December 1999. 11 European Commission (2001): COM (2001) 264 final 12 European Council (2001): Presidency Conclusions Gothenburg European Council 15 and 16 June 2001 13 European Council (2000a): Presidency Conclusions Lisbon European Council 23 and 24 March 2000

14 Environmental and Social Audit mental dimension to the Lisbon Strategy. Thus, the Sustainability Strategy builds on and completes the political commitment under the Lisbon strategy.

While the Cardiff-Process focuses on the implementation of environmental targets into the EU policy areas, the Sustainability Strategy/ the Lisbon Strategy mark important steps in the European environmental policy putting new environmental targets on the agenda.

Environmental Action Programme Since 1972 the basis of all environmental activities of the European Union have been its Environ- mental Action Programmes. The 6th Environmental Action Programme (EAP) for 2002-2012 was defined as the environmental component of the Community’s strategy for sustainable development. Moreover, this programme emphasises the Cardiff-Process in terms of furthering the integration of environment into other policy areas.

In detail the Programme aims at:

· “a maximum global temperature increase of 2° Celsius over pre-industrial levels and a CO2 concentration below 550 ppm …. In the longer term this is likely to require a global reduction in emissions of greenhouse gases by 70% as compared to 1990 as identified by the Intergovernmental Panel on Climate Change (IPCC);

· protecting, conserving, restoring and developing the functioning of natural systems, natural habitats, wild flora and fauna with the aim of halting desertification and the loss of biodiversity, including diversity of genetic resources, both in the European Union and on a global scale;

· contributing to a high level of quality of life and social well being for citizens by providing an environment where the level of pollution does not give rise to harmful effects on human health and the environment and by encouraging a sustainable urban development;

· better resource efficiency and resource and waste management …, thereby decoupling the use of resources and the generation of waste from the rate of economic growth and aiming to ensure that the consumption of renewable and non-renewable resources does not exceed the carrying capacity of the environment.”14

In order to address these four areas of improvement, seven thematic strategies are being developed along a common approach independently of the specific content requirements relating to their subject matter. These are: Soil protection; protection and conservation of the marine environment; sustainable use of pesticides; air pollution; urban environment; sustainable use and management of resources; and waste recycling.

14 European Communities (2002a): Decision No 1600/2002/EC of the European Parliament and of the Council of 22 July 2002 laying down the Sixth Community Environment Action Programme.

15 Environmental and Social Audit

Broad Guidelines of the Economic Policies 2003-2005 The 1993 Maastricht Treaty first introduced a system for co-ordinating the economic policies of Member States (Article 99 of the EC-Treaty15). These Broad Economic Policy Guidelines (BEPGs) concentrate on the contribution that economic policies can make within a three years timeframe. One part of the Guidelines focuses on the impact of economic policies on environmental issues. The aim of the BEPGs is to establish the notion that economic growth must not be promoted at the expense of the environment. Therefore, the economic policies of the EU should:

· “Reduce sectoral subsidies, tax exemptions and other incentives that have a negative environmental impact and are harmful for sustainable development. Ensure, inter alia through the use of taxes and charges, that pricing of the extraction, the use and, if applicable, the discharge of natural resources, such as water, adequately reflects their scarcity and all resulting environmental damage.

· … ensure appropriate differentiation of energy taxation to deliver a more sustainable mix and level of energy consumption, and further enhance competition and network interconnection in energy markets.

· Adjust the system of transport taxes, charges and subsidies to better reflect environmental damage and social costs due to transport, thereby reducing distortions in the demand for transport services and the choice of transport modes, and increase competition, e.g. through accelerated regulated market opening, in transport modes such as freight railways to make them more competitive.

· Renew efforts to meet their commitments under the Kyoto protocol…. To this end, implement the EC greenhouse gas emissions trading scheme: draw up national allocation plans; establish national allowance registries; set up systems to adequately monitor, report and verify emissions at installation level. ....”16

2.2 Social Policy Social Policy EC-Treaty Social Quality/Social Cohesion Prime targets of the EU social policy – as confirmed in the EC treaty – are a high level of employment and of social protection, equality between men and women, Competitiveness/ Full Employment/ raising of the standard of living and quality of life, and Dynamism Quality of Work Economic Policy Employment Policy economic and social cohesion (article 2)17. Figure 1: The policies mix

15 European Communities (2002b): Consolidated Version of the Treaty in the Union. 16 European Commission (2003b): Commission Recommendation on the Broad Guidelines of the Eco- nomic. COM (2003) 170 final 17 European Communities (2002b); Consolidated Version of the Treaty in the Union.

16 Environmental and Social Audit In this context, the European Union differentiates between the concepts of social policy and employment policy and their different targets, respectively. In practice, however, both themes are mixed and not clearly delineated from one another. Figure 1 demonstrates the (more or less) theoretical differentiation between social and employment policy also showing the relationship of these policies with economic policy. 18

Lisbon Summit 2000 The Lisbon Summit 2000 (see above) declared as one of the main targets of the EU “to become the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion”. Concerning social policies this means “to restore full employment as a key objective of economic and social policy, and reduce un- employment to the levels already achieved by the best performing countries and to modernise our social protection system.” 19

Guidelines for the Employment Policies of the Member States In order to achieve the Lisbon goals and the targets set in the Social Policy Agenda the EU decided in 2002 on these guidelines with three main objectives concerning employment policy: · full employment, · improving the quality and productivity at work, and · strengthening social cohesion and inclusion. 20

Social Inclusion In addition, the European Council agreed in 2000 (Council of Nice) on the following common objectives in the fight against poverty and social exclusion: · to facilitate participation in employment and access by all to the resources, rights, goods and services, · to prevent the risk of exclusion, · to help the most vulnerable, and · to mobilize all relevant bodies.21

Furthermore, the Council decided to publish a Social Inclusion Report as a follow-up. This report formulates objectives and measures of action and identifies eight core challenges in fighting social exclusion: · developing an inclusive labour market and promoting employment as a right and opportunity for all; · guaranteeing adequate income and resources for a decent standard of living;

18 European Commission (2003c): Communication on the Social Policy Agenda. COM(2000) 379 final. 19 European Council (2000a): Presidency Conclusions Nice European Council 7, 8 and 9 December 2000 20 European Council (2003): Guidelines for the employment policies of the Member States (2003/578/EC) 21 European Council (2000b): Presidency Conclusions Nice European Council 7, 8 and 9 December 2000

17 Environmental and Social Audit · tackling educational disadvantage; · preserving family solidarity and protecting the rights of children; · ensuring reasonable accommodation for all; · guaranteeing equal access to and investing in high-quality public services (health, transport, social, care, cultural, recreational and legal); · improving the delivery of services; · re-generating areas of multiple deprivation.

Broad Guidelines of the Economic Policies 2003-2005 One part of the Broad Guidelines of the Economic Policies (BGEPs; see above) focuses on the impact of economic policies on social issues. The BGEPs were published at the same time as the Employ- ment Guidelines in order to emphasise the need for co-ordination between the two. Concerning the social part of sustainability, economic policy should:

· (whilst ensuring an adequate level of social protection) take steps to modernise social protection systems and to fight poverty and exclusion with a view to supporting the broad Lisbon objectives, notably on employment, in order to achieve an inclusive labour market and a more cohesive society for all;

· improve the functioning of markets so that they are conducive to private investment in regions lagging behind, particularly by taking steps to allow wages to reflect productivity taking into account differences in skills and local labour market conditions;

· ensure that public support, including that from EU sources, in regions lagging behind is strongly focused on investment in human and knowledge capital, as well as adequate infrastructure, and that investment programmes are designed and administered efficiently so as to maximise their impact.

2.3 Conclusions The environmental and social targets of the European Union defined by the European Council and the European Commission tackle all major policy issues in the area of environmental and social policy at European level. The number of targets is impressive and their forms vary widely from process targets to output targets, from qualitative to quantitative targets. The analysis of further documents based on the key documents investigated here would bring to light more detailed targets. However, the more complicated and detailed the targets are, the more complex is their application. Thus it is recommended, to focus on the priorities defined at strategic level.

To anchor the objectives at the Union’s level within European funding, it would be helpful to compile the relevant areas of objectives and to define some core indicators as a baseline for programming.

18 Environmental and Social Audit Aware that this is not a task possible in the framework of a study, but only in a participatory process at policy level, Annex 6.1 summarizes some objectives; derived from the papers outlined in the present chapter these targets would be suitable to build a baseline for programming and to determine indicators according to their statistical availability. However, already this list of objectives shows the complexity of the target system and the ensuing problems the EU is facing.

19 Environmental and Social Audit 3. Audits and Other Procedures to Assess Environmental and Social Aspects – Identifying Best Practice The call for tender for this study required the investigation of best practice in environmental and social auditing within the public sector, organisations and bodies. Due to the extended scope of the study, this analysis does not only focus on audits, but also covers procedures to assess environmental and social aspects during programming and implementation.

Chapter 3.1 provides an overview of the terminology relevant in the context of environmental and social audit introduced in the presented paper. Chapters 3.2 – 3.4 then describe standards, regulations and procedures that are used in well-established institutions with a long-term experience in social and environmental assessment, evaluation or audit; these were analysed in order to gain an understanding of current practice in this field. As a result of these findings, section 3.5 offers criteria for determining best practice for scrutiny procedures in the area of environmental and social aspects.

3.1 Terminology in the Framework of “Environmental and Social Audit” In the context of procedures for scrutinising policies and expenditures there are diverse terms used, such as ‘audit’, ‘evaluation’, ‘assessment’ and ‘monitoring’. To support a consistent understanding of the issues, the following provides an outline of the terminology used in this study:

· SCREEENING: a first approximation to determine whether or not a proposal should be subject to an Environmental and Social Impact Assessment (see below) and, if so, at what level of detail.22 During the screening, the projects are mostly categorised according to their potential negative or even positive impacts. Screenings can be done by experts as well as by project applicators and most screening processes are based on questionnaires and checklists.

· ENVIRONMENTAL and SOCIAL IMPACT ASSESSMENT: the process of identifying, predicting, evaluating and mitigating the biophysical, social, and other relevant effects of development proposals prior to the decision-making processes.23 Assessments can be done on a qualitative as well as a quantified basis.

· MONITORING: the ongoing review of a project or programme along physical and financial indicators. This will usually include annual reports, at least in the case of multiannual assistance.

· INDICATORS: quantified attributes or measures focussing on single, manageable, and telling components of an entire system. Indicators are used to support planning decisions, monitoring and evaluation.

22 IAIA (2003) 23 IAIA (2002)

20 Environmental and Social Audit

· The term EVALUATION is originated from the social sciences. EVALUATION covers systematic and target-oriented procedures to judge the quality, effectiveness and impacts of a plan, programme or project compared to the objectives set in the planning phase. Evaluation can be designed as self-evaluation as well as a third party-evaluation and is increasingly used as a tool to encourage reflection and debates throughout and after completion of the project. Thus, the participation of interested parties is an integrative component of the evaluation process.

· The term AUDIT is commonly used in business and financial management. AUDITS are independent reviews and examinations of records and activities in order to test the adequacy and effectiveness of procedures, to ensure compliance with established policy and implementation, and to recommend any necessary changes. In the framework of Structural Funds the term is primarily used in the context of accounting (see section 4.1); however, for many years the Court of Auditors has carried out performance audits, considering environmental and social aspects as well. Thus, these are complementary methods to evaluation. In other cases, where EVALUATION is done by independent external experts, there may be substantial overlaps between the instruments AUDIT and EVALUATION. New approaches of auditing even strengthen the involvement of stakeholders as a central element of auditing.

3.2 Procedures in the Framework of Policies In the framework of policies, various tools and procedures are used to assess and describe environmental impacts of policies, plans or programmes. An important tool is ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT, amongst others to check impacts of legislative intentions. ENVIRONMENTAL MANAGEMENT SYSTEMS (EMS), including AUDITS, mark a set of new instruments to foster the consideration of environmental aspects not only in the business but also in administrations and public bodies. Environmental and social REPORTS, in addition, are instruments already applied for many years in some countries.

3.2.1 Assessments Policies On the European level of governance a number of Communication varying assessments of social and environmental (EC) COM(2002) 276 aspects of policies have been set up (see figure 2): Programmes Identifing from experiences with the instrument covered by SEA Directive 2001/42 Environmental Impact Assessment for projects, that Projects was first established in 1985 with Directive covered by EIA Directive 85/337/EEC & 97/11/EC 85/337/EEC, Strategic Environmental Assessments Figure 2: Relation between assessments in european legislation (SEA)24 were introduced for plans and programmes

24 Council Directive (EC) 2001/42

21 Environmental and Social Audit and Impact Assessments (IA)25 for the Commission’s own major initiatives. All three instruments are applied at the planning stage of a project, programme, plan or policy initiative, respectively. The latter two are delineated briefly in the following chapter.

Impact Assessment at the European Commission Purpose In order to improve the quality and coherence of the policy development process and to contribute to a more coherent implementation of the European Strategy for Sustainable Development, in June 2002 the European Commission published a Communication on the new approach to assessing the impact of its major initiatives.26 From 2004, all newly proposed legislation and non-legislative measures will have to be assessed for economic, social and environmental impacts. This includes regulatory proposals such as decisions, directives and regulations, as well as non-regulatory proposals, such as white papers, expenditure programmes or communications on policy orientations. The Commission will use the impact assessment to present the rationale for its proposals to Parliament, Council and the public.

The Commission’s decision to introduce impact assessment does not relieve the obligation to carry out ‘ex-ante evaluations’ (focussing on cost-effectiveness of budgetary expenditure) of programmes and actions resulting in expenditure from the general budget of the European Commission. All other former assessment obligations are, however, replaced by impact assessment from the Commission Work Programme 2003 onwards. These include SME fiches, environmental assessment, gender assessment, business assessments, and regulatory assessments.

Process According to the Commission’s Technical Guidelines27 impact assessment (IA) is “the systematic analysis of the problem addressed by the proposal concerned, the objective it pursues, the alternative options available to reach the objective, their likely impacts, and respective advantages and disad- vantages, including synergies and trade-offs”. The Commission’s Impact Assessment does not work as a “fiche” to be filled in, but a process providing a “step by step”, structured way to raise and then deal with questions and issues. The process is divided: First, the policy unit of the lead Directorate- General prepares a preliminary impact assessment, mandatory for all above named proposals, which is then submitted with the DG’s annual Policy Strategy (APS) and includes a problem identification, the objective of the proposal, policy options, and expected impacts – positive and negative.

On the basis of this preliminary IA the Commission will then decide in its Annual Policy Strategy decision and/or Work Programme which proposals require an extended IA. For this, the guiding principles and the reporting format will generally be the same for all; however, their form, content, vol-

25 European Commission (2002): Communication from the Commission on Impact Assessment, COM(2002) 276 final 26 European Commission (2002): COM(2002) 276 final 27 EC (without year): Impact Assessment in the Commission. Guidelines

22 Environmental and Social Audit ume and degree of detail will vary widely according to the nature of the proposal and its expected significance – applying the principle of proportionate analysis.

For the extended IA, too – as for the preliminary IA – the lead Directorate-General is responsible. However, it must inform, consult and coordinate with other interested DGs at a very early stage. For initiatives with a high crosscutting dimension and/or of major importance an interdepartmental group will coordinate the extended IA. Generally, where appropriate, the DGs should consult with interested parties and relevant experts in order to benefit from their knowledge.

Examples from Member States for Impact Assessment of Policy Netherlands: Environmental test (E-test), required by national government and prepared by the responsible ministry, assesses the environmental effects of the policy in question and is linked to a separate business test (B-test), a feasibility and an enforceability test. The goal of the E-test is to help make the policy making process more balanced by assessing the effects, ensure that the best possible information on the effects is made available and that there is an integration of environmental policies in other domains. The E-test results present the impacts, but do not make recommendations for policy decisions; this is left to the policy makers. Until April 2002 around 50 E-tests had been carried out. It is, however, unclear whether any position or policy decision has been significantly changed on the basis of the information from the E-test. A helpdesk – the Support Centre for Draft Legislation – is a valuable resource for the various ministries (especially given the “assessment fatigue” due to more than 30 policy tests and assessment procedures).28

Strategic Environmental Assessment Purpose The objective of a Strategic Environmental Assessment (SEA) is to provide a high level of environmental protection: This is done by ensuring that an environmental assessment is carried out for certain plans and programmes prepared by public authorities29 that are likely to have significant effects on the environment.30 A key objective of the SEA process is to help inform decision-making processes. Amongst others, the regulation on Structural Funds from 2007 will most likely demand an ex-ante assessment of the programmes according to the SEA directive.

28 DEFRA and IEEP (2002) 29 In contrast, the Project level EIA primarily concerns private developers. Council Directive (EC) 97/11: Environmental Impact Assessment is an instrument with a long-standing tradition: Since the first Directive in 1985 Member States have gathered extensive experience in the implementation of the Directive, especially with regards to impact of the environment and nature conservation. With its amendment in 1997 the Directive was complemented with extensive guidance documents. Nevertheless, the quality of the EIA is largely dependent on the arguments of experts working out the environmental impact study. Results of the assessment are often handled with scepticism and thus fail to serve as a basis for a final evaluation. Rather it is useful as the foundation for further discussions between the interested parties. 30 These include agriculture, forestry, fisheries, energy, transport, waste management water management, telecommunications, tourism, town and country planning and land use, as set out in Article 3, Directive 2001/42/EC p.9

23 Environmental and Social Audit Process The SEA can be described as a systematic process for evaluating the environmental consequences of proposed policy, plan or programme initiatives in order to ensure they are fully included and appropriately addressed at the earliest stage of decision-making on a par with economic and social considerations. An important part of the procedure is the consultation of partners. The procedure of carrying out an SEA comprises the following components: · assessment of the environmental situation – developing a baseline, · objectives, targets and priorities, · draft development proposal (plan/programme) and identification of alternatives, · environmental assessment of the draft proposal, · environmental indicators, · integrating the results of the assessment into the final decision on plans and programmes.

The result of a SEA is an environmental report. In deciding on the scope (or content) of a SEA report, and the level of detail, the responsible public authority will need to consult environmental authorities (to be defined by the Member States). Having then prepared the report, the environmental authority and the wider public must be given an ‘early and effective opportunity’ to comment on the draft plan or programme and accompanying SEA report.

