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Support to justice via Budget Support

Justice, Democracy and Rule of Law Training

17 June 2013

Petra HagelstamKatarina Motoskova Aurelia Willie

Unit B1– Governance, Democracy, Gender, Human Rights

New EU PolicyNew EU Policy

• "Increasing the impact of EU Development Policy: an Agenda for Change"

• "The Future Approach to EU Budget Support to Third Countries"

• "Human Rights a the Heart of EU External Actions"

• "Spring Communications"

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Budget Support and Fundamental Values – a Budget Support and Fundamental Values – a differentiated approachdifferentiated approach

• “The commitment and record of partner countries to democracy, human rights and the rule of law is one of the key determinants of EU development cooperation, including general and sector budget support, and should be assessed to determine if using budget support is appropriate.” (Council Conclusions)

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Budget Support and Fundamental Values – Budget Support and Fundamental Values – a differentiated approacha differentiated approach

Good Governance and Development Contracts:

Pre-condition on fundamental values applies; country's track record and commitment is assessed against core-benchmarks;

Sector Reform Contracts:

Concerns related to the fundamental values are balanced against the need to respond to the needs of the population;

State Building Contracts:

Fundamental values analysis is forward-looking, balancing risks against the possible implications of non-engagement.

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Budget Support and Fundamental Values Budget Support and Fundamental Values – a differentiated approach– a differentiated approach

• Fundamental values assessment • Core internationally recognised standards related to

human rights, democracy and the rule of law

• Assessment in line with Annex 12 of new BS Guidelines by DELs; review by HQ before final decision by the BSSC

• Risk Management Framework• Political risks related to human rights, democracy and the

rule of law as well as insecurity and conflict

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Budget Support and Fundamental Budget Support and Fundamental Values – a differentiated approachValues – a differentiated approach

Outcome of the assessment

GGDC: precondition i.e. whether GGDC is an option;SRC: define how fundamental values should be addressed;SBC: current situation as baseline.

For all contracts, the assessment also feeds into: - Monitoring in the risk management framework; - Budget support dialogue or the policy dialogue; - Design of the programme.

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2. What is risk management?

Risk is any event or issue that could occur and adversely impact the achievement of the Commission’s political, strategic and operational objectives.

Risk management is a continuous, proactive and systematic process of assessing, mitigating, and monitoring risks.

Risk Response & Mitigation

Monitoring& Reporting

Identification &Assessment

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2. What is risk management? Risk assessment input to BS programme cycle

-Basis for decision making

-Identifies main risks and corresponding risk miting measures

-Basis for monitoring of the risks & mitigating measures

- Inform political and policy dialogue

3. How to assess risks?

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Focus on country systems and risks that may impede achieving the general objectives of budget support:Eradicate PovertySustainable and Inclusive GrowthConsolidate Democracies

One assessment per country, not per contract.Based on existing assessments (HR strategies, eligibility criteria, etc.)

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RISK MANAGEMENT FRAMEWORK

Political Risks Macroeconomic Risks

Developmental Risks

PFM Corruption / Fraud

Fu

nd

amen

tal v

alu

es

Human Rights

Macroeconomic Policies and

Financial Sector

Public Policy Comprehensiveness of the Budget

Corruption & Fraud

Democracy Debt Sustainability Government Effectiveness

Controls in Revenue Collection & Budget

Execution

Rule of Law Vulnerability and Exogenous Shocks

Procurement

Insecurity and Conflict

External Audit

3. How to assess risks?

3. How to assess risks?

Templates based on excel sheets:

•Risk Questionnaire: Risk identification

•Risk register: Main risk management tool (risk identification, risk mitigating, risk monitoring)

•Country Risk Profile: Summary for decision-makers

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3. How to assess risks?

RISK QUESTIONNAIRE

Is designed to guide risk identification based on existing assessments (EU HR strategies, open sources: UN Rapporteurs international NGOs)For each question: Provide risk rating and justification (narrative comment)Automatic aggregation of ratings for each risk dimension

Keep in mind:Rating captures the likelihood and the impact with regards to the general objectivesRisk assessment is forward looking over the whole contract periodIt is an internal management tool not done jointly with the partner country

3. How to assess risks?

RISK REGISTER

Summarises the rating and the risk level of each risk dimension as identified in the questionnaire

Provides an average rating and score for each category of risk

Supplementary information for each risk dimension:

Narrative summary of the major risks and possible consequences Description of proposed mitigation measures Estimation of the impact of the mitigating measures in order to assess

the residual risk (i.e. risk after mitigation measures) – provided by HQ Analysis of the risk trend (comparing previous risk ratings with current

ones) – provided by HQ Monitoring the implementation of the mitigating measures

(during implementation)

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3. How to assess risks? Country Risk Profile

Highlighting key elements of the assessment based on the risk register

• Major risks and benefits• Key mitigating measures• Overall recommendation• Average ratings (inherent/residual) on

country and category level• Risk levels and risk trends

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4. How to address risks? Mitigation …

Is the response to risks

Is a joint effort of partner country & donors

Imply elaboration and implementation of clear and comprehensive action plan to address key risks (substantial / high risks)

Expected impact

Risks

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4. How to address risks?

- Substantial and high risks HAVE TO be addressed by mitigating measures ( + satisfactory progress during implementation)

- Budget support programmes with substantial and high risks will be discussed at the Budget Support Steering Committee (BSSC)

- Higher risks may be acceptable for State Building Contracts, not for GGDC

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5. How to monitor risks?

Check that identified risks are adequately managed Assess the implementation progress of mitigating

measures Identify any new risks or changes in circumstances

Regular at least yearly up-date of risk questionnaire, risk register, and country risk profile

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GGDCs:

• - great opportunity to analyze and address the political dimension of justice reforms and good governance dynamics

» smart use of FV assessment and RMFk (PEA)

» Mitigating measures: monitoring, follow-up

• - political leverage and pressure on Govs to do and be held accountable

• -indicators influenced by FV assessment, ideally touching on judicial independence and integrity, accountability and transparency, corruption, HR violations, ratification of HR Treaties etc.

From GGDS to SRCs

• Scenario no.1: SRCs following successful completion of GGDCs or the other way around

• Scenario no.2: GGDCs turned into SRCs in case of deterioration

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SRCs• - no major innovative elements compared to previous

methodology

• - but flexible enough for an innovative approach to JSR:• political and technical

• Pre-requisite: thorough preparation and planning (HRBA at sector level)

• Key: sequencing

• Need to reinforce: EU presence and influence to technical WGs; policy dialogue; progress monitoring and reporting.

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SBCs• For fragile situations: ideally an integrated JSSR

approach.• