CONT Delegation visit 22 - 26 February 2012 Haiti © MINUSTAH/Marco Dormino Fact-finding delegation of the Budgetary Control Committee to HAITI, 22-26 February 2012 Table of contents 1. The latest programme 2. Briefing notes: – Policy Department D note. – EXPO Policy department note 3. Recent EP resolutions relevant to the issue: – resolution of 2.2.2012 on the budgetary control of EU humanitarian aid managed by ECHO, – resolution of 15.12.2011 on budgetary control of EU financial assistance to Afghanistan, – resolution of 5.7.2011 on the future of EU budget support to developing countries. 4. Additional information: European Commission: – programmes HAITI; – Relevant Chapters of the EDF Financial Guide. – Project fiches Interim Haiti Recovery Commission: – Mission Statement – Decree UN - OCHA office in Haiti. VOICE (Voluntary Organisations in Cooperation in Emergencies) input. Curricula. DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT D: BUDGETARY AFFAIRS Preparatory Note for the CONT delegation visit to Haiti DELEGATION VISIT OF 22 - 26 FEBRUARY 2012 Prepared by: Jean-Jacques GAY Anna Marlene KANIS 01/02/2012 EN Haiti Preparatory Note LIST OF ABBREVIATIONS ACF - Action Contre la Faim ACTED - Agency for Technical Cooperation and Development CSCCA - le Cour Supérieure des Comptes et Du Contentieux Administrative DG ECHO - Directorate General Humanitarian Aid and Civil Protection DG DEVCO - Directorate General Development and Cooperation EDF - European Development Fund Groupe URD - Groupe Urgence Réhabilitation Développement IMF - International Monetary Fund MDG - Millennium Development Goal MdM - Médecins du monde MSF - Médecins Sans Frontières NGO - Non-Governmental Organization UN - United Nations WASH - Water, Sanitation and Hygiene 2 Haiti Preparatory Note 1. GENERAL OVERVIEW1 Haiti has suffered from a long period of political instability and economic decline. Poverty is widespread and social indicators are at the lowest level as compared to other countries in the Western hemisphere. Since the establishment in 2004 of MINUSTAH, the United Nations Stabilisation Mission in Haiti, the international community, including the EU, has been providing assistance to Haiti for restoring democracy and promoting socio-economic development. The country faces a multitude of structural development challenges not least because of the damages and human suffering caused by tropical storms, the food crisis of 2008, the earthquake that struck in January 2010 and very recently the outbreak of a cholera epidemic. More in particular, the 12 January 2010 earthquake resulted in approximately 230.000 dead, 300.000 injured and 1.000.000 homeless. The economic cycle was completely disrupted, with total damages worth an estimated US$7.9bn, equivalent to 120% of Haiti’s GDP. At the International Donor Conference of 31 March 2010 in New York, the Government presented a strategy for post earthquake reconstruction and development to the international community. Donors pledged a total of USD 9.8 billion for medium and long- term reconstruction. The EU made a single pledge amounting to EUR 1.235 billion, pooling contributions from the European Commission, 18 EU Member States and the EIB. Total pledge, including later contributions of the EC, is EUR 522 M. Furthermore, an allocation of EUR 20 M has recently been decided under the Millennium Development Goal (MDG) initiative for a programme aiming at catalysing progress in MDG 1c. In order to respond to the new needs and priorities, the EU has mobilised additional resources, adjusted ongoing programmes and adopted new programmes in line with Government's strategic priorities. At the request of the Haitian Government, focal sectors remain Infrastructure and Governance/Decentralisation, key sectors for the medium and long term development of the country. In addition, the European Commission has mobilised EUR 23 M for a programme that aims at rebuilding homes to allow displaced people to return to their neighbourhoods. Important allocations are also earmarked for Food Security and Agriculture, under different instruments such as the Food Facility, the Food Security Thematic Programme and the MDG initiative. Out of the EUR 522 M pledge made by the Commission at the International Donor Conference in New York in March 2010, EUR 395 M have been committed. End 2011, the total amount of payments in favour of Haiti since January 2010 reached more then EUR 210 M, which corresponds to an average of over EUR 100 M per year. 1 DEVCO Briefing on EU cooperation with Haiti ; http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/393&format=HTML&aged=0&language=EN&gui Language=en ; EC Factsheet Haiti one year on 3 Haiti Preparatory Note 1.1 Summary of the EU Pledge New York – 31 March 2010 Short term - Support for Early