Article 8 of the Directive states that the SEA report – along with the results of the consultations – should be taken into account during the preparation of the plan and programme and before its adoption. Having done so, the Member States will need to ensure that the environmental considerations were integrated into the plan or programme and the results are made available to the public. The Di- rective also requires Member States to ensure arrangements are in place for proper quality control, and to inform the Commission of what these are.31

International Association for Impact Assessment International Association for Impact Assessment (IAIA) was organized in 1980 with the aim to become the leading global authority on best practice in the use of environmental and social impact assessment for informed decision-making regarding policies, programmes, plans and projects. IAIA activities seek to develop approaches and practices for comprehensive and integrated impact assessment, improve assessment procedures and methods for practical application and provide professional quality assurance by peer review and other means. IAIA involves people from many disciplines and professions. As of October 2003, members numbered more than 2,500 and represented more than 100 countries; affiliates are operating in e.g. New Zealand, South Africa, Ontario (Canada), Quebec (Can- ada), Western and Northern Canada, Beijing, Cameroon, Ghana, Kenya, Nigeria, Senegal, and Portu- gal.32

31 For further comment see www.eeb.org/activities/env_impact_assessment/main.htm 32 www.iaia.org

24 Environmental and Social Audit Amongst others, IAIA drew up ‘Best Practice for Environmental Impact Assessment’ in co-operation with the UK Institute of Environmental Assessment33, and provides a compilation of International Principles for Social Impact Assessments.34 According to IAIA, the term environment should be defined in a broader sense including social and human dimensions. Best practice, thus, respects also human rights, just, fair and transparent decision-making and the broad acceptance of projects in the communities concerned. Moreover, local knowledge, experience and acknowledgement of different local cultural values should be incorporated in any assessment.

3.2.2 Environmental Management Systems, including Environmental Audits An important impulse to implement environmental management standards not only in businesses but also in public bodies was provided by the EMAS Regulation35 and the international standard ISO 1400136. Both these describe an Environmental Management System (EMS) aiming at continuously improving environmental performance of an organisation. An ENVIRONMENTAL AUDIT is a compulsory element of the management cycle (see figure 3).

As part of an EMS, the organisation in question defines environmental objectives as well as programmes for their implementation and sets up Environmental Management Policy Review responsibilities, procedures and methods that in- Environmental Audit Continuous tegrate environmental issues into the operational Improvement activities. During the environmental audit37 at the Planning Checking and end of the cycle it is then checked whether the Corrective Action established procedures are appropriate to reach

Implementation the determined objectives. According to the and Operation EMAS Regulation an environmental audit “shall mean a management tool comprising a systematic,

Figure 3: The stages within an environmental documented, periodic and objective evaluation of management system the performance of the organisation, management system and processes designed to protect the environment with the aim of facilitating management control of practices which may have an impact on the environment, and assessing compliance with the environmental policy, including environmental objectives and targets of the organisation.” Annex 2 of the EMAS Regulation further specifies requirements concerning internal environmental auditing.

Supplementary to the internal audit an external accredited verifier checks whether the environmental management system implemented in an organisation complies with the requirements of the EMAS

33 IAIA (2002) 34 IAIA (2003) 35 Council Regulation (EC) No 761/2001 36 ISO (1996) 37 The analog terminology used in ISO 14001 is Management Review.

25 Environmental and Social Audit Regulation. In order to guarantee a high quality of the verification, each Member State had to establish a system for quality assurance. Environmental verifiers have to show satisfactorily that they cover several fields of knowledge, such as EMSs, legislative, regulatory and administrative requirements on environmental subjects or technical aspects of the sectors for which they are to be accredited. An ac- creditation body assesses the verifiers´ competency and serves as a supervisor of the verifiers’ work at the organisation under scrutiny.

Environmental Management Systems in Public Bodies The EMAS Regulation as well as ISO 14001 are increasingly seen as an approach to handle environmental and social aspects also in the framework of policies. Since the extension of the Eco- Management and Audit Scheme (EMAS) in 200138, not only businesses but also public bodies can be verified under the EMAS scheme. In practice, EMAS mainly is applied in local authorities. Since the early 1990’s considerable experience has been gained in the United Kingdom: To date, about 20 local authorities have implemented EMAS, and further 30 have adopted ISO 14001.39 The main focus is laid on the direct environmental effects caused by infrastructure such as buildings and car pools; less attention is paid to the indirect environmental effects caused by plans, programmes and policies. There is still a lack of consistency in the methodology how to integrate services and products of those organisations in EMS.40 To assess whether their products and services have any indirect environmental consequences, tools such as environmental and social assessments, evaluations or reports already used in the area of policies are also applied as tools in the framework of environmental management systems. Example: Austrian Federal Ministry of Agriculture, Forestry, Environment and Water Management The Austrian Federal Ministry of Agriculture, Forestry, Environment and Water Management implemented an Environmental Management System (EMS) according to EMAS at its site "Stubenbastei5". In 2003, an environmental statement was verified and published.41 Public procurement and planning or administrative decisions were identified as activities causing indirect environmental effects. In addition, the Ministry plans to integrate their “products” – such as legislation into the EMS. However, up to now there are no procedures available how to deal with these aspects.42 Thus, the management system described in the environmental statement still excludes the indirect effects of legislation.

38 Council Regulation (EC) No 761/2001 39 Wynne, A. (ACCA) (2004) 40 There is a „Guidance on the identification of environmental aspects and assessment of their significance“ available on the EMAS-Help-Desk which include the indirect environmental effects of products and services, but which still is quite general and does not really provide support for the application in the field of policies. See: europa.eu.int/comm/environment/emas/pdf/guidance/guidance06_en.pdf 41 BMLFUW (2003) 42 Telephone interview with Dörthe Kunellis, BMLFUW, 22 March 2004

26 Environmental and Social Audit 3.2.3 Environmental and Social Accounting, Auditing and Reporting Social and environmental (i.e. sustainability) accounting, auditing and reporting is perceived as an important tool for promoting more sustainable development in private, non-profit and public sector organisations, and especially external reporting is thought to enhance transparency for external stakeholders.

The call for environmental and social accounting has not been heeded to the same extent as in the area of financial impacts, but in recent years many standards and guidelines have been developed to improve their quality and consistency, mainly within business.43 Most guidelines provide principles and a set of process standards in order to support overall performance – social and ethical as well as environmental and economic. The process standard is built on a dynamic model including planning, accounting, auditing and reporting. To support each of these stages, structures and systems are developed to strengthen the accounting, auditing and reporting process. Thus, emphasis lies on the process rather than on simply a mere report. Since embedding of appropriate

Figure 4: The AA 1000 framework procedures for accounting, auditing and reporting (see figure 4) is seen as a crucial element of the standards44, social and environmental accounting can be regarded as a management tool, which can help an organisation to plan and organise its activities. A major principle is that each process stage is permeated by the organisation’s engagement with its stakeholders.

In addition, principles for reporting were developed to enhance the quality and credibility of reports (see figure 5): ● Transparency: Full disclosure of the processes, procedures, and assumptions in the report preparation ● Inclusivity: Ensuring systematic engagement of stakeholders ● Auditability: Designing transparent procedures for collecting and editing data and information ● Sustainability Context: Describing the organisation’s performance in the larger context of ecological, social, and other limits or constraints ● Comprehensiveness: Including all necessary information consistent with the declared bounda- ries, scope, and time period.

43 Amongst others, see: Global Reporting Initiative (GRI) (2002); AccountAbility (1999), AccontAbility (2003), Social Accountability International (2001). 44 AccountAbility (1999), AccontAbility (2003).

27 Environmental and Social Audit

● Relevance: Degree of importance assigned to a particular aspect, indicator, or piece of information ● Neutrality: Balanced account of the reporting organisation’s performance ● Comparability: Ensuring, that reports can be compared with previous reports ● Accuracy: Achieving the degree of exactness and a low margin of error in reported information necessary for users to take decisions with a high degree of confidence ● Clarity: Ensuring that the report is comprehensible, while still main-

taining a suitable level of detail Figure 5: Principles of good reporting (GRI, 2002, p. 23) ● Timeliness: Ensuring, that information is up to date.

On the whole, most approaches aiming at a high quality of environmental or social accounting, auditing and reporting focus on reports delivered by companies. However, public bodies can also apply these principles. Usually, stakeholder involvement can be seen as a basic principle to guarantee that relevant social and environmental concerns are taken into account and ensure that the demands of potential target groups will be met.

Important building blocks to monitor the national progress are environmental indicators, which for many countries form the basis of their established national environmental plans and targets, such as the Dutch National Environmental Policy Plan (NEPP), the German “Umweltbarometer”, and the “Nationaler Umweltplan” in Austria.

28 Environmental and Social Audit

Examples Netherlands: The National Environmental Policy Plan The Netherlands can be seen as pioneers in national environmental strategies. In 1989, the first Na- tional Environmental Policy Plan (NEPP) was published as a framework for measures and activities to protect the environment. The NEPP gives a high priority to the cooperation between government and other sectors, such as businesses, nongovernmental organizations, and citizens.

Every four years, the NEPP is revised and updated. The current NEPP was published in 2001. The Netherlands utilize two types of environmental review:

● ENVIRONMENTAL MONITORING largely lies in the responsibility of the National Institute for Public Health and Environmental Protection (RIVM), which publishes the "National Envi- ronmental Outlook" at the midpoint of each four-year NEPP programme to evaluate the current policies and make recommendations for the next NEPP. RIVM has developed environmental indicators based on the issues defined in the NEPP. Indicators are weighted by their absolute importance to the environment and aggregated to show precisely how far the Neth- erlands is from achieving sustainability, both as a sum total and and for each of the individual themes. ● Moreover, environmental policy is regularly adjusted based on PERFORMANCE MONITORING. The Ministry of Spatial Planning, Housing and Environment publishes a yearly "Environ- mental Program", which assesses the current NEPP. The country's basic environmental law, the Environmental Management Act requires four-year Policy Evaluation Exercises of the current NEPP and recommendations for its successor plan.45

Newfoundland and Labradour: Strategic Social Plan In the province of Newfoundland and Labrador in Canada, a framework for a new Strategic Social Plan was established in 1998. The plan identifies strategic directions, processes, and outcomes to guide the government’s long-term actions. Gardrails of the plan include the creation of partnership for social development, a more integrated approach to social and economic development and building community capacity. The Strategic Social Plan was to be phased in over two years and its progress was evaluated in a social audit process, based on a document and literature review as well as interviews with 119 individuals (including key individuals who have been involved in the early design and development of the Strategic Social Plan, representatives of government departments, representatives of community-based agencies). In addition, eight learning discussion groups were held in four regions. The results are published in a so-called ‘Learning Study’. 46

45 www.rri.or, www2.minvrom.nl/pagina.html?id=5037, www.netherlands-embassy.org/article.asp?articleref=AR00000287EN 46 Government of Newfoundland and Labrador (2003)

29 Environmental and Social Audit 3.2.4 Environmental and Social Audits in Financial Control Institutions More and more financial controlling institutions perceive auditing processes as a reviewing instrument not only regarding the correct financial project implementation and processing but have widened their view towards environmental, social and ethical aspects. Accordingly, the European section (EUROSAI)47 of the worldwide organisation of Supreme Audit Institutions (INTOSAI's), has founded a specific WORKING GROUP ON ENVIRONMENTAL AUDITING with close to 30 Members that was formally established in 1999 after briefly existing as INTOSAI's Regional European Working Group on Environmental Auditing.

Its goal is to promote the involvement of Supreme Audit Institutions (SAIs) in international environmental audits in Europe and to exchange experiences in this area, guided by the Supreme Chamber of Control of Poland as the Group's Coordinator supported by five Sub-coordinators (the Netherlands for Western Europe, Norway for Scandinavia, Malta and France for the Mediterranean Region and Ro- mania for the Black Sea Region). The obligations and tasks of the Coordinator include launching initiatives to involve new European SAIs in the Group's work, with particular emphasis on extending the Working Group to include SAIs from Central and Eastern European countries; disseminating documents, guidelines, standards, methods and techniques referring to coordinated and concurrent environmental audits; exchanging information on the findings of environmental audits and experience gained from them; initiating international audits in various regions of Europe (especially in the Cen- tral Europe); promoting the Working Group's activities by disseminating information on the internet and organising workshops and meetings with the Coordinator.

47 EUROSAI was founded in 1990 and groups together 40 Supreme Audit Institutions from European countries. The Congress (general meeting of the members of EUROSAI) held every three years, is EUROSAI's supreme authority.

30 Environmental and Social Audit

Example National Audit of Animal Protection in Poland UNDERTAKEN BY THE SUPREME CHAMBER OF CONTROL from September 1999 to January 2000, the audit aim was to investigate and evaluate measures taken by public administration bodies and other organisational units (inter alia economic entities and non-government organisations), aimed at animal protection and at ensuring that animals have appropriate living conditions. The audit covered the treatment of animals living in the wild as well as animals living in man-made environments and investigated the period from October 1997, i.e. when the Act on Animal Protection entered into force, until September 1999.

The audit’s SCOPE of enquiry included inter alia the following: legal provisions regulating issues connected with animal protection; fulfilment by public administration bodies of tasks assigned by the Act on Animal Protection and other legislation connected with the protection of fauna and living conditions of animals in shelters, breeding and purchasing centres, and at all places, where animals are gathered, kept, purchased and slaughtered. The audit was conducted in 133 units, among them the Ministry of the Environment, the Ministry of Agriculture and Rural Development, the Scientific Re- search Committee, the Chief Veterinary Inspectorate, district veterinary inspectorates, and town and municipal offices. In addition, the Department of Environmental Protection coordinated and members of the Department of Agriculture and Food Economy participated in the audit.

The summary report on these audit findings has been forwarded to all relevant executive and legislative bodies, including the President of the Republic of Poland, the Speakers of the Seym and the Sen- ate, the Chairman of the Constitutional Tribunal, and the Prime Minister. Moreover, the findings of the audit were discussed in the national press and local press.

In RESPONSE to the “Summary Report”, the Supreme Chamber of Control was informed i.a. that eight regulations to the Act on Animal Protection had been drafted. In April, 2000, 17 local ethics committees were appointed; they will give opinions on the acceptability of tests on animals and will ensure proper supervision of these tests. The Ministry of the Environment undertook to collect estimate data on the population sizes of selected protected animal species, as the concept of the currently implemented system for monitoring nature provides for the monitoring of endangered animal species. The Department of Environmental Protection will continue to monitor the overall implementation of the audit recommendations.48

48 www.nik.gov.pl/intosai/k_pl3_an.html

31 Environmental and Social Audit 3.2.5 Environmental and Social Audits for Policy Institutions Not only financial institutions carry out environmental and social audits. Depending to their political traditions, some countries also have established auditing institutions to monitor the success of their policy strategies. An example is the Commissioner of the Environment and Sustainable Development in Canada.

Commissioner of the Environment and Sustainable Development in Canada The Commissioner assists parliamentarians in overseeing the federal government's efforts to protect the environment and foster sustainable development: He monitors the extent to which the governmental departments have implemented the action plans and have met the objectives outlined in their strategies. Within the Office of the Auditor General (OAG) of Canada, the Commissioner heads a specialized unit that is devoted entirely to conducting environmental audits of the government's activities. The Commissioner works with over 35 highly qualified interdisciplinary staff members. 49

Petition Process - An Act to Involve the General Public in the Audit Process In 1995 an environmental petitions process was created – a formal way for the public to ask federal departments questions about environmental and sustainable development issues. In this process, resi- dents of Canada send a written petition to the Auditor General of Canada. Petitions must relate to environmental matters that are the responsibility of specific departments and agencies – the same entities that are required to prepare and implement sustainable development strategies. On behalf of the Auditor General, the Commissioner forwards the petitions to the appropriate federal ministers. The minister must respond to the petition within 120 days. The Commissioner monitors the status of the petition and reports the findings in her annual report to the House of Commons.

As of 18 July 2003, 98 petitions had been received on topics such as genetically modified crops, abandoned rail lines, timber harvesting in the north of the country, environmental assessments, inva- sive species, and pesticide labelling and advertising.50

49 OAG (2003); R.S.C (1995); www.oag-bvg.gc.ca/domino/cesd_cedd.nsf/html/menu1_e.html, 50 www.oag-bvg.gc.ca/domino/cesd_cedd.nsf/html/menu1_e.htm

32 Environmental and Social Audit 3.3 Procedures in the Framework of Development Assistance In the framework of development assistance there have been many debates in recent years on the environmental and social impacts of expenditures, especially in the framework of large infrastructure projects. Thus, public bodies responsible for organising developing assistance in general have established procedures not only to assess the environmental and social impacts ex-ante, but also to evaluate the results of their efforts in retrospective. In the following section, the procedures of the World Bank are described as an example of assessment and evaluation being utilised in the framework of development assistance.

3.3.1 Principles and Guidelines at the World Bank Environmental and social objectives have a high priority on the World Bank’s institutional policy level, and there is a long experience of integrating environmental and social concerns and assessing the impacts of the expenditures. The World Bank is committed to the Millennium Development Goals51, and has specified social and environmental guiding principles in ten SAFEGUARD POLICIES, dealing with environmental assessment, natural habits, pest management, involuntary settlements, indigenous peoples, forestry, safety and dams, cultural property, projects on international waterways, and projects in disputed areas. For each of the ten safeguard policies a procedure for implementation is formulated. The World Bank has developed an increasingly rigorous system of assessment and evaluation over the past thirty years, based on two dimensions: · self-evaluation by the units responsible for particular programmes and activities; and · an independent evaluation by the Operations Evaluation Department (OED) of the World Bank.

The OED reports directly to the Bank's Board of Executive Directors. OED's evaluation tools used in promoting accountability and learning are project reviews, country assistance evaluations, sector and thematic reviews and process reviews. In addition, it supervises the evaluation processes of the World Bank from an independent point of view.

3.3.2 The World Bank’s Assessments and Evaluation Procedures at the Project Level The environmental and social review processes are integrated in the project cycle – from project identification to evaluation – as follows.52

· An investment officer is responsible for the PROJECT IDENTIFICATION and the ASSIGNMENT OF A PROJECT TEAM, including environmental and social specialists as appropriate.

· In the EARLY REVIEW a project description is worked out. To collect information the Envi- ronment and Social Department provides a questionnaire to sponsors. Based on this information the Environment Division screens the project and classifies it within the following cate-

51 OED (2002). 52 IFC (1998).

33 Environmental and Social Audit gories: A (relevant impacts), B (potential impacts), C (less impacts). The results are summarized in a report. After the World Bank senior management has assessed the appropriateness of the project, the project appraisal is authorized.

· During the PROJECT APPRAISAL, more detailed environmental and social data is collected and analyzed in an ENVIRONMENTAL ASSESSMENT (EA)53. The EA has to be carried out by an independent expert, financed by the borrower, and is designed for each project specifically. An important part of the EA is public consultation and disclosure. For all Category A and some B projects, the borrower consults project-affected groups and local non-governmental organizations (NGOs). Many projects, however, do not need a full EA from the World Bank´s point of view: those considered to be smaller, not to be in sensitive areas or those considered to present issues that are narrow in scope, well defined and well understood.54 The World Bank provides applicable policies, guidelines and guidance to the borrowers.

· The Environmental Assessment considers environmental as well as social issues. The Work- ing Group on Environment of the Multilateral Financial Institutions is developing a Common Framework for environmental assessment processes - with an initial focus on Environmental Impact Assessment (EIA). Guidance is also being prepared on common approaches to areas covered by EIA. The proposed Common Framework promotes convergence among Multilat- eral Financial Institutions on the institutional requirements, processes and practices in EIAs prepared for both public and private sector projects.55 Moreover, a specific approach for a SOCIAL ASSESSMENT is outlined in a Social Analysis Sourcebook (draft). This draft sourcebook neither represents operational policy nor covers minimum requirements for Bank- supported projects but describes the conceptual approach recommended by the Social Devel- opment Board as good practice. Sector-specific guidance will be prepared and issued subse- quently.56

· Bank staff reviews in detail the EA findings and recommendations and draft a final summary of the EA, including environmental and social aspects as well as requirements on consultations with affected groups and local non-governmental organisations (NGOs). Based on this report, NEGOTIATIONS with the borrower are started to incorporate appropriate covenants into loan or credit documents.

53 World Bank (1999a). 54 Such alternative approaches include e.g. specific environmental design criteria and pollution standards, acceptable for the bank, for small scale industry plants or special design criteria and construction supervision programs for small scale rural work projects. 55 World Bank (2003) 56 The main topics to guide the social assessment are: Social diversity and gender, institution, rules and behaviour, stakeholders, participation, social risk. As evaluation tools the guidebook provides questionnaires. There is no set of indicators recommended but the user is required to check whether there are

34 Environmental and Social Audit

· Signing the COMMITMENT constitutes the formal acceptance by the project company, the World Bank, and other parties (if any) of the terms and conditions under which the World Bank will finance the project. DISBURSEMENT occurs on the terms and conditions contained in the legal documentation. The investment officer, in consultation with the lawyer and environmental and social development specialists, ensures that environmental and social requirements are reflected in the World Bank’s legal documents to the project.

· The World Bank monitors the performance of all active projects to ensure compliance with environmental, social and other conditions. This SUPERVISION is based on the annual environmental monitoring reports from borrowers or on a supervision process carried out by bank staff, potentially including a project site visit.

· A final step of the project cycle is the PROJECT EVALUATION. Every task team for each project must prepare a Project Completion Report within six months of project completion57, summarizing evaluations of the actual environmental and social impacts of the project in comparison with the impacts anticipated in the environmental assessment and review. They also describe the effectiveness of the mitigation measures. The report is made available to the public. In order to validate the report, the OED reviews the report, producing an evaluation summary for internal use.

In spite of long-term experiences with assessments and evaluation, there are still some starting points for improving project design and evaluation. Thus, an evaluation study from 2000 comes to the conclusion that there is a general gap between actual practice and the high policy priority afforded to the environment. The author provides the following reasons for this gap: · the lack of clear strategies and targets relating to the environment that can be monitored, · the lack of a single authority or unit responsible for integrating and monitoring environmental performance, · the vague and generalising definition of environment, coupled with the absence of a coherent core set of internationally agreed indicators, · limited numbers of specialist environmental staff, and limited awareness among general programme staff, · institutional capacity constraints within recipient governments and institutions, and · environmental projects’ tendency to be relatively complex and more difficult to design and to implement.58

The need for capacities and tools to implement the Policies on local level is also emphasized by an OED report on social development matters from 2004: “While the Bank has done a great deal to ex-

quantitative data available to examine the key elements of social analysis. World Bank (2002) 57 World Bank (1999b)

35 Environmental and Social Audit pand its social development activities in the past decade, incorporating best practices in social development is not yet routine. In part this is due to a lack of capacity within country and task team, but it is also a function of the amount and quality of information available to support clear decision- making.” Indeed, social analysis tools are applied but often the timing is problematic and the findings are not used.59

The World Bank has also been criticised by NGOs. For example, in November 2002 the Extractive Industries Review (EIR) published a detailed report showing that in many cases the World Bank initiatives failed to support sustainable development.60 One of the suggestions given by the EIR is that the World Bank should take a holistic, multidimensional approach to assessments that examine cu- mulative impacts of projects and identify the socio-economic linkages to environmental issues.

3.3.3 The World Bank’s Cross-Sectional Evaluation on the Programme Level In addition to project-focused evaluation, the OED conducts supplementary evaluations dealing with cross-sectional subjects such as regions, countries or long-term evaluations. For example, about 25 percent of all completed projects are subject to an intensive independent evaluation through OED’s Project Performance Assessment Reports. In addition, OED conducts field assessments for a quarter of the completed projects each year, and a small number of impact evaluations for projects completed five to ten years earlier. In a similar way, the OED's Country Assistance Evaluations concentrate on the development effectiveness of the Bank's entire programme of assistance to each country. They provide opportunities to assess lending and advisory services in the context of the country assistance strategy.

Thus, all evaluation is performed as a combination of self-evaluation and an independent evaluation by the OED. The “Annual Report on Operations Evaluation 2003” states, that in some areas of activities the framework for self-evaluation by management, and independent evaluation by the OED, is well established. Examples are project and country-specific evaluations. In other areas, there still re- main gaps, such as for example in sector strategies or knowledge initiatives.61 A challenge also is the evaluation of global grants. A report on the evaluation of global programmes from 2001 stated: “The treatment of outputs, outcomes, and impacts of global programs tends to be uneven, spotty, and based on anecdotal experience.”62 Thus, in September 2002, the World Bank launched the “BETTER MEASURING, MONITORING, AND MANAGING FOR DEVELOPMENT RESULTS” (or ‘MANAGING FOR RESULTS’) initiative. The Committee on Development Effectiveness presented an implementation plan in December 2002. The 2003 Annual Report on Evaluation of OED comes to the conclusion: “The evaluation framework for grants and global programs is not fully effective.” The report notes that a certain amount of Grant Completion Reports has not been provided timely. It also states: “Typi-

58 World Bank (2000). 59 OED (2004) 60 EIR (2003). 61 OED (2003) 62 OED (2001)

36 Environmental and Social Audit cally, the external evaluations report on implementation of activities, but not on outcomes and impacts.” Therefore, the World Bank intends to improve its evaluation of grant programmes in the following years.

In addition, self-evaluation of the OED based on a survey within its relevant audience – the evaluees – resulted in the suggestion that the OED should clarify and better present its methodology, including its inventory base, for sector and thematic studies. It should also better target and disseminate its sector, thematic and project evaluations to Bank staff and enhance consultations with borrowers.63

3.4 Procedures in the Framework of Export Credit Agencies (ECA) Export Credit Agencies (ECA) constitute an important sector adopting environmental and social guidelines and standards in funding. Government supported export credit finance and insurance is common in transactions or projects in emerging market economies where political or other risks are considered to be high, as these are usually difficult to insure by private means. Most industrial countries have at least one ECA that provides financing under these conditions.

3.4.1 Principles and Guidelines in ECA Most of the OECD Members (EU Member States, Norway, Switzerland, Hungary, Poland, Czech Republic, Australia, Canada, New Zealand, South Korea, Japan, and Mexico) agreed in November 2001 to implement the OECD GUIDELINES FOR CONSIDERATION OF ENVIRONMENTAL CONCERNS IN THE NATIONAL EXPORT CREDIT INSURANCE64. As a consequence, major ECA have firmly integrated environmental impact assessment of projects into their lending practices in the recent past.65 Never- theless, many projects are subject to external criticism by NCOs of the environmental and development area,66 which might be regarded as a sign of a gap between policy and implementation. In De- cember 2003, the OECD announced an agreement to strengthen their common approaches for evaluating the environmental impact of infrastructure projects supported by their governments’ export credit agencies with a view to ensuring that these meet established international standards. Compared to the 2001 Common Approaches, the latest agreement is enhanced in a number of respects:

· Projects should, in any case, comply with the environmental standards of the host country. If the relevant international standards against which the project has been benchmarked are more stringent, these standards will be applied. · The relevant international standards are those of the World Bank Group and, where applicable from a geographical viewpoint, those of Regional Development Banks.

63 OED (2003) 64 OECD (2001) 65 Ecologic (2003). 66 e.g. www.urgewald.de; ECA Watch (2003)

37 Environmental and Social Audit · With regard to the most sensitive projects, the environmental standards to be applied will be reported and monitored by the ECAs, and exceptional deviations below international standards will have to be justified. · For the most sensitive projects, ECA members will seek to make environmental information, particularly Environmental Impact Assessment Reports, publicly available thirty calendar days before final commitment. 67

3.4.2 Assessments and Evaluation at the Project Level The OECD also supervises practices and procedures of the ECAs in their Member States. In October 2003, the OECD provided a paper on the current status:68

The project cycle starts with a SCREENING PROCESS to categorise applications according to their potential negative impacts, for example on the environment, on indigenous communities or development aims. Most screening processes are based on questionnaires and check lists, which are supplied by the exporter or sponsor along with the application of coverage. Based on this information, projects are classified into categories A (highest negative impact potential), B and C (lowest negative impact potential) projects, according to OECD Common Approaches and World Bank Safeguard Principles. Depending on the project’s category as a result of the screening phase the ECAs devise mitigation or compensation measurements in co-operation with the applicant body to reduce the impacts.

Some ECAs have additionally set up THRESHOLD AND EXEMPTION CRITERIA to exclude certain projects from the scope of environmental guidelines. E.g. the German Euler-Hermes or the Japanese JBIC do not carry out environmental and social assessments for projects below a certain financial value. Others, e.g. the French ECA (COFACE), generally screen all projects but use certain thresholds to determine the screening’s extent: For every project a pre-questionnaire has to be filled in. If the project is located in or near an ecologically sensitive site, or if its value is above a certain value, a more extensive questionnaire has to be worked out.

Some ECAs have also adopted EXCLUSION CRITERIA to identify projects or sectors which should not be supported. Mostly exclusion criteria are based on Multilateral Environmental Agreements, such as the Montréal Protocol to the Vienna Convention on Substances that Deplete the Ozone Layer. The Australian (EFIC), the Canadian (EDC) and the Swiss ECA (ERG) are examples that strongly emphasise the compliance with Multilateral Agreements. The Australian ECA also refers to military and related equipment, prohibited materials and substances or certain countries.

Most ECAs have proceeded in adopting ENVIRONMENTAL AND SOCIAL GUIDELINES AND STANDARDS as benchmarks.69 As a general rule, ECAs first and foremost demand that supported projects comply

67 OECD (2003a) 68 OECD (2003b) 69 Ecologic (2003)

38 Environmental and Social Audit with the national environmental and social legislation of the importing country. Most of the ECAs further determine guidelines based on their own policy: The French COFACE refers to World Bank Group guidelines and Safeguard Policies, WHO, IUCN70 and Ramsar Convention guidelines71. The Australian EFIC requires exporting to adopt environmental management standards, whereas the Ca- nadian EDC requires compliance with the OECD antibribery code

An ENVIRONMENTAL IMPACT ASSESSMENT (EIA) is usually to be carried out by the sponsors or the exporter. Some ECAs require independent competent experts to carry out the EIA, such as the Aus- tria, Czech Republic, Hungary, Norway, Sweden and UK. Italy has chosen another approach and requires an independent review of the EIA.72 Some ECAs worked out guidance notes to specify the procedure and the aspects to be regarded. Usually, there are no environmental or social data or indicators required. Results of the environmental assessment are standards and covenants that are to be laid down in the loan contract.

Example The British Export Credits Guarantee Department The ECGD (British Export Credits Guarantee Department) is the oldest export credit agency in the world. In July 1999 the Secretary of State for Trade and Industry announced a review of ECGD’s mission and status.

While the ECDG had begun to consider environmental issues in early 1999, the review in 1999 con- cluded that it needed to consider sustainable development in a more rounded and rigorous manner. In response, a business principle unit was created within ECGD and in December 2000 a Statement of Business Principles was published, which included a commitment to further develop “existing guidelines and working procedures to assist detailed implementation of our policies at a practical level.“ Alongside the publication of the Statement, ECGD introduced a revised and expanded Impact Questionnaire and other associated screening procedures. Two ECGD staff members are responsible for the screening procedures and the monitoring of compliance.

Regular meetings with stakeholders include an annual seminar for all exporters and costumers, as well as meetings with NGO representatives. Consultation with civil societies is considered as an important principle.

MONITORING is essential to foster successful implementation of the environmental and social issues. In practice the monitoring procedures differ widely from ECA to ECA. Some ECAs, such as Canada or Greece, did not establish any monitoring process after the approval. Other ECAs demand a monitoring procedure for all projects within category A, some even for category B projects, whereas others

70 The World Conservation Unit 71 The Ramsar Convention guidelines aim on halting the worldwide loss of wetlands. 72 OECD (2003 a)

39 Environmental and Social Audit decide on a case-by-case basis. The monitoring process is usually conducted by means of regular reporting duties by the exporters, providing information on the progress of the project and on their compliance with environmental and social commitments, with the law, and/or with regulations of the respective host country. Some ECAs even mention the possibility of periodic site visits during the monitoring phase.73

Introducing environmental guidelines in the process of project appraisal and management requires additional time and staff. The OECD asked Member States to provide information on the additional costs, in order to formulate an estimation of these additional resources necessary. Most of the answers only cover qualitative information, however; there is hardly any quantified information available. Additional effort depends on the procedure and differs from ECA to ECA: Some ECAs employed one or two environmental experts to work out the procedure, for screening or review of environmental impact assessment reports or even for site visits. Within the Austrian OEKB the assessments are carried out at the expense of the applicants.

3.4.3 Starting Points for Enhancing Project Design and Evaluation Critiques of ECAs practice primarily focus on the following aspects:74 · Insufficient commitment to sustainable development: The OECD Common Approaches mainly deal with environmental aspects. At the same time, there is a lack of specified environmental standards to be applied. Social and economic aspects are missing completely.

· Limited scope: The threshold and exemption criteria for carrying out an environmental impact assessment are regarded as deficient. These criteria exclude many projects that potentially have, in fact, significant environmental impacts, even though they are no large-scale projects nor in the designated areas or sectors.

· Lack of consultation, transparency, and public access to information75: In principle, public involvement should be ensured in different forms and at different stages of the process, namely before or after approval (but before commitment) of a project’s proposal, during the implementation phase of a project, and during the development of guidelines and procedures for designing the process of evaluation. Establishing independent expert panels is also suggested to oversee the implementation of the projects, and the lack of public reporting requirements is criticized.

· Lack of common standards on operational policies: As a positive example the Equator Princi- ples of the World Bank are pointed out.

73 OECD (2003 a) 74 ECA Watch (2003), Ecologic (2003)

40 Environmental and Social Audit · Lack of monitoring and compliance mechanisms for ECA-imposed conditionalities and other national and international obligations: Only few ECA are considered to ensure project compliance with national and international obligations.

3.5 Conclusions Coordination, Participation and Capacity Building – Key Criteria for Best Practice The above analysis shows that even long-term experiences in assessments, audits and evaluations cannot safeguard programmes or projects from having negative environmental and social impacts. In fact, the management of policies as well as of complex programmes still is a challenge, caused by a variety of interests, involved partners and regional contexts.

However, judging from past experiences and the types of assessments describes above, the following seem appropriate to improve the quality and effectiveness of theses instruments:

· Adopting GENERAL PRINCIPLES, such as the World Bank’s ‘Safeguard Policies’, seems to support the significance of environmental and social aspects in programmes and projects. · These principles should be specified towards OBJECTIVES AND TARGETS, ideally to be defined early in the strategic-level planning process in order to serve as the basis for all further planning and implementation.

· The DIFFERENT STRATEGIC LEVELS MUST BE CLOSELY COORDINATED in the planning phase. In other words, screening and assessment procedures should be intertwined and coherent, with objectives defined at the policy and programme level. THRESHOLD and EXEMPTION CRITERIA as well as EXCLUSION CRITERIA should be set up.

· At the same time, the procedure should include INSTRUMENTS TO REFLECT, LEARN AND REWORD the direction and targets accordingly. This will mean, that indicators are used to foster learning processes. In addition, tools for self-assessment or evaluation should be available.

· INDICATORS should further guide the quantification of impacts and the progress of projects/ programmes and must therefore be formulated as such.

· Allowing wide but structured and moderated PARTICIPATION OF STAKEHOLDERS – both at the time of identifying targets and of auditing the outcomes and impacts – assures not only the process’ transparency but also its quality.

· Complementing the incorporation of stakeholders in general, EXPERTS should be included as a source of external expertise on the matters at hand.

75 In recent years there has been a trend to a more proactive approach in a number of ECA’s. Examples are Japan and the US. Although, many examples still are criticized because of a lack of participation.

41 Environmental and Social Audit

· AUDITORS AND CONSULTANTS executing the appraisals must be independent and well qualified for the job at hand.

· Good quality audits of both projects and programmes necessitate SUBSTANTIAL RESOURCES – finances and expertise. In planning and scheduling an assessment and/ or audit, this must be carefully considered and calculated for.

· TECHNICAL GUIDELINES AND OTHER INFORMATION MATERIAL, such as lists on national and on international environmental and social legislation specified for the areas of interventions, should be elaborated in order to support auditors and consultants.

· Procedures should be established to draw CONSEQUENCES IN CASE OF NON-ACHIEVEMENT of agreed social and environmental objectives.

· Finally, the results of auditing and evaluation procedures should be ACCESSIBLE TO THE PUBLIC: reports should be accessible in terms of their physical availability to interested parties and comprehensible to a non-expert citizen and should be structured and worded accordingly.

42 Environmental and Social Audit 4. Structural Funds 4.1 The Programme Cycle An Ambitious Legislative Framework and the Challenge of Its Implementation The legal basis for Structural Funds was revised in 1999. Supplementary to the main objectives of the Funds, protection and improvement of the environment, the elimination of inequalities and the promotion of the equalities between men and women were defined as so-called “horizontal themes”.76 Environmental concerns have to be addressed systematically in all programming documents, and environmental profiles of the regions must be prepared for all programmes. Environmental and social aspects and indicators are to be used in programme evaluation.

Furthermore, “partnership” was formulated as a basic principle. In determining the most representative partners at national, regional, local or other level, Member States are required to create a wide and effective association of all relevant bodies. The regulation refers to economic and social part- ners77, whereas environmental partners are not explicitly mentioned.

In spite of assessment and evaluation procedures, time and again NGO´s or the Auditors identify projects infringing environmental and social concerns. Even though environmental and social objectives are embedded in the legislative framework, implementation within the Member States obviously does not ensure that they have a strong position on local level as well. Furthermore, there seems to be a lack of incentives and possibilities of action in the case of failure. Although the Commission can stop projects, this is rarely rarely done in practice.

Step for Step – The Programme Cycle of Structural Funds in Detail The programme cycle described in the General Provisions covers the following steps (see Figure 7):

Planning Member States prepare development and conversion plans worked out through a partnership-based decision-making process and in several stages, until the measures are taken over by the public or private bodies entrusted with carrying them out. The plans are based on national and regional priorities and comprise a precise description of the current situation in the region, a description of the most appropriate strategy for achieving the stated objectives and indications as to the use and form of the contribution from the Funds.78 The programming documents must be submitted to the European Commission and build the basis for negotiation between the European Commission and Member States.

76 Council Regulation (EC) No 1260/1999, Article 1 77 Council Regulation (EC) No 1260/1999, Article 8 (1) 78 Council Regulation (EC) No 1260/1999, Article 16

43 Environmental and Social Audit

PROGRAMME LEVEL

Ex-ante Ex-post evaluation Mid-term evaluation evaluation

REPORTS Programme Reporting development Programme monitoring Selection of projects Project Project monitoring evaluation Screening Implementation Project of the projects assessment

PROJECT LEVEL

Figure 6: The programme and project cycle in the framework of Structural Funds

EX-ANTE EVALUATION79 is a part of the programming and is carried out in the responsibility of the managing authorities in the Member States. Explicitly, the ex-ante evaluation must consider · the environmental situation in the region, · the expected impacts caused by the planned strategies and assistance, · an analysis of the social (and economic) situation, · the situation in terms of inequality between men and women with regard to labour market opportunities and treatment at work as well as on the reconciliation of family and working life, · the relevance of the proposed implementing and monitoring arrangements.