Recovery and Reinforcing State Capacity 100,0 M€ Medium Term - Recovery / Reconstruction and Rehabilitation Phase 200,0 M€ Increase 10th EDF B-envelope (emergency reserve) 60,0 M€ Increase 10th EDF A-envelope (programmable aid) 100,0 M€ TOTAL 460,0 M€ Additional Funds since New York Additional funds available for reconstruction and development 29,0 M€ Support to the electoral process 5,0 M€ V Flex allocation 2010 26,0 M€ Pilot project for Microfinance for Agriculture in Haiti 2,0 M€ TOTAL 62,0 M€ GRAND TOTAL 522 M€ 2. HAITI PUBLIC ADMINISTRATION AND PUBLIC SERVICES 2 Prior to the earthquake, Haiti’s public administration was already suffering from serious structural problems. Like the other national institutions, it did not have the trust of the population, who perceived it to be incapable of supplying essential services and affected by endemic corruption. The lack of technical skills and diligence and lack of resources greatly limited the capacity to meet the population’s demands for basic services. A major reform of the public administration, in particular the Framework Programme for State Reform aimed at modernising the administration and decentralisation, was under way. Following the earthquake, the public administration has sustained very high human and material losses. The destruction of office equipment, files and computer data has affected several key Ministries which were in the affected buildings, constituting major damage for the sector. The destruction of buildings such as the National Palace, the Prime Minister’s Office, the Parliament and the Law Courts constitutes an inestimable symbolic loss for the nation of Haiti. 2 http://www.refondation.ht/resources/PDNA_Working_Document.pdf 4 Haiti Preparatory Note 2.1 Budgetary control3 During 2004-2006, the Haitian Government made significant progress in the implementation of economic governance reforms. These included actions to improve the legal framework, create and strengthen core public institutions, and enhance financial management processes and procedures. Despite this progress, Haiti's country financial and accountability and procurement systems still face significant challenges. The structure of Haiti’s public spending, in particular the investment budget is mainly determined by foreign aid flows. Volatility of aid flows, limited absorptive capacity, and poor budget planning have resulted in low execution rates. Despite a relatively comprehensive institutional and legislative framework, the internal and external oversight of the budget is not effective given the lack of capacity of the Institutions. Internal controls are very weak or not yet functioning. External controls are limited by the capacity of the Supreme Audit Institution: le Cour Supérieure des Comptes et du Contentieux Administrative (CSCCA). The role of the parliament has been limited to the approval of draft appropriation laws during the past few years. Budget Review Acts as well as annual audit reports of the CSCCA, when available, were not subjected to parliamentary oversight. 3. EU RESPONSE TO THE EARTHQUAKE4 The earthquake of January 2010 in Haiti took place while the new institutions resulting from the Lisbon Treaty were being put in place. The new Commission was in the process of being nominated when the earthquake struck. The joint planning mechanisms between the Commission and the Member States which were established by the Lisbon Treaty were implemented and tested in practice for the first time. An extraordinary session of the Foreign Affairs Council was organized on 18 January, 6 days after the disaster. As soon as they had been nominated, the High Representative and the Commissioners were very active in providing coordination between the Haitian government, the United Nations (UN), the US government and the Secretary General’s Special Envoy, Bill Clinton. 3.1 Humanitarian Aid and Civil Protection5 The disaster took place only a few days after the European Civil Protection mechanism had been integrated into Directorate General Humanitarian Aid and Civil Protection (DG ECHO). Even though the integration was not yet running completely smoothly, this new DG ECHO department was able to ensure that there was a certain amount of coherence in the deployment of search and rescue teams, equipment and Member States’ emergency relief thanks to past experience (when it had been attached to the Directorate-General for the Environment). 3 http://www- wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=6 4187510&searchMenuPK=64187283&theSitePK=523679&entityID=000333037_20080416035906&searchMenu PK=64187283&theSitePK=523679 4 http://ec.europa.eu/echo/files/evaluation/2011/Groupe-URD_evaluation_Haiti_en.pdf ; 5http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/393&format=HTML&aged=0&language=EN&gu