Implementation in Member States: Monitoring and Evaluation Member States appoint a MANAGING AUTHORITY for each programme responsible for implementation, correct management and effectiveness of the programme. This includes collecting statistical and financial data, preparing and transmitting annual reports to the Commission, and organising the mid- term evaluation.

· MONITORING: In addition, monitoring committees are set up, chaired by a representative of the managing authority. The monitoring committees ensure the efficiency and quality of the implementation of the structural measures. They are involved in the decision on indicators to describe the economic, structural and environmental situation of the Member State according to article 37 of the General Provisions. The Monitoring Committees are also involved in the annual and final implementation reports.

79 Council Regulation (EC) No 1260/1999, Article 41

44 Environmental and Social Audit

· MID-TERM EVALUATION: In order to guarantee a high quality of the assistance and its effectiveness, the general provisions require a mid-term evaluation to examine, in the light of the ex-ante evaluation, the initial results of the assistance, their relevance and the extent to which the targets have been attained. It has to be carried out by the managing authorities in collaboration with the Commission. The analysis has to be undertaken by an external expert. 80

· REPORTS: In three-yearly intervals the Commission has to submit a report to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Re- gions. In addition, before November 1st of each year, the Commission should forward a report on the implementation of the Structural Funds during the preceding year. Annual reports are mandatory for all interventions lasting more than two years. They must at least cover chang- ing socio-economic trends, national, regional or sectoral policies and the progress in the implementation of priorities and measures for each of the Funds – with quantification wherever possible. Environmental and social aspects are not considered as a mandatory element of these reports.81

· EX-POST EVALUATION: Three years after completion of the programme, an ex-post evaluation has to be carried out based on the evaluation results already available. It is the responsibility of the Commission, in collaboration with the Member State and the managing authority. The analysis has to be undertaken by an external expert. Like the results of the evaluations before, the ex-post evaluation has to be made available to the public, on request.82

The potential for evaluation to enhance the effectiveness of Structural Funds was recognised in the first reform of the Funds in 1988. Since then, its role has grown and the responsibilities of the different partners have been set out more clearly.

Payments and financial controls After signing a financial contract with the Commission, the Member State also appoints a PAYMENT AUTHORITY for each programme to act as intermediary between the final beneficiaries and the Com- mission. The payment authority, in collaboration with the managing authority, monitors the expenditure of the final beneficiaries and ensures that Community rules are observed. Only if the payment authority approves and certifies the actual expenditure, the final beneficiaries will be reimbursed.

The increased decentralisation of programme management calls for improved checking arrangements, which are the responsibility of Member States. The Commission itself ensures the effectiveness of the arrangements set up by the managing and payment authorities. Detailed checks, such as on-the-spot checks and financial audits, must be made on five percent of expenditure in each programme. When

80 Council Regulation (EC) No 1260/1999, Article 42. 81 Council Regulation (EC) No 1260/1999, Article 45 82 Council Regulation (EC) No 1260/1999, Article 43

45 Environmental and Social Audit irregularities are found, Member States are responsible for making financial corrections by cancelling all or part of the financing of the operations concerned. 83 A manual drafted by the European Commis- sion provides further specifications.84

Environmental and Social Assessments and Audits Carried out by Financial Institutions While EVALUATION mainly aims at supporting learning processes, AUDITS in the framework of structural funds are set up mainly for controlling purposes.

Environmental and social aspects are also elements of the control mechanisms carried out by Euro- pean Financial Institutions: For some years, the EUROPEAN COURT OF AUDITORS has been monitoring not only the financial processing of exemplary projects but also whether these have been taking environmental or social aspects into account adequately. The reviews cover a systematic check of procedures and systems as well as random checks to get a representative picture on typical Structural Funds projects. The auditors test also whether and how environmental impact assessments have been carried out and who has been responsible. Communication between the European Court of Auditors and the Commission are formalised: The results are communicated to the European Commission, the Direc- torate-General for Regional Policy, and to the European Parliament. In return, the Commission has to report in a predetermined timeframe on the actions undertaken. According to the relevant national legislation, the audits are carried out either during implementation or after completion of projects. 85

As Structural Funds are set up to co-finance measures and projects, the NATIONAL COURTS OF AUDITORS are also involved as controlling institutions. Whether they regard environmental and social aspects, strongly depends on the policy of the national institutions.

In addition, the EUROPEAN INVESTMENT BANK (EIB) carries out environmental assessments for projects, which are co-financed by Structural Funds. In the perspective of the EIB, environmental concerns also include social aspects. Since environment is a top operational objective, it is a general requirement of the EIB that each project has to meet the national and European environmental objectives. For more than 30 years, projects have been checked systematically in an ex-ante assessment in terms of the following: · the environmental impact of the project after abatement, mitigation or compensation; · the characteristics, size and location (especially with respect to sensitive areas) of the project; · the presence/ absence of any legal compliance issues; · the quality of the Environmental Impact Assessment (EIA) where required – including the studies carried out and the nature and extent of public participation; · the environmental management capability of the promoter, including the promoter’s environmental awareness of and capacity and willingness to act upon environmental issues;

83 Commission Regulation (EC) No 438/2001 84 EC (2000) 85 Telephone interview with Hendrik Fehr, Court of Auditors, 18 March 2004

46 Environmental and Social Audit · the presence/ absence of any major environment-related project risks.86

As a result of the ex-ante assessment, some projects are monitored during implementation. An engi- neer, an economist and a financial expert check each project. All in all, there are 90 persons available for project assessment and monitoring. The assessments and monitoring are undertaken without stan- dardized working material. Rather, for each project the methods are adapted. Most of the projects are checked on-site. The results are summarized in a project completion report. Finally, the environmental aspects of some projects may be evaluated ex-post by EIB's independent OPERATIONS EVALUATION DEPARTMENT. Nevertheless, according to the EIB, the promoter is responsible for legal compliance, whereas regulatory and enforcement tasks lie with the competent authorities. The EIB can verify whether all the procedural requirements were met. The EIB is seeking to strengthen the quality check for activities carried out by third parties.87 There is an intense exchange with the European Commis- sion, especially with DG Environment. A MEMORANDUM OF UNDERSTANDING was set up to provide rules for co-operation between both institutions, including experts groups und consultation mechanisms. In addition, twice a year NGOs are invited to discuss specific issues.88

4.2 Indicators for Measuring Environmental and Social Aspects Indicators are considered an important instrument to ensure environmental and social aspects to be regarded in the Structural Funds´ programme cycles. Thus, formulating appropriate indicators is an issue of intensive debate within the European Commission and Member States. The sets of indicators developed in recent years are numerous. Without claim to be exhaustive, some approaches are compiled in Annex 6.2. Despite the wealth of indicators, an interview partner from DG Environment stated that there is no appropriate overall set of indicators for assessing Structural Funds.

Context indicators An important and commonly adopted approach to measure effects of Structural Funds is the use of statistical data describing the regional situation. For many years efforts have been made to develop a more consistent database within the Member States. Thus, statistical data or so-called CONTEXT INDICATORS build the baseline for developing plans and are often used to evaluate the effect of Structural Funds89. In some cases, e.g. anti-pesticide programmes in rural areas, a change in the environmental situation might be a direct result from Structural Funds. Here, statistical data of the environmental situation have a high indicative function. However, the measurement of effects is still a challenge in those cases where changes in the current situation cannot be directly connected to Struc- tural Funds. Generally speaking, clear cause-and-effect relationships between actions, results achieved and changes cannot easily be established.

86 European Parliament, Directorate-General for Research (2003) 87 European Parliament, Directorate-General for Research (2003) 88 Telephone interview with Shona Atkinson, 18 March 2004 89 e.g. water quality in the region, measured by kilometres of rivers with a high quality, or quota of women of all employees.

47 Environmental and Social Audit To give an example: Qualification measures for energy saving will sooner or later have a positive impact on regional energy consumption and carbondioxid emission. However, changes in energy consumption will not relate to Structural Funds’ measures only, but also on various parallel or anti- cyclical developments such as a trend in prices, technical progress and life style aspects. Therefore, context indicators can be adapted to measure effects only in a limited scope of cases.

Output, Result and Impact Indicators To measure the effects of Structural Funds on environmental and social aspects, output, result and impact indicators are the more appropriate approach. DG Regional Policy distinguishes between the following types of indicators: · output indicator, relating to activities, measured in monetary or physical units (e.g. length of road constructed); · result indicators, relating to the direct and intermediate effects and changes (e.g. reduction of journey time due to road construction); and · impact indicators, referring to the consequences of a programme and to the subsequent changes in the regional state. 90

Whereas in many infrastructure measures, the database is available to build such indicators, in many other cases a high amount of methodological know-how as well as personnel and financial resources is required to formulate and gather the information for output, result or impact indicators.

If these indicators shall serve as tools for fostering a high environmental and social performance of the projects, they must be highly specific to the projects characteristics. Furthermore, taking into account the Structural Funds´ regional orientation, tools for assessing environmental and social impacts must allow an individual approach according to regional objectives and pre-conditions.91 Thus, indicators used on the regional or even project level would be far too specific to use as a comprehensive compilation and the communication of impacts and effects in all the various areas of Structural Funds interventions. Moreover, developing a consistent set of indicators based on project specific indicators is difficult because of the variety of projects financed by Structural Funds interventions. Compiling these indicators is a logistical challenge (see figure 8): Currently, about 150,000 to 200,000 projects are financed by Structural Funds. Computer-based solutions are expensive and raise the risk of conse- quential expenditures and efforts. In contrast to financial data, environmental and social indicators on result, impacts and effects cannot be aggregated easily on the programme level. Moreover, aggrega- tion in such complex systems would lead to results which pretend to be accurate and objective without regarding uncertainties and differences between the methods applied for generating data.

90 EC, DG REGIO (without year, a) 91 Indicators shall “relate to the specific character of the assistance concerned, its objectives and the socio- economic, structural and environmental situation of the Member State concerned and its regions, as appropriate” (Council Regulation (EC) No 1260/1999, Article 36 (1))

48 Environmental and Social Audit

European Union

Member Member Member States States States

OP OP OP OP OP OP OP OP OP

Measures

Projects

Figure 7: Information levels in the framework of Structural Funds Process Indicators Thus the current debate at the European Commission and among interested parties92 increasingly focus on indicators describing the quality of the processes established for integrating environmental and social demands. With theses, it would be possible to provide a better overview for the European Par- liament, the Council and interested public, which role environmental and social aspects actually play within the programme cycle in Member States.

4.3 Integrating Environmental and Social Aspects in Structural Funds As shown in chapter 4.1, the legislative framework of the Structural Funds has strengthened environmental and social concerns in the legislative framework. Moreover, at the European Commission, environmental and social aspects have become serious concerns, amongst others fostered by the Car- diff Process, Lisbon and Gothenburg (see chapter 2). There is a constructive exchange between DG Regional Policy, DG Environment and DG Employment and Social Affairs93, 94. In addition, throughout the Commission and Member States many initiatives have been started to develop methodologies for mainstreaming the horizontal themes into the Structural Fund programme cycle95.

Nevertheless, environmental and social concerns are of different importance in the Member States, and the willingness to regard environmental indicators as a compulsory part of monitoring and evaluation procedures differs widely. A central pre-condition to ensure that horizontal themes are taken into account in planning and implementation is an adequate institutional framework, involving

92 Telephone interview with Stephanie Lang, WWF Brussels, 9 March 2004 93 IEEP (2003) 94 Nevertheless, DG Environment is only involved in an advisory function, not in decision-making. 95 e.g. EC, DG EMPL (1999a), EURES (1999), EPRC (2001), IEEP (2002), IRPUD and nova (2003), IZT (2001), WWF (2003)

49 Environmental and Social Audit the thematic authorities in the process. Such an institutional framework typically consists of working groups96.

GeM – Coordination Unit for Gender Mainstreaming in the ESF (Austria) The GeM (Gender Mainstreaming) was established in Austria in late 2000 by the Federal Ministry for Economy and Labour (BMWA) and is co-financed under the Objective 3 programme97. It has a three- year operational period from 2001-2003 and its aim is to support gender mainstreaming primarily in the Objective 3 programme in Austria. Its target group are end users of Objective 3 financing, including the Labour Market Service (AMS), the Federal Ministry for Education and Science and the Territorial Employment Pacts, which make up a separate priority within the Objective 3 programme. GeM services are aimed at those persons directly involved in the design and operation of ESF measures.98

Additionally, throughout many working papers PARTICIPATION of interested parties is emphasized as the central concept for mainstreaming Structural Funds. Amongst others, Finland, Lithuania, Spain and Portugal established environmental advisory boards or networks, some of which involve a large number of participants99. An important aspect for ensuring that environmental demands are taken into account is the close linkage between advisory boards and decision-makers. A good example is the UK where the Board is directly responsible to the Prime Minister.100

Italy – The Task Force of Environmental Authorities During the evaluation of the programme period up to 1993-1999 it was shown that only 0.7 percent per region were dedicated to environmental integration in Structural Funds. This leads to the conclusion that dedicated central and regional task forces should be created. An innovative capacity building project was created: An expert group with about 160 members was established, two thirds of them working in environmental authorities to support programming and in environmental agencies to provide support for data collection and monitoring. Another third was employed at the national Ministry of Environment and Territory. Based on this structure, guidelines on indicators, on evaluation and on technical directives for the implementation of the Operational Programmes101 were developed.102 Two years after establishing the system, all sides have learned: The acceptance of the experts has increased and they are seen more and more as a support, rather than as creator of additional work and expenditure.

96 EPRC (2001) 97 Council Regulation (EC) 1260/1999 lists three kinds of objectives of the Structural Funds: Objective 3 aims at the adaption and modernisation of policies and systems of education, training and employment. 98 EPRC (2001). 99 Ministerio de Medio Ambiente (2003) 100 Telephone interview with Günter Raad, DG Environment, 10 February 2004. 101 Operational Programme means the document approved by the Commission, which includes priorities and measures to be financed by the Structural Funds in a given region. 102 e.g.: Autorità Ambientali (2001).

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Mainstreaming horizontal themes also requires GUIDANCE AND TRAINING at each level accompanying the programme cycle – from programme manager to priority managers and, ultimately, to project managers and evaluators. Thus, thematic experts must be available. This requirement affords a budget available for training measures for experts. For all steps of the programme cycle requirements and tools have to be specified – from programme design, project generation, selection and monitoring to evaluation.

The University of Strathclyde provides an exhaustive overview of activities in Member States: The study covers a review of the content of selected 2000-2006 programmes. One result is that the programming documents show more systematic and developed responses for environmental demands than e.g. for gender aspects, as environmental themes are longer established. Nevertheless, the authors come to the conclusion that there is a significant but uneven progress of integrating these themes more systematically into programming documents. Applicants are more often being asked to consider the implications of interventions for the environment and gender equality. Nevertheless, the process of translating the commitments in the programming documents into the content of projects is complex, and standard solutions are not available due to the variety of contexts in which structural programmes are designed and delivered.

Thus, the EVALUATION PROCESS is emphasised as a central step of the programme cycle to ensure the integration of horizontal themes – assuming, that it is used as a tool to encourage reflection and debates. The importance of evaluation has risen considerably since it has been established as a compulsory part of the programme cycle.

Strengthening evaluation is an important step towards the European policy understanding which points out the significance of participative approaches. Involving interested parties is regarded as the appropriate course to negotiate between different and partly competitive objectives. Thus, the involvement of environmental and social partners in the evaluation process –ex-ante as well as midterm and ex-post - is an important step of mainstreaming programmes.

In fact, anchoring horizontal themes and partnership as important principles did not actually facilitate evaluation but even made it more complicate. In recent years, many different approaches for evaluating the mainstreaming environmental and social concerns into the programmes have been elaborated in the Member States, and many methods to measure success were developed (see also annex 6.2). Hence the methodologies of the environmental ex-ante and midterm evaluations of the Programmes 2000-2006 vary considerably103 (see examples above). As a result, a consistent approach how to measure the overall impacts on the environment and on social concerns is not yet available.

103 This is not only a characteristic of evaluations in the framework of Structural Funds. The FORSCHUNGSSCHWERPUNKT FÜR NACHHALTIGKEIT UND UMWELTMANAGEMENT DER TU WIEN (2002) comes to the conclusion, that the quality of public available evaluation reports in the field of sustainability issues is varying, the applied methods manifold, and a common set of methods or minimum standards no yet are established.

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Example: The Single Programming Document “Objective 2 Salzburg 2000-2006”104 The single programming document “Objective 2 Salzburg 2000-2006” includes the results of the ex- ante evaluation. To describe the overall environmental impact the QUOTA OF FUNDS WHICH IS EXPLICITLY PROVIDED TO IMPROVE THE LOCAL ENVIRONMENT and the PROJECTED COMPENSATION MEASURES are used as indicators. To classify the environmental character of projects three categories of environmental impacts (neutral/ mainly positive/ mainly negative) are used. The classification is based on qualitative information.

The single programming document also identifies indicators to specify and measure the objectives defined in the programme. One of the targets specified is the PROTECTION AND IMPROVEMENT OF THE ENVIRONMENTAL SITUATION. To quantify the impacts on this target it is proposed to use data on the air and water quality as indicators, which are irregularly collected by the national environmental agency. The authors also stress the limitations of that approach due to the small contribution of the Structural Funds in relation to the regional added-value.

Example: Yorkshire and Humber 2000-2006 Objective 2 Programme105 In contrast to the Austrian example, in the mid-term evaluation of Yorkshire and Humber contextual indicators are excluded because of their limited significance. Instead, environmental sustainability is described by output and process measures. From the mid-term evaluators’ point of view most of the Integrated Development Plans recognise environmental aspects, while major capital projects had been subjected to appraisal against priorities and horizontal issues, such as environmental protection and gender mainstreaming. Applicants are informed that they have to address some environmental outputs and targets through self-appraisal. However, not all projects must meet all these issues. The design of the project merely has to demonstrate that there is no negative impact on the environment. All projects that passes the initial assessment of eligibility are assessed against sustainability criteria. The evaluators come to the conclusion that environmental aspects appear to be more intensively assessed than other horizontal themes such as gender mainstreaming.

However, the mid-term evaluation emphasises the lack of provision for monitoring environmental performance of the Integrated Development Plans. There is no further central recording of progress after the project starts. The evaluators state that progress performance in the mid-term evaluation is built upon an insufficient data base. It is mainly compared with four programme-specific forecast environmental output indicators106, completed by interviews with relevant persons involved in the programming and implementing process. Thus, the evaluators recommend a monitoring of projects and programmes including the effects on the environment.

104 Amt der Salzburger Landesregierung, Abteilung 15: Wirtschaft, Tourismus, Energie (2003). 105 Leeds Metropolitan University (2003). 106 1. Derelict/ Conatmined land developed, 2. Environmental initiatives assisted, 3. Brownfield land developed, 4. SME receiving financial support to introduce environmental technologies.

52 Environmental and Social Audit Nevertheless, debates on the evaluation of Structural Funds have a long tradition. Since 1995, five conferences took place to foster a culture of evaluation in relation to Structural Funds and to enhance the quality of evaluations. Numerous studies on methodology have been carried out, and some manuals have been launched by the European Commission to support Member States. In spite of this long debate on methodology, the evaluation of Structural Funds programmes and projects still is challenged. In many cases, it appears that the managing authorities expect the external evaluators to provide solutions how to tackle the horizontal themes in the mid-term evaluation instead of providing guidance to the evaluators.107 Developing methodologies for evaluation still remains a prior task in the framework of Structural Funds policies.

Italy: Organizing Evaluation For the organisation of the evaluation activities required by the Community regulation, Italy has developed a system in the framework of the European Social Funds (ESF) that reflects the decentralised character of the institutions with as many evaluators as there are Operational Programmes (OP). It also guarantees homogenous information on the various local situations through the scientific and methodological coordination of a national Evaluation Unit. The tasks of the National Evaluation Unit are ● proposing the indicators, strategies and standards, ● carrying out specific ongoing evaluations on topics and policies of strategic importance, ● analysing the impact of the European Social Funds (ESF), also with regard to national or regional labour and resource policies, and ● carrying out the mid-term and final evaluation.

The evaluation activity is directed by the Technical Evaluation Group, set up within the Monitoring Group, with the aim of steering, coordinating, and continuously checking and cross-checking the evaluation carried out by the various stakeholders. The technical Evaluation Group is the forum for common reflection and constitutes the partnership body of the evaluation. Presided by the Ministry of Labour and Social Policy, it is composed of representatives of the European Commission, Ministry of the Economy, Operational Programme Managing Authorities, Equal Opportunities Department in the Prime Minister’s office, social partners, the National Evaluation Unit and Operational Programme evaluators.108

At the current situation the evaluation reports are worked out for the administration in Brussels, which has the challenging task to assess and compile numerous documents with thousands of pages. In the local public and in the area of politics the evaluation reports are hardly noticed – not only because there might be a general lack of interest but also because the evaluation reports are difficult and tedi- ous to read. Above all, the results can hardly be compiled on an overall level, which in turn leads to a communication challenge towards politicians and interested parties in the European public.

107 EPRC (2001) 108 ISFOL (2003).

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Nevertheless, systematic evaluation processes and the public use of their results build an important element to tackle complexity of Structural Funds and the requirements of a participatory policy approach within the European Union. Moreover, there are already some best practice examples, such as the evaluation of European Social Fund (ESF) in Italy (see above), where the National Evaluation Unit provides support and coordinates the evaluation process.

4.4 The Baseline for Recommendations When providing recommendations, several framework conditions at European level should be taken into consideration:

● Whereas the European Union in its beginning relied on standardisation, alignment, and cen- tralised steering, in the meantime more and more flexible policy approaches have been established taking into account different traditions, conditions, and cultures. According to this understanding, the principles of decentralisation and partnership are awarded central importance in the relationship between Member States and the European Union. On the other hand, the multi-level governance has become very complex and often lacks the transparency required for democratic legitimacy.109 Moreover, in the context of Structural Funds, many end-users do not anticipate or not even know the objectives and priorities of the Structural Funds Pro- gramming Framework110. Defining objectives often is a pro forma step. Thus, the recommendations have to find the balance between two sets of governance principles, decentralisation and participation, on the one hand, and better coordination and coherence, on the other.

● The European administration must address and deal with the situation that they are regarded sceptically by Member States. Thus, they often have to justify requirements which implicate additional financial and personnel resources on the national level. Evaluations and audits have the smell of control and bureaucracy. All requirements to establish additional administrative processes will foster a critical attitude towards European interventions. Thus, not only active information is required to accompany possible measurements but also the involvement of Member States in the further design of measures to enhance consistency of evaluations and audits and to foster environmental and social mainstreaming.

● The European Commission has only limited capacities to compile all information for the 150,000 to 200,000 projects currently financed in the framework of Structural Funds. In an enlarged Europe with ten additional New Member States as important future recipients of Structural Funds, this capacity is an even more restrictive element. Thus, simplification of the processes should be a guiding principle while developing recommendations.

109 Schleicher-Tapesser (2002) 110 EURES (2001)

54 Environmental and Social Audit 5. Recommendations 5.1 Selecting the Right Indicators – Regarding their Functions in Programme and Project Cycles The study should identify which indicators and methods could be useful for measuring social and environmental progress, especially for evaluating the added-value and other effects of Community funding. As shown in the previous chapter, a general, comprehensive and overall set of indicators is hardly feasible for all projects. In addition, the use of indicators should be understood as intrinsic part of a process. Thus, it is recommended to take a closer look at the functions indicators have at the diverse stages in the programme or project cycle, where they are applied. The structure proposed in the following is not meant to replace other methods to structure indicators, such as the “driving force- pressure-state-response” approach of the UN-CSD,111 OECD112 or the “input-output-result-impact” approach of the European Commission, DG Regional Policy.113 The following suggestion rather provides a complementary approach.

Context Indicators Specific Indicators Process Indicators

Focus

Regional situation Performance Adequacy of of project/ measures Processes Target Supporting learning Gaining an overview Anchoring EU objectives within projects of mainstreaming status Stages in Programme Cycle Planning programmes Assessing, monitoring Evaluating and auditing evaluating and auditing programmes Screening projects measures/projects

Figure 8: Types of indicators and their purposes within programme and project cycle

Depending on stage and purpose within the programming cycles, three types of indicators are to be distinguished (see figure 9), each of which will be outlined in the following sections: · Context Indicators – Indicators for planning programmes and screening measures or projects · Specific Indicators – Indicators for monitoring measures and projects · Process Indicators – Indicators for evaluating and auditing programmes

111 United Nations Divisions for Sustainable Development: www.un.org/esa/sustdev/natlinfo/indicators/isd.htm 112 OECD (1993), OECD (2000) 113 EC, DG REGIO (without year, a)

55 Environmental and Social Audit 5.1.1 Context Indicators – for Planning Programmes and Screening of Measures or Projects Context Indicators are used to describe the regional situation. Many context indicators are available as statistical data. In the framework of Structural Funds they are used to describe the environmental and social situation during the ex-ante evaluation.

The definition and formulation of context indicators should be oriented at the debate on environmental, social and economic objectives within the European Union (see also chapter 2 and annex 6.1). In addition, specific regional information may be important to describe and assess the regional situation, of course. In order to find out the crucial regional aspects, environmental and social experts and stakeholders should be involved in the process of developing indicators.

Furthermore, it is proposed, that measures and projects should be screened and prioritised by using EU objectives (see annex 6.1) to ensure that the EU objectives are anchored also on the local level of funding. Otherwise there might be a tendency to focus primarily – or even exclusively – on regional interests. During a screening phase, a specific profile should be worked out for all measures or projects describing quantitatively or qualitatively their contributions to the economic, environmental and social objectives of the European Union as well as the specific programme. Trade-offs should be discussed at least between the thematic authorities. Where appropriate, mitigation measures should be defined. The results of the screening phase have to be documented to enhance transparency of the decision-making process.

5.1.2 Specific Indicators – For Measures or Projects In addition, indicators are required to enhance the environmental and social performance of measures and projects according to their specific targets. Indicator sets such as developed by DG REGIONAL POLICY114 or by DG EMPLOYMENT AND SOCIAL AFFAIRS115 provide useful support. For this, during the planning phase of measures and projects, objectives for monitoring and evaluation procedures should be defined. To give an incentive for setting ambitious objectives, competitions could be set up to select projects or to dangle higher grants in case of positive distinctions. An example of indicators for ESF financed measures is provided in Annex 6.3.

On the level of measures and projects, an important task of indicators is to foster learning processes for all partners involved in planning and implementing projects. Indicators are tools to support the debate on appropriate objectives; in cases projects do not meet their targets indicators serve as cata- lysts for a structured debate on reasons for failing. At operational level indicators are more and more considered instruments for structuring debates and learning processes along an ongoing monitoring.

Especially in the framework of a benchmarking, not the absolute value but related questions are subjects to debates. Typical questions are these: Which method and scope are used for data collection?

114 EC, DG REGIO (without year, b). 115 EC, DG EMPL (1999b)

56 Environmental and Social Audit What are the reasons for differences between indicators derived from the diverse projects? What are the specific situations of measures and projects causing differences? What are starting points for improvement, and which are the experiences of the different partners in the benchmark process?

5.1.3 Process Indicators – For Monitoring, Evaluating and Auditing Programmes As shown in the previous chapter, a harmonized indicator set to assess the contributions of Structural Funds towards the Union’s environmental and social objectives is extremely difficult to formulate. An approach more in line with the demand to simplify processes within the EU, instead, is the use of qualitative indicators focusing on the question, whether the procedures set up by Member States to integrate environmental and social demands are appropriate. Starting points are (see also chapter 5.3): · procedures to ensure that economic, environmental and social objectives of the Union are anchored in programmes, for example by means of context indicators derived from the European objectives to identify gaps in social and environmental development, · procedures to ensure that projects are selected only after screening their contributions to economic, environmental and social objectives of the Union, and that they are prioritised according to regional and European objectives, · information and communication of social and environmental priorities and objectives of the European Union and the specific programme, · procedures to ensure, that for each measure and project specific environmental and social targets are set up as a baseline for evaluation and auditing, · inter-organisational working groups (advisory boards, networks) to ensure that environmental and social demands are integrated at different stages of the programme and project cycles and guaranteeing their influence in programme and project cycle, · capacity building to advise and support operators in environmental and social issues, · guidance and training for regional and local administration and financial control authorities, monitoring committees, project managers or operators and auditors/ evaluators, · procedures for enhancing the consistency of monitoring and evaluation procedures, · disciplinary measures for cases where evaluations or audits show that a project or a programme does (will) not meet the targets, · budgets for capacity building, such as development of guidance, information and communication, and training measures in the area of social environmental and social demands.

The questionnaire in Annex 6.4 shall serve as a first draft of qualitative process indicators. However, according to a European tendency to replace a “command-and-control” approach by more flexible policies taking into account regional idiosyncracies, the European Union should provide guidance on process design as a general framework, whereas further specification along regional and national demands should be left to Member States. This approach takes into account that many Member States or Regions already have established procedures and capacities to integrate environmental and social demands. Developing the framework should be based on extensive consultation and on a participatory process with European Institutions and Member States.

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Recommendations Anchoring the Union’s Environmental And Social Objectives on the Regional and Local Level · A DIALOGUE PROCESS should be established (see chapter 5.3) to agree on a set of objectives, derived from the EU strategies on environmental and social objectives, and appropriate context indicators which should then be taken into consideration in the developing plans of Member States. That process should include EUROSTAT to ensure that the indicators are available.

· INFORMATION AND TRAINING measures should be provided for all administrative levels and involved parties in Member States to communicate the Union’s environmental and social objectives, including the specific objectives of the Funds. A profile of economic, social and environmental objectives to be used as a baseline for screening should be provided with the application forms.

· A SCREENING PHASE should be established for all measures or projects to assess the contributions against the background of the Union’s and the programmes´ economic, environmental and social objectives. Trade-offs and mitigation measures should be discussed – at least among the relevant thematic authorities – and the results should be documented to enhance transparency of the decision-making process. Project proposals should be prioritised according to their contributions towards regional and European environmental and social objectives.

Supporting Learning Processes on Structural Funds´ Measures and Projects · In order to provide incentives for setting ambitious objectives, COMPETITIONS OR AWARDS could be set up to select and award especially noteworthy projects.

· The numerous approaches of INDICATORS for specific areas of interventions should be collected and made publicly available on a WEBSITE of a European Institution as well as on the websites of the managing and evaluating authorities in Member States.

· As a pilot project, BENCHMARKING PANELS involving project leaders in the same areas of measures should be set up to support the exchange of experiences and indicator-aided learning.

Asking the right questions – Set up criteria and indicators to measure environmental and social mainstreaming of Structural Funds programmes · A SET OF CRITERIA should be developed in a participatory process (see chapter 5.3) to gain an overview of the procedures set up in Member States to ensure that environmental and social concerns are awarded high priority in the Structural Funds programmes.

· INTEGRATING IN REPORTING: These criteria should be a mandatory part of the annual monitoring reports and the evaluation reports.

59 Environmental and Social Audit 5.2 Auditing Complex Systems – Defining appropriate Auditing Procedures The audit procedure described below is formulated for institutions involved in financial audits, such as the auditing institutions at the European level or the internal audit services in Member States and Member States’ supreme audit institutions such as the national Courts of Auditors. Since audits in Member States according to national legislation are carried out at different stages of implementation or completion, the procedures described below have to be further specified. They shall serve only as a first introduction of relevant procedures and questions. For a more practical and concrete approach, a pilot project involving an auditing institution is recommended.

5.2.1 Exemplary Design of an Audit Audit Plan At the beginning of the planning period, an AUDIT PLAN should be worked out to determine, which projects should be audited during the annual work programme. A guiding principle should be to ensure that a representative number of all projects in terms of its nature would be considered.

The audit plan should also define who is to be involved in the audit. A characteristic of environmental and social audits in the framework of Structural Funds is their multi-level design, regarding administrations and partners at national, regional and local level. For each of these levels audit procedures have to be specified. It strongly depends on the organisation within each Member State, who will be involved in detail. However, at least the following partners have to be regarded: · EU–Institutions involved in programming and evaluation (if the auditing institution is a Euro- pean one), · national and regional administration, · local administration and control authorities, which manage, monitor and control individual actions, · social and environmental partners in the monitoring committees, and · project managers or operators.

In addition, the audit plan should describe the procedures and supporting materials (such as checklists, questionnaires, lists of the applicable environmental and social legislative framework) to be adopted during the environmental and social audit. The audit should cover systematic reviews of procedures at programme level (management system audit of programmes) and include spot-checks of projects due to the environmental and social objectives defined by the European Union as well as of the programming documents (random checks).

Procedures A central pillar of the audit should be information regarding the processes of programming and implementation in Member States. The process design influences considerably whether environmental and social aspects are taken into account.

60 Environmental and Social Audit At programme level the audit may include: · reviews of records, written procedures and other relevant documentation, such as programming documents, annual reports with the results of the monitoring process and evaluation reports and · interviews and workshops with environmental and social partners in the Monitoring Com- mittees or in advisory boards as well as with the programme evaluators.

Therefore, a set of questions aiming on the process design at the PROGRAMME LEVEL should be part of the audit process. A questionnaire that shall provide first ideas can be found in Annex 6.4.

At the project level, the audit may include · reviews of planning documents, monitoring reports and evaluation reports, · checklists to be filled in by the operators during appraisal, · on-site visits and interviews with operators, · interviews or workshops with - social and environmental partners, - national managing authorities, - regional or local managing, environmental and social authorities.

Thus, a set of questions aiming on the process design AT PROJECT LEVEL should be part of the audit process. A questionnaire with first ideas can be found in Annex 6.5.

Reporting A written audit report of appropriate form and content (see section 3.2.3) should be prepared at the end of each audit and audit cycle by the auditors to ensure full, formal submission of the findings. The audit report should include · a description of the scope of the audit, · information about the state of compliance with the Union’s and the programme’s objectives and the environmental performance of the projects, · information on the effectiveness and reliability of the arrangements for managing and monitoring environmental and social impacts of the projects, and · where appropriate, details on corrective action.

The findings and conclusions of the audit should be formally communicated to and discussed with the operator. After preparing the final version, the report should be presented to the European Commis- sion (if the auditing institution is a European one) and the managing authority of the Member State.

Technical Papers To enhance quality and consistency of the audits, technical papers should be prepared, such as · checklists for project screening and assessment to be provided to applicants,

61 Environmental and Social Audit · checklists for management system audits (first drafts see Annex 6.4 and 6.5), · specific checklists for typical areas of interventions (see below), especially for infrastructure projects with potentially considerable environmental and social impacts116, · a compilation of the principal EU environmental and social legislative instruments as they relate to key development sectors or priorities that are often co-financed through the Struc- tural Funds (see below). The environmental assessment handbook prepared on behalf of DG Environment may serve as a helpful tool.117

Areas of Structural Funds Interventions · Agriculture · Forestry · Promoting the adaptation and the development of rural areas · Fisheries · Support for large firms · Support for SMEs and craft businesses · Tourism · Research, technological development and innovation (RTDI) · Labour market policy · Social inclusion · Developing educational and vocational training not linked to a specific sector · Workforce flexibility, entrepreneurial activity, innovation, information and communication technologies · Positive labour market actions for women · Transport infrastructure · Telecommunications infrastructure and information society · Energy infrastructures (production, delivery) · Environmental infrastructure (including water) · Social and public health infrastructure118

Capacities A department in the auditing institution should be established to coordinate the environmental and social audit activities. This department would then be in charge of preparing technical papers, as well as training and supporting auditors.

116 For infrastructure projects, the OECD Common Approaches for evaluating the environmental impact of infrastructure projects is recommended as a guideline 117 EC, DG ENV (1998) 118 Commission Regulation (EC) No 438/2001

62 Environmental and Social Audit In addition, depending on number and extent of the projects to be checked, sufficient capacities should be made available to carry out the environmental and social audits. Personnel must exhibit appropriate knowledge of the sectors audited, including knowledge and experience in the relevant environmental, management, technical and regulatory issues. This staff should also be involved in the screening and assessment of projects to ensure the quality of assessments in the planning phase of projects. The environmental and social experts should form multidisciplinary appraisal and auditing teams comprising of technical, financial and legal experts.

In order to establish a high quality assurance an additional independent evaluation unit should super- vise the work of the auditing departments119, similar to the procedure in the World Bank or the Euro- pean Investment Bank, including random checks as well as thematic evaluations, focussing, for example, on social inclusion or specific environmental subjects such as urban air quality or water management.

Qualification and Exchange of Experience The auditors should be trained by the environmental departments regularly, for example twice a year, regarding revised technical papers and revised environmental and social legislation. Moreover, it is recommended that training programmes include moderated exchanges of experience between the auditors.

5.2.2 Integration in Existing Management Systems Coordination between Audit and Evaluation To reduce the administrative efforts to be undertaken by Member State authorities and operators, it is recommended to enhance consistency of the approaches and methods for assessing, monitoring, evaluating and auditing programmes and projects between these Institutions. At least, a consistent framework of principles and objectives should be developed as a baseline for audits as well as for evaluations.

Therefore it is recommended to provide standardised checklists on environmental and social issues to be filled in at the appraisal stage of a project as a framework for project screening and assessment. These checklists should be aligned with the working papers of the European Commission, the Evaluation Units in the Member States and with technical papers used by European Institutions, such as the European Court of Auditors or the European Investment Bank.

Enhancing Motivation for Performance Audits in National Control Institutions In addition, auditing the environmental and social performance of measures and projects in the Mem- ber States would increase the potential of this instrument considerably. Thus, it should be further strengthened. Member States should call upon the national Courts of Auditors and their payment authority to include environmental and social aspects in their lending activities and auditing schemes.

119 Terminology (audit and evaluation): see chapter 3.1

63 Environmental and Social Audit Coordination, information and providing material are recommended as first measures to enhance awareness. Moreover, establishing procedures for strengthening environmental and social performance audits should be an issue of the dialogue proposed below (see section 5.3).

Recommendations Integration into Existing Management Systems · COORDINATION BETWEEN AUDIT AND EVALUATION: Consistency of the approaches and methods for assessing, monitoring, evaluating and auditing programmes and projects between the evaluating and auditing institutions should be enhanced in order to reduce the efforts to be undertaken by Member State authorities and operators. · ENHANCING MOTIVATION FOR PERFORMANCE AUDITS IN NATIONAL CONTROLLING INSTITUTIONS: Member States should be called upon requiring their payment authority and their controlling institutions to include environmental and social aspects in their lending activities and auditing schemes.

5.3 Mainstreaming Structural Funds - Integrating Environmental and Social Con- cerns in Programmes and Projects Since horizontal themes have been embedded explicitly in the Structural Funds legislative framework, many actors at the European level and in Member States have been developing methods to put these requirements into practice. In the current period substantial experience has been gathered how to integrate horizontal themes into Structural Funds and what limits and hindrances may be.

In the context of the forthcoming revision of Structural Funds legislative framework, these experiences should be evaluated and serve as an input for the next programme period. European Union should provide guidance on process design as a general framework, whereas further specification due to the regional and national demands is up to the Member States. For this propose, a forum, consti- tuted of representatives from all Member States and the European Union, should be set up, accompanied by a professional moderator. This process should primarily aim at identifying appropriate paths for mainstreaming the programmes taking into account possible limiting factors within Member States and regions, such as financial resources and capacities.

According to the findings of the present study, the following topics should be discussed in such a consultation forum: · BUILDING A BASELINE – AGREEMENT ON PRINCIPLES AND OBJECTIVES: Objectives are required to build a clearly defined baseline for programme development, for monitoring, evaluating and auditing programmes and for selecting and prioritising projects.

· LOBBYISTS FOR SOCIAL AND ENVIRONEMTAL CONCERNS – INVOLVING ENVIRONMENTAL AND SOCIAL PARTNERS: Member States should develop methods to involve interested parties that serve as guarantors for taking environmental and social concerns into account. Guidance

64 Environmental and Social Audit should be developed for selecting and involving not only environmental and social authorities but also nongovernmental organisations (NGOs). It is recommended to work out proposals for involving those partners in decision-making.

· BUILDING NATIONAL EVALUATION UNITS – COORDINATING AND RAISING THE CONSISTENCY OF EVALUATIONS AND REPORTS: In order to improve the informational value of the evaluation reports, the procedures and the reporting systems should be more consistent at least within each Member State. To achieve this aim, and to ensure a high quality of the evaluations it is recommended to establish national structures for environmental and social evaluation. Pro- posed tasks of Environmental and Social Evaluation Units are: · ensuring the qualification and training of experts for environmental and social screening, assessment and evaluations, · coordinating the evaluation process, · providing guidelines on audit procedures, · providing guidelines on methods for measuring and assessing environmental and social aspects, · providing guidelines on reporting for regional and national public and politicians as well as towards the European Commission, · coordinating a process for developing indicators in accordance with the Monitoring Committees.

· INDEPENDENCY AND HIGH QUALITY OF EVALUATIONS – PRECONDITIONS FOR ADVANCED EVALUATION PROCEDURES: Since evaluation has been recognized as a crucial stage in the programme and project cycle, a high quality should be ensured. An important precondition is that the external experts are independent from the regional and managing authorities. To guarantee a high quality of the audit process, measures for quality assurance in the area of environmental and social assessment and evaluation should be established120.

· INCENTIVES should be set up to stimulate a high environmental performance during programme implementation in the Member States. In other words, social and environmental process indicators could be included in the indicator set used for the allocation of the performance reserve due to Article 14 of Council regulation 1260/1999.

· EXCHANGE OF EXPERIENCE – ANALYSING FEASIBILITY AND PROBLEMS IN MAINSTREAMING PROGRAMMES: A compulsory element of the evaluation should be regular seminars or workshops with the managing and thematic authorities as well as interested parties in the field of environmental and social concerns, and with politicians.

120 An example could be the AA 1000 Standard for quality assurance. See also chapter 3.4.

65 Environmental and Social Audit

Recommendations Developing a Framework for Mainstreaming Environmental and Social Aspects in a Participatory Process · A DIALOGUE PROCESS, involving all Member States and representatives of the European Un- ion, should be initiated, accompanied by a professional moderator. This panel of delegates should aim first and foremost at identifying best practices and work out guidance papers for mainstreaming environmental and social concerns in Structural Funds programmes, measures and projects. Amendments to the Structural Funds’ Legislative Framework – Hot spots for the Revision · Results on environmental and social aspects from the findings of the auditors, the monitoring and evaluation should be used as basic information for the ALLOCATION OF THE PERFORMANCE RESERVE121. The General Provisions on Structural Funds from 1999 do not explicitly require environmental and social indicators as a part of the performance indicators. · The current General Provisions on Structural Funds require explicitly involving merely economic and social partners122 but do not mention environmental partners. A revised directive should include ENVIRONMENTAL AND SOCIAL AUTHORITHIES AND NON-GOVERNMENTAL ORGANISATIONS (NGOS); in addition, it should call upon the Member States to develop guidelines for involving those environmental and social partners, not only in advisory function but also as PARTNERS WITH DECISION-MAKING RIGHTS. · To enhance transparency of the decisions on the allocation of funds the annual monitoring and evaluation reports should describe THE PROCEDURES OF DECISION MAKING and REPORT ON THE CHARACTER AND NUMBER OF PROJECTS DENIED. Moreover, the reports should be EASILY AVAILABLE FOR THE GENERAL PUBLIC, not merely at request as laid down in the present General Provisions of Structural Funds.123 Up to now, social and environmental concerns are not yet considered to be a compulsory part of these reports. Integrating these aspects should be rendered mandatory.

121 Council Regulation (EC) No 1260/1999, Articel 44 122 Council Regulation (EC) No 1260/1999, Articel 8 (1) 123 Council Regulation (EC) No 1260/1999, Articel 40 (4)

66 Environmental and Social Audit 6. Annex 6.1 Environmental and social objectives Derived from investigations described in chapter 2, the following provides a compendium of environmental and social objectives of the documents analysed above124: The areas of action below are recommended as a baseline for deriving context indicators for Structural Funds programming within Member States (see section 5.1.1).

6.1.1 Environmental objectives

Areas of Action Objectives Combat climate Reducing the greenhouse gas emissions by 8% below 1990 levels during the first "commit- change ment period" 2008 to 2012 Foster sustainable Decoupling transport growth significantly from growth in Gross Domestic Product transport Bring about a shift in transport use from road to rail, water and public passenger transport so that the share of road transport in 2010 is no greater than in 1998 Preserve natural Ensuring that the consumption of resources do not exceed the carrying capacity of the envi- resources ronment Breaking the linkages between economic growth and resource use Achieve a percentage of 22 % of the electricity production from renewable energies by 2010 Reduce waste Achieving a significant overall reduction in the volumes of waste/ Break the links between economic growth and the generation of waste A significant reduction in the quantity of waste going to disposal and the volumes of hazardous waste produced while avoiding an increase of emissions to air, water and soil Preserve nature Protect and restore habitats and natural systems and halt the loss of biodiversity by 2010. and biodiversity Ensure sustainable fisheries and healthy marine ecosystems Conservation, appropriate restoration and sustainable use of marine environment, coasts and wetlands and significant landscape values Conservation of species and habitats, with special concern to preventing habitat fragmenta- tion Promotion of a sustainable use of the soil Environment and Aiming to achieve within one generation (2020) that chemicals are only produced and used Human Health in ways that do not lead to a significant negative impact on health and the environment Reducing the impacts of pesticides on human health and the environment Achieving quality levels of ground and surface water and of air quality that do not give rise to significant impacts on and risks to human health and the environment Substantially reducing the number of people regularly affected by long-term average levels of noise

124 Sources: see chapter 2

67 Environmental and Social Audit

6.1.1 Social objectives

Fields of Objec- Objectives tives125 Full Employment The targeted employment rate: 67% in 2005 and 70 % in 2010 Increase number of women in employment (employment rate for women: 57% in 2005 and 60 % in 2010) Increasing employment among elder persons (55-64) to an employment rate of 50% by 2010 Making it easier to reconcile work and family Increasing employment in service Furthering equal opportunities Improving employability/ Reducing skill gaps Fostering lifelong learning Improving quality and Increasing health and safety at work productivity at work Creating new balance between flexibility and security Social inclusion Fighting poverty Facilitate participation in employment Facilitate access by all to resources, rights, goods and services Prevent the risk of exclusion, amongst others elder people, handicapped, foreigners Promoting gender equality Education A substantial annual increase of per capita investment in human resources The number of 18 to 24 year olds with only lower-secondary level education who are not in further education and training should be halved by 2010 Schools and training centres, all linked to the Internet

125 Sources: see chapter 2

68 Environmental and Social Audit 6.2 Indicators and Approaches for Measuring Effects of Structural Funds The development of appropriate indicators for measuring the effects of Structural Funds is intensively discussed at the level of the European Union and in the Member States. The following section points to some facets of the ongoing discussion in order to illustrate the intensity and extent of a complex debate – without claiming to be exhaustive.

6.2.1 Activities at the Union’s Level Contextual Indicators as a Planning base for Structural Funds Since 1992 and 1993 the Commission has already developed, in co-operation with Member States, a common system of quantified indicators suitable to describe the situation in the Member States. They should be used to measure gaps in development, including environmental requirements, and are suitable for the planning phase of Structural Funds’ programmes. These indicators were entered in a database, Quid, which was revised in 1999.

The effort of developing a minimum set of data in all countries shows progress. Which data on the environment are additionally collected in the Member States is compiled in a report commissioned by EUROSTAT in 2002. The results of the survey were used to consider means of improving the collection of regional environmental data within at EU level.126

An interesting approach in the area of social context indicators is ELIZE, an Oracle database managed by EUROSTAT and financed by the European Commission, DG Regional Policy. In the framework of the project a website is being built providing regional business statistics for the evaluation of the Structural Funds. The ELIZE database provides information on topics such as employment, value added, wages and investments. Currently over 500 pages of analysis are available.

ECOTEC-Indicators In 1999, DG Regional Policy commissioned an investigation on the sustainability effects of Objective 2 programmes. The study prepared by ECOTEC Research and Consulting, mainly focusing on environmental aspects, raised substantial interest in the interested professional public and was discussed intensively and controversially.127 One important aspect of criticism was the lack in social dimension.128 Thus, the Commission set up regional pilot studies to get a feedback on the practicability of the ECOTEC model and to incite alternative and additional approaches. Amongst others, the regions in the UK, Netherlands, Finland, France and Germany were involved. In the framework of this project a scheme for project assessment recommending a qualitative approach was worked out. For each dimensions of sustainability – economics, environment and social affairs – five criteria are determined. In each criterion the projects are classified within four categories (positive impact, no impact, negative impact and impact unknown). The results of the assessment are summarized to a

126 EC, EUROSTAT (2003) 127 ECOTEC Research and Consulting (1997) 128 IZT (2001)

69 Environmental and Social Audit single score value.129 Another approach was chosen by EURES (2001) with the SQM - Sustainable Quality Management. The system is based on a software tool accessible via Internet, and it accompa- nies the users from analysis within the planning phase, to selection of projects up to the implementation phase and the evaluation process. The system is build upon an analysis matrix with 32 sustainability criteria in combination with a qualitative SWOT analysis130. The system was adopted for two local programmes in the region of the Midi-Pyrenees.131

DG REGIO Working Documents on Indicators At the beginning of the programming period, the European Commission, DG Regional Policy, published some working documents as methodological support: In Working Paper 2 the Commission tackles ex-ante evaluation, covering analysis of strengths, weaknesses and potential of the region as well as the assessment of relevance and coherence, the rationale and the overall consistency of the strategy and the evaluation of expected impacts. As one key issue the Commission identified the need of relevant indicators in order to quantify objectives and key disparities, notably in the context of core indicators.132 With WORKING PAPER 3 INDICATORS FOR MONITORING AND EVALUATION. AN INDICATIVE METHODOLOGY, DG Regional Policy suggests a methodology to develop indicators. The concept distinguishes between:

· resource or input indicators, referring to the budget allocated to each level of assistance, · output indicator, relating to activities measured in monetary or physical units (e.g. length of road constructed), · result indicators, relating to the direct and intermediate effects and changes (example: reduction of journey time because of road construction), · impact indicators, referring to the consequences of a programme and to changes in the regional state.

The Working Paper proposes a set of output, result and impact indicators for several areas of interventions, such as energy infrastructure, agriculture, forestry, promoting development of rural areas or fishery. Parallel, indicators are defined referring to the main objectives of the Structural Funds, such as employment, transport and energy infrastructure network, telecommunication and information society, environment, research and development, technology and innovation, small and medium enterprises (SME) and human resources development. This approach results in a considerable list of indicators, which – as the authors state – not is exhaustive. It is recommended to select some core indicators. All indicators proposed are linked to a code referring to the Commission’s categorisation of areas of interventions. Thus, indicators´ values can be linked to the expenditures. However, the use of the indicators is voluntary. Member States are recommended to define quantified targets for each measure or project in the ex-ante evaluation and to provide information on the achievement in the

129 IZT (2001) 130 SWOT means an methodological approach to analyse strengths, weaknesses, opportunities and threats 131 Schleicher-Tappeser, R. (2002)

70 Environmental and Social Audit mid-term evaluation.133 Based on the indicative methodology presented in working paper 3 DG Re- gional Policy additionally drafted a set of indicators specified for INTERREG III objectives.134

Textually the working papers mainly aim at socio-economic impacts. Although sustainability is defined as a target, in the context of the Structural Fund’s evaluation this term refers to the long-term effects of financial assistance. Environmental and social aspects are a part of the criteria and indicators proposed but they are only addressed unsystematically.

Another Technical Paper of DG Regional Policy gives advice in gender mainstreaming of the programmes. The paper provides checklists to check compliance with the requirements of the European Directive 1260/1999 and specifies the gender mainstreaming objectives and the information required in the planning documents to guarantee that gender objectives are taken into account at an early stage. A set of criteria is provided as support for evaluators of programmes and projects.135

The Commission’s Handbook on Environmental Assessment To support competent authorities within Member States and the regions in assessing the environmental situation as well as the impacts of the structural funds, a handbook was prepared by the con- sultancy ENVIRONMENTAL RESOURCES MANAGEMENT (ERM) on behalf of DG Environment with the active co-operation and assistance of DG Regional Policy and DG Agriculture. THE COMMISSION’S HANDBOOK ON ENVIRONMENTAL ASSESSMENT OF REGIONAL DEVELOPMENT PLANS AND EU STRUCTURAL FUNDS PROGRAMMES136 has been designed to give these authorities a thorough review of the environmental and sustainable development dimensions of the Structural Funds process. One of the key messages of the handbook is that co-operation between those authorities who are responsible for drawing up and managing EU Structural Funds programmes and those authorities who have responsibility for environmental issues, is a main success factor to ensure environmental aspects to be taken into account. The handbook aims at maximising the co-ordination and collaboration between the Development Authorities and Environmental Authorities. However, the handbook emphasises that style and methods for co-operation can be flexible, since they will have to fit into a variety of national and regional systems. The handbook provides an environmental assessment which is often referred to as Strategic Environmental Assessment (SEA) and can be defined as a systematic process for evaluating the environmental consequences of proposed policies, plans or programmes in order to ensure they are fully included and appropriately addressed at the earliest stage of decision-making on par with economic, environmental and social considerations. The Commission’s Handbook proposes a SEA process, which follows the Structural Fund programme stages. It is mainly process-oriented and provides some forms and questionnaires to assist the users, covering the following stages: · assessment of the environmental situation,

132 EC, DG REGIO (without year, a) 133 EC, DG REGIO (without year, b) 134 EC, DG REGIO (2000a) 135 EC, DG REGIO (2000b) 136 EC, DG ENV (1998)

71 Environmental and Social Audit · objectives, targets and priorities. · draft development proposal (plan/programme) and identification of alternatives, · environmental assessment of the draft proposal, · environmental indicators, · integrating the results of the assessment into the final decision on plans and programmes.

Amongst others, the Handbook specifies a set of issues to be regarded while developing the Structural Funds programmes. The issues refer to the targets specified in the 5th Environmental Framework Pro- gramme, such as the minimised use of non-renewable resources, the use of renewable resources, environmentally sound use and management of hazardous or polluting substances and waste and promoting public participation in decisions about development. As tools for gathering and assessing information on the potential impacts questionnaires, interviews, panels, checklists and trend analysis are suggested. The annexes of the handbook also provide examples of impact and performance indicators as well as examples for Operational Programme (OP) measures and summarise the environmental assessments of plans and programmes.

DG EMPL: Equal Common Database An interesting approach to gain an overview of design and effects of funded projects is the Equal Common Database (ECDB) reporting on activities in the framework of the Community Initiative EQUAL. Funded by the European Social Fund (ESF), EQUAL tests new ways of tackling discrimi- nation and inequality experienced by those in work and those looking for a job. The key principals of EQUAL are transnational co-operation, innovation, empowerment, thematic and partnership approach, dissemination and mainstreaming to ensure that EQUAL informs about policies and practice. The activities are structured on the four pillars of the European Employment Strategy: employability, entrepreneurship, adaptability and equal opportunities. In addition, EQUAL has a separate theme that addresses the needs of asylum seekers.137

The EQUAL Common Database (ECDB) contains information on all of the projects (Development partnerships - DPs) financed within the European Union and in some candidate countries. The ECDB gathers data originating from the DPs, which have been validated by the National Authorities and transmitted at European level. Target groups of this information system are those involved with EQUAL, politicians and researchers and the interested public. The database provides an overview of how many projects in the Member States and the candidate Countries are initiated in each of nine thematic areas. Each project is characterised according to a uniform structure. Users of the database get rating results on several criteria, such as nature of the experimental activities, type of innovation, structure of benefit recipients, structural, system and accompanying measures.

137 europa.eu.int/comm/employment_social/equal/index_en.html

72 Environmental and Social Audit Different search forms (simple or advanced) are available in eleven official languages in order to ob- tain the information required from the database. Help topics are available to ensure that the user un- derstands all the information given. Language options can be chosen.

DG EMPL: Guidelines for Systems of Monitoring and Evaluation of ESF Assistance in the Pe- riod 2000-2006 With this guiding paper DG Employment and Social Affairs provides a set of minimum indicators for Structural Funds distinguishing between input and output indicators, and outcome and impact indicators (see above). Furthermore, the indicators are structured by the types of activities: Assistance to persons, to structures and systems and accompanying measures, such as local development initiatives. In addition, qualitative information is specified as a part of the process evaluation, such as information on the programme and steering assistance like guidelines etc. The guidelines also cover recommendations on the organisation of monitoring and evaluation. Participation is pointed out as a key principle of the Evaluation of Structural Funds.138

DG EMPL: Practical Guide for Measuring Soft Outcomes and Distance Travelled There is also a wide range of indicators to measure social effects of projects, such as the number of employments or number of participants of qualification courses. Nevertheless, the measurement of a project’s social outcomes poses a series of challenges especially for ESF funded projects, for the most relevant measure of progress might be soft outcomes which demands an appropriate methodology for measurement. Thus, on behalf of the Commission, DG Employment and Social Affairs, a practical guide was worked out to support project managers by measuring these aspects.139 The guide defines SOFT OUTCOMES as those outcomes that represent intermediary stages on the way to achieve a hard outcome. To give an example: A hard outcome is GETTING A JOB, whereas a soft outcome is IMPROVED SELF-CONFIDENCE OR SELF-ESTEEM.

The practical guide sets up a five-step process to design a system for progress measuring of soft outcomes, including the following: · Clarification of key success factors for implementing the system: In this phase the design of the evaluation process is determined. · Decision on issues to be monitored and appropriate indicators: According to the aims to be achieved a set of relating skills, characteristics and behaviour patterns are specified which might lead to success. E.g. to get an estimation on WORK APPRAISAL, as indicator serve TASK DID NOT NEED REDOING or BEING PUNCTUAL AND RETURNING FROM BREAKS WITHOUT PROMPTING. These more qualitative indicators are measured on a four-point scale – from ABOVE STANDARD to UNACCEPTABLE STANDARD.

138 EC, DG EMPL (1999b) 139 GHK for Department for Work and Pensions (2003)

73 Environmental and Social Audit · Decision on how to measure: There are different ways of measuring soft outcomes, for example through observation, witness statements, feedback from clients or by reviewing evidence of completed tasks. · Decision on baseline a subsequent assessment: Monitoring soft outcomes requires an initial assessment against which subsequent progress can be measured. The guide outlines self- assessment, joint completion and assessment by third parties as main methodological approaches. · Reviewing progress to assess distance travelled: Here the frequency with which assessments are carried out is discussed and the reporting process is outlined.

The practical guide is based on an intensive research of current practice on approaches to measuring soft outcomes followed by ESF projects and other organisations. As no single approach will be suitable to all ESF projects every project needs to adopt the more general approach provided by the practical guide to their own use. To give further support, some approaches developed and proved in the context of specific projects were included in the guide.

Indicators of the Environmental and Social Partners Not only the European Institutions, also the interested parties and their deputies at European level are working on indicators. Due to the fact that in recent years the ESF mainly focused on the labour market, but not on social inclusion in a wider sense, the Anti-Poverty Network developed indicators on social inclusion within several projects, involving their target groups in a participatory process.140 The European Environmental Bureau (EEB) also is working on a set of environmental indicators for Structural Funds interventions.

6.2.2 Activities in the Member States Integrating environmental or social aspects and measuring the effects of Structural Funds by indicators has also been discussed in Member States for many years. Amongst others, Spain, Italy, some Scandinavian countries, the UK, Austria and Germany have developed procedures for environmental assessments and indicators for Structural Funds.

· The Scottish ESEP (East of Scotland European Partnership) prepared guidance notes for the completion of structural funds grant applications, providing a list of performance indicators. The structure of the indicator set is geared to the approach of DG Regional Policy described in Working Paper 3 distinguishing between output and result indicators and allocating them to the Commission’s categorisation of areas of interventions by a code.141

· In SPAIN a set of about 500 indicators was developed and reduced in a further discussion process. The Ministry for Environment in Madrid published a manual for planning and evalua-

140 Particia Brandellero, Anti-Poverty-Network, during the Workshop on „Environmental and Social Audit“, 16th March 2004 in Brussels 141 ESEP (2003)

74 Environmental and Social Audit tion of the structural funds programmes.142 A working document from 2004 proposes criteria for prioritisation of projects and for integrating environmental aspects in the projects´ objectives.143

· In FINLAND a system was established which is based on one core indicator: the ENVIRONMENTAL BENEFICENCE OF PROJECTS. This indicator is generated during the environmental assessment within the planning phase. For that purpose a classification for the potential projects is suggested144 and for each category criteria are defined to assess if the projects are environmentally beneficial. The assessment is carried out during project selection. The result of the assessment for each project is integrated in a monitoring system called FEMOS. FEMOS builds the database for the evaluation on measure and programme level. The regional programmes foresee that up to thirty percent of all projects should be environmentally beneficial.145

· In FRANCE the lack of coherence between the regions during the previous 1997-99 programming period made it very difficult to exploit the results of the regional evaluations at the national level. For the new programming period, it was decided that a limited number of indicators should be used across regions to enable evaluators to draw considerations on the programmes that could be aggregated at national level. These indicators are integrated into PRÉSAGE, the computer database used to register, select, manage, monitor, evaluate and control projects co-financed by the Structural Funds in France.

In relation to the horizontal themes, four options are available to record the impact of projects, which can be ‘prominent’, ‘positive’, ‘neutral’ or ‘negative’. In addition, a box can be ticked to indicate whether a project is strongly focused on a single horizontal theme (i.e. whether it is a positive action project). Projects taking up a mainstreaming approach would claim a positive impact on the horizontal themes but not be focused on horizontal themes. The application of this framework has been more complicated in practice than anticipated, because the meaning given to the above options – and more generally to the themes themselves – varies significantly from one region to another, depending on local contexts. For instance, indicators assessing the sustainability of economic development take on a particular significance in Brit- tany, where the environment has been particularly degraded, and this is different from the situation in other regions. As a result, it was recently decided to harmonise the definitions. To do this, a typology of the typical impacts of assisted projects is being created. This will be used to improve the accuracy of the data entered into PRÉSAGE.146

142 Ministerio de Medio Ambiente (1999) 143 Red De Autoridades Ambientales (2004) 144 Projects in the area of working environments and companies; Training, information and advisory projects; Research and product development projects; energy projects; Projects in agriculture, forestry or fisheries; Rural development projects; Urban development projects; Tourism projects; water and waste projects. 145 Telephone interview with Theri Trast, Ministry of Environment, 4.th of March, 2004 Berninger, K. (2003) 146 EPRC (2001).

75 Environmental and Social Audit

· The ÖSTERREICHISCHE RAUMORDNUNGSKONFERENZ developed indicators jointly with the managing authorities to ensure the comparability between the federal states. The indicators focus on projects co-financed by the European Regional Development Funds (ERDF) and cover four environmental dimensions: pollution, consumption of resources, waste and bio- logical diversity. The set of indicators vary according to the categories of project defined by volume of total eligible costs and was drafted on the assumption that larger Projects have a greater environmental effect. Projects smaller than 350,000 € have to apply a basic set of indicators focusing on four environmental dimensions, projects from 350,000 € to 3.5 m € additionally must provide written Statements explaining the reasons for the environmental indicators and additional indicators on the enterprise. Beside this information, projects larger than 3.5 m € have to work out a detailed description of the environmental impacts. 147

· In GERMANY there are several activities in the Federal States and regions: · After four years of discussion, in the Land BERLIN a set of indicators was developed for projects with costs eligible for assistance above 750,000 €. With this, approximately only 3 to 4 percent of the Structural Funds in Berlin are covered. · Under contract of the Federal State of SAXONY the research institute EURES developed a set of 16 criteria to implement sustainability demands in the programming documents and the evaluation steps. The criteria are based on an interpretation of the overall concept of sustainable development, regarding two dimensions of meta criteria: The first dimension covers environmental, socio-cultural and economic aspects, the second one refers to availability of resources, prevention of impacts and risks. As a further aspect stability and ability to develop are considered. An assessment procedure is proposed to find out the potential impacts of the programme based on five guiding questions. Additionally they suggest a method to prioritise projects. Based on the sustainability criteria the projects are categorised qualitatively by a three-coloured traffic light system.148 A similar approach was developed in NORTHRHINE-WESTPHALIA.

147 OEROK - Österreichische Raumordnungskonferenz (2002). 148 EURES (1999)

76 Environmental and Social Audit 6.3 Specific Indicators for ESF Measures

Types of activities149 Input and output indica- Output indicators specific to Environmental criteria150 tors (common minimum) the measure Measures of assis- · Amounts spent per · Beneficiaries' character- Number of projects aim- tance for persons, year istics: ing on such as · Number of benefici- · qualifications, age, other aries per year (people · individual or social char- · facilitating access to training, counselling entering, those leav- acteristics (ethnic mi- environmental in- and orientation, media- ing, carry over from norities, the disabled, formation tion, employment aid, one year to another) etc) integrated measures · Distribution between · Types of intervention per · increasing environ- such as pathway to men/women category of beneficiaries mental awareness integration, help for · Distribution accord- · Information on the dura- business start-ups) ing to status in the tion of the actions · increasing labour market · Number of development /improving environ- Assistance to compa- · Number of projects plans per year mental advisory nies and companies bene- · Number of employees services (organisation of work, fiting on an annual involved per year continuous training, basis · promoting environ- advice) mental training Measures of assis- · Amounts spent per · Number of partners in tance for structures year the project · integrating environ- and persons, such as · Number of projects · Number of trained train- mental issues into (new, current, com- ers per year other training teacher training, advi- pleted) per year · Number of employment sory and orientation or training centres bene- · promoting tele- services, creation of fiting from assistance per working or distance training/education year learning curricula, certification, · Capacity of the systems etc (number of training places offered or created) · Improvement of systems (number of certified training courses) Accompanying meas- · Amounts spent per · Number of services pro- ures, such as year vided per year · Number of projects · Number of Co-operation guidance services, (new, current, com- · protocols /contracts per tutorial system/mentor, pleted) per year year social services, local · Number and types of development initiatives, partners involved in the care for dependants measure

149 The social indicators are adopted from DG Employment and Social Affairs. see also: EC, DG EMPL (1999a) 150 The environmental criteria are based on the Finish system for assessing measures. see also: Berninger, K. (2003).

77 Environmental and Social Audit 6.4 Process Indicators - Audit Questionnaire on Procedures in Member States Definition of objectives Are environmental and social objectives clearly defined in the programming documents? Amongst regional aspects, do these objectives take into account the social and environmental objectives defined in Lisbon and Gothenburg? Are possible competitions or trade-offs between environmental, social and economic aspects identified and described in the programme? Are relevant interest groups and administrative bodies representing environmental and social concerns involved in defining these objectives? Did background research on environmental and social aspects of programming accompany the process? Compliance with objectives Is there a screening and assessment process established to assess · whether the projects contribute to economic, social and environmental objectives of the EU and/ or the programme and · whether they have negative impacts with respect to one of these bottom lines? Does the system for project selection prioritise projects according to the environmental and social objectives of the EU and/ or the programme? Have threshold, exemption and exclusion criteria been determined and adopted? Have project appraisals been denied because of potential negative impacts on social and environmental concerns? Is the process of project selection transparent? Are spokespeople for environmental and social issues, respectively, involved in the process of project selection? Participation Does the Monitoring Committees involve: · environmental and social administrative bodies? · environmental and social stakeholders? Do they have decision-making rights? Are environmental or social networks or advisory boards established and involved in planning, implementation and evaluation? Do they have decision-making rights? Did interested parties participate in planning on the level of ● programme completion ● planning of measures ● planning of projects

78 Environmental and Social Audit

Capacity Building Are training measures on social and environmental concerns established for managing authorities? Are capacities built to provide support in assessing environmental and social impacts? Are capacities built to provide support in environmental and social management of measures and projects? Are guidelines prepared for environmental and social monitoring and evaluation of programmes, measures and projects? Does the monitoring and reporting system include information concerning environmental and social conflicts caused by Structural Funds interventions within the reporting period? Evaluation Did the managing authority establish a system or procedures to ensure the independency of evaluators and a high quality of environmental and social evaluations? Are there any guiding principles set up for best practice in environmental and social evaluation?

79 Environmental and Social Audit 6.5 Audit Questionnaire on Environmental and Social Project Management

If an Environmental Impact Assessment (EIA) is mandatory: · Did a well-accepted expert or organisation carry out the Environmental Impact Analysis? · Was the nature and extent of public participation appropriate from the environmental NGO’s/ thematic authorities’ point of view? · Did an independent third party revise the EIA? · Were the abatement, mitigation and compensation measures accepted by the relevant NGOs and thematic authorities? · Did the operator determine environmental and social objectives as a baseline for monitoring? If an Environmental Impact Assessment (EIA) is not mandatory: · Was a check carried out whether the project concerns any legal environmental or social regulations? · Did the operator involve experts to ensure the legal compliance? · Did the operator carry out a screening or assessment of environmental or social impacts? · Have environmental or social NGOs or thematic authorities been involved? · Are there any objectives defined for environmental and social performance? And is it checked regularly whether they are being met? Is the operator aware of social and environmental impacts of the project? Did the operator determine a responsible person for managing environmental and social concerns within the project? Is the environmental and social performance as well as the compliance with environmental and social objectives checked regularly? Did the operator establish any procedures for environmental and social self-evaluation? Did the operator establish an environmental management system according to EMAS or ISO 14001? Have other companies involved in the project established environmental management systems?

80 Environmental and Social Audit 7 References 7.1 Literature

Amt der Salzburger Landesregierung, Abteilung 15: Wirtschaft, Tourismus, Energie (2003): Einheitliches Programmplanungsinstrument. Ziel Salzburg 2000-2006 gem. VO (EG) Nr. 1260/99. Aktualisierte Fassung 11.06.2003. Download: www.salzburg.gv.at/eppd_ziel2salzburg_30-09-03.pdf

Autorità Ambientali e Autorità della Programmazione dei fondi strutturali comunitari 2000 – 2006 (2001): Indirizzi tecnici e metodologici per la Valutazione ambientale dei Programmi Ope- rativi. Download: www.minambiente.it/SVS/fondi/docfondi/gdl2_osservazioni.pdf

Berninger, K. (2003): How to assess environmentally beneficial effects of projects in EU Regional Development Programmes. Helsinki. Ministry of the Environment. Download: www.ymparisto.fi/download.asp?contentid=9677&lan=FI.

BMLFUW - Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft (2003): Umwelterklärung 2003 des Bundesministeriums für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft für den Standort Stubenbastei 5 mit den Umweltbilanzzahlen der Jahre 2000–2002. Download: www.emas.gv.at/filemanager/download/662/UE%20BMLFUW-Text.pdf

DEFRA – Department for Environment, Food and Rural Affairs and IEEP – Institute for Euro- pean Environmental Policy (2003): Sustainability Impact Assessment (SIA). Seminar Pro- ceedings. 23 April 2002, Brussels. Download: www.ieep.org.uk/PDFfiles/PUBLICATIONS/SIASeminarDocs/SIAproceedingsfinal.PDF

EC – European Commission (without year): Technical Guidelines on Impact Assessment in the Commission . Download: europa.eu.int/comm/sustainable/docs/ia_guidelines_en.pdf

EC – European Commission (1999): Commission Working Paper: Report on Environment and Inte- gration Indicators to Helsinki Summit. SEK (1999) 1942final. Download: europa.eu.int/comm/environment/newprg/sec991942_en.pdf

EC – European Commission (2000): Management and Control Systems Audit Manual for the Structural Funds - Financial Controls in the Member States. Download: europa.eu.int/comm/employment_social/esf2000/working_documents/financial_control/en.pdf

EC – European Commission, DG EMPL (1999a): Mainstreaming Equal Opportunities for Women and Men in Structural Funds Programmes and Projects.

EC – European Commission, DG EMPL (1999b): Guidelines for systems of monitoring and evaluation of ESF assistance in the period 2000-2006.

EC – European Commission, DG REGIO (2000a): Ex-ante Evaluation and Indicators for INTERREG. The new programming period 2000 – 2006: Methodological Working Papers. Working Paper 6.

EC – European Commission, DG REGIO (2000b): Technical Paper 3.

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EC - European Commission, DG ENV (1998): A Handbook on Environmental Assessment of Re- gional Development Plans and EU Structural Funds Programmes.

EC – European Commission, EUROSTAT (2003): Availability of Regional Environmental Statis- tics in Europe. Report prepared by S. Grall (Cronos Technologies).

EC – European Commission, DG REGIO (without year, b): The Ex-Ante Evaluation of the Structural Funds interventions. Working Paper 2. Download: http://europa.eu.int/comm/regional_policy/sources/docoffic/working/doc/exante_en.pdf

EC – European Commission, DG REGIO (without year, c): Indicators for Monitoring and Evaluation. An Indicative Methodology. Working Paper 3. Download: http://europa.eu.int/comm/regional_policy/sources/docoffic/working/doc/indic_en.pdf.

ECA Watch – International NGO Campaign on Export Credit Agencies (2003): Race to the Bottom, Take II. An Assessment of Sustainable Development Achievements of ECA-Supported Projects Two Years after OECD Common Approaches Rev 6. Download: www.eca-watch.org/

Ecologic – Institute for International and European Environmental Policy (2002): EU Environ- mental Governance: A Benchmark of Policy Instruments with a focus on Agriculture, Energy and Transport. Commissioned by the Belgian Federal Department of the Environment, the Ministry for Public Health, Food Chain Security & Environment. With support of the Austrian Ministry of Agriculture, Forestry, Environment & Water Management. Download: www.ecologic.de/download/projekte/1900-1949/1909/1909_summary.pdf.

Ecologic – Institute for International and European Environmental Policy (2003): The Use of Environmental and Social Criteria in Export Credit Agencies’ Practices. A Study of Export Credit Agencies’ Environmental Guidelines with Reference to the World Commission on Dams. On behalf of Bundesministerium für Wirtschaftliche Zusammenarbeit und Entwicklung and Deutsche Gesellschaft für Technische Zusammenarbeit. Download: www.gtz.de/dokumente/dams/Ecologic_ECAs_2003.pdf

ECOTEC Research and Consulting (1997): Fostering sustainable development by Objective-2- Programmes: Guidelines for Programme Managers.

EIR – Extractive Industries Review (2003): Striking a better balance. The extractive industries review. Executive Summary. Download: www.eireview.org/EIR/eirhome.nsf/(DocLibrary)/0CE5D11BE6EDFF7C85256DF000269C9D/ $FILE/Exec%20Summary%2026%20Nov.pdf

EPRC – European Policies Research Centre (2001): Mainstreaming the Horizontal Themes into Structural Fund Programming. IQ-Net Thematic Paper 10(2). Download: www.eprc.strath.ac.uk/iqnet/iq-net/downloads/IQ- Net_Reports(Public)/10.2Horizontal%20Themes.pdf

82 Environmental and Social Audit ESEP – East of Scotland European Partnership (2003): European Structural Funds –Scotland Guidance Notes for the Completion of European Structural Funds Grant Applications (Parts one and two).

EURES – Institute for Regional Studies in Europe (1999): Entwicklung von Verfahren zur Be- rücksichtigung von Kriterien nachhaltiger Entwicklung bei der Vergabe von Strukturfondsför- dermittel. Download: www.esep.co.uk/download/guidance/function_guidance.pdf

EURES – Institute for Regional Studies in Europe (2001): Die Bedeutung von Evaluation für eine nachhaltige Entwicklung in Europa. Download: www.nachhaltigkeit.at/bibliothek/pdf/eval_schleicher_wien_3.pdf

European Parliament, Directorate-General for Research (2003): Institutional Status of the European Investment Bank, Working Paper, Economic Affairs Series, ECON 132 EN,

Forschungsschwerpunkt für Nachhaltigkeit und Umweltmanagement der TU Wien (2002): E- valuation und Indikatoren für eine nachhaltige Entwicklung. Download: www.nachhaltigkeit.at/bibliothek/pdf/monatsthemen2001/mainM01_12.pdf

GHK, Department for Work and Pensions (2003): Measuring Soft Outcomes and Distance Trav- elled: A Practical Guide. Download: www.dwp.gov.uk/asd/asd5/WP8.pdf

Global Reporting Initaive (GRI) (2002): Sustainability Reporting Guidelines 2002. Download: www.globalreporting.org/guidelines/2002/gri_2002_guidelines.pdf

Grall, S. (2003): Availability of regional environmental statistics in Europe. On behalf of the Euro- pean Commission and Eurostat.

Government of Newfoundland and Labrador (2003): A Learning Study Has Government Started Doing Business as Envisioned by the Strategic Social Plan? Final Report, December 15, 2003.

IAIA – International Association for Impact Assessment in co-operation with Institute of Envi- ronmental Assessment, UK (2002): Principles of environmental Impact Assessments Best Practice. Download: www.iaia.org/Members/Publications/Guidelines_Principles/Principles%20of%20IA.PDF

IAIA – International Association for Impact Assessment (2003): Social Impact –Assessment. In- ternational Principles. Special Publications Series No. 2. Download: www.iaia.org/Members/Publications/Guidelines_Principles/SP2.pdf

IEEP – Institute for European Environmental Policy (2002): Environmental Sustainability in UK Structural Funds Programmes 2000-2006. On behalf of English Nature and the Countryside Council of Wales. Download: www.ieep.org.uk/PDFfiles/PUBLICATIONS/EnvSustainabilityInUKSFProgrammes.pdf

IEEP – Institute for European Environmental Policy (2003): Future developments in European Regional Policy. Financed by English Nature, UK. Download: www.ieep.org.uk/PDFfiles/PUBLICATIONS/IEEP%20Regional%20Policy%20Briefing%20N ov%202003.pdf

83 Environmental and Social Audit IFC – The International Finance Corporation (1998): Procedure for Environmental and Social Reviews of Projects. Download: ifcln1.ifc.org/ifcext/enviro.nsf/Content/ESRP/$FILE/Env&SocReviewProc.pdf

IRPUD – Institut für Raumplanung an der Universität Dortmund and nova – Institut für politi- sche und ökologische Innovationen (2003): StaR - Steuerungsansatz zur Förderung einer nachhaltigen Regionalentwicklung. Background-Paper for the Workshop on „EU Structural Funds and Regional Development – the Future“, 3-4 February 2003, Berlin. On behalf of the German Environmental Agency and the Ministry on Environment, Protection of Nature and Nuclear Safety.

ISFOL – National Research Institute for Vocational Training Development (2003): Challenges for the evaluation of a complex programme: the experience of the European Social Fund in It- aly. In: Vth European Conference on The Structural Funds. Challenges for evaluation in an enlarged Europe. Budapest 26/27 June 2003. Workshop 2: Programme Evaluation. Download: europa.eu.int/comm/regional_policy/sources/docconf/budapeval/work/berliri.doc

IZT – Institute for Future Studies and Technology Assessment (2001): Nachhaltige Entwicklung durch Strukturförderprogramme in Berlin. Abschlussbericht in Kooperation mit TAURU (Trier). Im Auftrag der Investitions Bank Berlin. Gefördert durch die Europäische Kommission (DG XVI). Download: www.izt.de/pdfs/IZT_WB46_EU_Strukturfonds_Berlin.pdf

Leeds Metropolitan University (2003): Mid-term evaluation of the Yorkshire and Humber 2000- 2006 Objective 2 Programme. Download: www.goyh.gov.uk/objective2/documents/Ob2MTE140903.pdf

Ministerio de Medio Ambiente (1999): Indicatores para el seguimenzo y evaluación de los fondos estructurales. Guí a practica. Madrid.

Ministerio de Medio Ambiente (2003): Red De Autoridades Ambientales - Environmental Autho- rithies Network..

OAG – Office of the Auditor General of Canada (2003): Report of the Commissioner of the Envi- ronmenta and Sustainable Development to the House of Commons. The Commissioner´s Per- spective - 2003. Download: www.oag-bvg.gc.ca/domino/reports.nsf/html/c20031000ce.html/$file/c20031000ce.pdf

OECD – Organisation for Economic Co-operation and Development (1993): OECD core set of indicators for environmental performance reviews". OECD Environment Monographs No. 83. OECD.

OECD – Organisation for Economic Co-operation and Development (2000): Indicators to measure decoupling of environmental pressure from economic growth.

OECD – Organisation for Economic Co-operation and Development (2003a): Recommendation on Common Approaches on Environment and Officially Supported Export Credits. Download: www.oecd.org/document/56/0,2340,en_2649_201185_21688824_1_1_1_1,00.html

OECD – Organisation for Economic Co-operation and Development (2003b): Working Paper on Export Credits and Credit Guarantees. Member’s Procedures and Practices regarding officially supported export credits and the Environment - As of October 2003.

84 Environmental and Social Audit Download: www.olis.oecd.org/olis/2003doc.nsf/43bb6130e5e86e5fc12569fa005d004c/6d5045ad46e7cc4e c1256dc8002862bd/$FILE/JT00152082.PDF

OED – Operations Evaluation Department of the World Bank (2001): The World Bank and Global Public policies and Programs: An Evaluation Strategy, September 13, 2001.

OED – Operations Evaluation Department of the World Bank (2002): Annual Review of Devel- opment Effectiveness 2002 (ARDE). Download: www.worldbank.org/oed/arde2002/

OED – Operations Evaluation Department of the World Bank (2003): Annual Report on Opera- tions Evaluation 2003. Download: www.worldbank.org/oed/aroe2003/

OED – Operations Evaluation Department of the World Bank (2004): Social Development Mat- ters. In: OED Reach. March 2, 2004. Download: nweb18.worldbank.org/OED/OEDDocLib.nsf/DocUNIDViewForJavaSearch/55489E88A51C 9B0585256E4B00604685/$file/OED_Reach_Social_Dev_Matters.pdf

OEROK – Österreichische Raumordnungskonferenz (2002): Methode zur umweltbezogenen Evaluierung von Strukturfonds“ Oktober 2002. Download (Summary): www.oerok.gv.at

Rauschelbach, B. (2002): Die Umweltverträglichkeitsprüfung in Projekten der Entwicklungszusam- menarbeit. UVP-Report 4/2002.

Red De Autoridades Ambientales (2004): Guía orientativa de Indicatores de Integración ambintal y criterios ambientales de Priorización de Projectos. Documenta de Trabajo (Propuesta). Valen- cia.

Schleicher-Tappeser, R. (2002): Assessing Sustainable Development – The SQM approach. Download: www.sqm-praxis.net/info/download/schleicher_sevilla_2002_paper.pdf.

Social Accountability International (2001): Social Accountability 8000. Download: www.cepaa.org/index.htm

World Bank (1999a): Environmental Assessment Sourcebook. Download: lnweb18.worldbank.org/ESSD/envext.nsf/47ByDocName/ToolsEnvironmentalAssessmentSour cebookandUpdates

World Bank (1999b): The World Bank Operational Manual, BP 1355. Download: wbln0018.worldbank.org/institutional/manuals/opmanual.nsf/0/F2EA169C5A281707852569A 8006EB2D4?OpenDocument

World Bank (2000): Ibrekk, H.-O.: Donor Survey of Environmental and Effectiveness. Download: lnweb18.worldbank.org/essd/essd.nsf/GlobalView/BPdonor.pdf/$File/BPdonor.pdf

World Bank (2002): Social Development Department, Social Analysis Sourcebook. Download: www.worldbank.org/socialanalysissourcebook/Social%20AnalysisSourcebookAug6.pdf.

85 Environmental and Social Audit World Bank (2003): A Common Framework: Converging Requirements Multilateral Financial of Institutions for Environmental Impact Assessment (EIA). Environmental Impact Assessment (EIA). Download: www1.worldbank.org/harmonization/romehlf/Background/MFI%20Final%20Jan17%202003- Eng.pdf

Wynne, A. (ACCA) (2004): Public sector sustainability. Download: www.accaglobal.com/publications/public_eye/42/721418

WWF – World Wildlife Fund For Nature (2003): Learning from the Past – Looking to the Future.

7.2 Communications, Regulations and Standards

AA 1000 Assurance Standard (2003). Download: www.accountability.org.uk/resources/default.asp?pageid=67#as.

AA 1000 framework (1999): Standards, guidelines and professional qualification. Download: www.accountability.org.uk/uploadstore/cms/docs/AA1000%20Framework%201999.pdf.

Commission Regulation (EC) No 438/2001 of 2 March 2001 laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards the management and control systems for assistance granted under the Structural Funds. Official Journal of the European Communities, L 63/21.

Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment. Official Journal NO. L 175 , 05/07/1985 P. 0040 - 0048

Council Directive (EC) 97/11 of 3 March 1997 amending Directive 85/337/EEC on the assessment of the effects of certain public and private projects on the environment. Official Journal NO. L 073 , 14/03/1997 P. 0005

Council Directive (EC) 2001/42 on the assessment of the effects of certain plans and programmes on the environment, Official Journal L 197, 21/07/2001 P. 0030 – 0037; Download: europa.eu.int/comm/environment/eia/full-legal-text/0142_en.pdf

Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds. Official Journal of the European Communities, L 161/1. 26.6.1999.

Council Regulation (EC) No 761/2001 of the European Parliament and of the Council of 19 march 2001 allowing voluntary participation by organisations in a Community eco-management and audit scheme (EMAS). Official Journal of the European Communities. L 114/11.

European Commission (1998): Communication from the Commission to the European Council: Partnership for Integration. IP/98/471. Download: europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.getfile=gf&doc=IP/98/471|0|AGED&lg= EN&type=PDF

86 Environmental and Social Audit European Commission (2001): A sustainable Europe for a better world: A European strategy for Sustainable Development”. COM (2001)264final.

European Commission (2002): Communication from the Commission on Impact Assessment, COM(2002) 276 final, Brussels, 5.6.2002 Download: europa.eu.int/comm/sustainable/docs/2002_08492_impact_assessment_en.pdf

European Commission (2003 a): Communication from the Commission to the Council and the European Parliament 2003 - Environment Policy Review. Consolidating the environmental pillar of sustainable development. COM (2003) 745 final. Brussels, 3.12.2003. Download: europa.eu.int/comm/lisbon_strategy/pdf/COM2003_745_en.pdf

European Commission (2003 b): Commission Recommendation on the Broad Guidelines of the Economic Policies of the Member States and the Community (for the 2003-2005 period). COM (2003) 170 final. Download: europa.eu.int/comm/economy_finance/publications/european_economy/2003/ comm2003_170en. pdf

European Commission (2003c): Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions: Social Policy Agenda. COM(2000) 379 final. Download: europa.eu.int/comm/employment_social/social_policy_agenda/com379_en.pdf

European Commission (2003 d): Communication from the Commission to the Council, the Euro- pean Parliament, the Economic and Social Committee and the Committee of the Regions: Joint Report on Social Inclusion: summarizing the results of the examination of the National Action Plans for Social Inclusion (2003-2005). COM(2003)773 final. Download: http://europa.eu.int/comm/employment_social/soc-prot/soc-incl/com_2003_773_jir_en.pdf

European Communities (2002a): Decision No 1600/2002/EC of the European Parliament and of the Council of 22 July 2002 laying down the Sixth Community Environment Action Programme. Official Journal of the European Communities from the 10.9.2002. Download: europa.eu.int/eur-lex/pri/en/oj/dat/2002/l_242/l_24220020910en00010015.pdf

European Communities (2002b): Consolidated Version of the Treaty on European Union. Official Journal of the European Communities, 24.12.2002 Download: europa.eu.int/eur-lex/en/treaties/dat/EU_consol.pdf

European Council (1999): Presidency Conclusions Helsinki European Council 10 and 11 December 1999. Download: http://ue.eu.int/en/Info/eurocouncil/index.htm

European Council (2000a): Presidency Conclusions Lisbon European Council 23 and 24 March 2000. Download: ue.eu.int/newsroom/LoadDoc.asp?MAX=1&BID=76&DID=60917&LANG=1

European Council (2000b): Presidency Conclusions Nice European Council 7, 8 and 9 December 2000. Download: ue.eu.int/en/Info/eurocouncil/index.htm

European Council (2001): Presidency Conclusions Gothenburg European Council 15 and 16 June 2001. Download: ue.eu.int/newsroom/makeFrame.asp?MAX=1&BID=76&DID=66787&LANG=1&File=/pressD ata/en/ec/00200-r1.en1.pdf&Picture=3

87 Environmental and Social Audit

European Council (2003): Council Decision of 22 July 2003 on guidelines for the employment policies of the Member States (2003/578/EC). Download: europa.eu.int/eur-lex/pri/en/oj/dat/2003/l_197/l_19720030805en00130021.pdf ISO – International Standard Organization (1996): ISO 14001: Environmental Management Sys- tems – Specification with Guidance for use. Order: At the national standardisation bodies or the International Organization of Standardization (www.iso.ch/iso/en/ISOOnline.frontpage)

ISO – International Standard Organization (1997): ISO 14040: Environmental Management - Life Cycle Assessment - Principles and Framework. Order: see above

ISO – International Standard Organization (1999): Environmental management - Environmental Performance Evaluation – Guidelines. Order: see above

R.S.C., c. A-17 (1995): An Act respecting the Office of the Auditor General of Canada and sustainable development monitoring and reporting, 1995, c. 43, s.1. Download: www.canlii.org/ca/as/1995/c43/sec3.html

7.3 Internet Sources

Commissioner of the Environment and Sustainable Development: www.oag-bvg.gc.ca/domino/cesd_cedd.nsf/html/menu1_e.html (March 2004)

Environmental European Bureau (EEB) (Strategic Impact Assessments): www.eeb.org/activities/env_impact_assessment/main.htm (March 2004)

European Commission: europa.eu.int/comm/publications/archives/booklets/move/15/txt_de.htm, (February 2004).

European Commission: europa.eu.int/comm/regional_policy/intro/regions4_en.htm (February 2004)

EQUAL: europa.eu.int/comm/employment_social/equal/index_en.html

EUROSAI – European Organisation of Supreme Audit Institutions, Working Group on Envi- ronmental Auditing: www.nik.gov.pl/intosai/index.html (March 2004)

EUROSAI – European Organisation of Supreme Audit Institutions, Working Group on Envi- ronmental Auditing . Audit findings of the national audit of animal protection. www.nik.gov.pl/intosai/k_pl3_an.html

Institute of Social and Ethical AccountAbility: www.accountability.org.uk, (February 2004).

OECD – Organisation for Economic Co-operation and Development: www.oecd.org, (February 2004).

Resource Renewable Institute: www.rri.org (March 2004)

Sustainability Quality Management: www.sqm-praxis.net, (February 2004)

The Netherlands Embassy in Washington: www.netherlands-embassy.org/article.asp?articleref=AR00000287EN (March 2004)

88 Environmental and Social Audit

UN-CSD – United Nations Divisions for Sustainable Development: ww.un.org/esa/sustdev/natlinfo/indicators/isd.htm (March 2004)

Urgewald: www.urgewald.de, (February 2004)

VROM: www2.minvrom.nl/pagina.html?id=5036 (March 2004)

7.4 Interviews 1. Shona Atkinson, European Investment Bank, 18 March 2004

2. Thomas Bender, European Commission, DG EMPL, 18 February 2004

3. Hendrik Fehr, European Court of Auditors, 18 March 2004

4. Stephanie Lang, WWF Brussels, 28 January 2004 and 9 March 2004

5. Dörthe Kunellis, BMLFUW Austria, 22 March 2004 6. Andrea Mairate, European Commission DG REGIO, 24 February 2004

7. Jonathan Parker, European Commission, DG ENV, 16 March 2004

8. Günter Raad, European Commission, DG ENV, 10 and 11 February 2004

9. Aldo Ravazzi, OECD-WPEP Committee and Italian Environmental Authority for EU Struc- tural Funds at the Ministry of Environment - DG Sustainable Development, 26 February 2004

10. Burghard Rauschelbach, Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), 9 March 2004

11. Ms Rupp, European Parliament, Committee of Budgetary Control Secretary, 29 January 2004

12. Carl Schlyter, European Parliament, Assistant Green Political Group, 24 February 2004

13. Ms Stärger, German Federal Ministry of Environment, 29 January 2004

14. Mr Stutz, German Federal Environmental Agency, 29 January 2004

15. Roger Wolf, Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), 26 January 2004

16. Raul Zorita-Diaz, European Commission, DG ENV, 16 March 2004

7.5 Workshop On 16 March 2004 a Workshop on “Environmental and Social Audit” took place in the European Parliament, involving relevant partners evaluating and auditing Structural Funds.

89 Environmental and Social Audit External Experts 1. Shona Atkinson, European Investment Bank 2. Patrizia Brandellero, European Anti-Poverty Network 3. Fabienne De Maertelaer, European Investment Bank, SG/Affaires Interinstitutionnelles 4. Hendrik Fehr, Court of Auditors 5. Stefanie Lang, WWF European Policy Office 6. Andrea Mairate, European Commission, DG Regional Policy, Evaluation Unit 7. Aldo Ravazzi, OECD-WPEP Committee and Italian Environmental Authority for EU Struc- tural Funds at the Ministry of Environment - DG Sustainable Development 8. Werner Stengg, European Commission, DG Budget, Evaluation Unit 9. Anna Barnett, European Commission, DG Agriculture, Evaluation Unit 10. Richard Etievant, European Commission, DG Agriculture, Audit Unit 11. Anastasios Nychas, European Commission, DG Environment, Unit Sustainable Territorial Development

90 New .eu Domain

Changed Web and E-Mail Addresses The introduction of the .eu domain also required the web and e-mail addresses of the European institutions to be adapted. Below please find a list of addresses found in the document at hand which have been changed after the document was created. The list shows the old and new address, a reference to the page where the address was found and the type of address: http: and https: for web addresses, mailto: for e-mail addresses etc.

Page: 82 Old: http://europa.eu.int/comm/regional_policy/sources/docoffic/working/doc/exante_en.pdf Type: http: New: http://europa.eu/comm/regional_policy/sources/docoffic/working/doc/exante_en.pdf

Page: 82 Old: http://europa.eu.int/comm/regional_policy/sources/docoffic/working/doc/indic_en.pdf. Type: http: New: http://europa.eu/comm/regional_policy/sources/docoffic/working/doc/indic_en.pdf.

Page: 87 Old: http://europa.eu.int/comm/employment_social/soc-prot/soc-incl/com_2003_773_jir_en.pdf Type: http: New: http://europa.eu/comm/employment_social/soc-prot/soc-incl/com_2003_773_jir_en.pdf

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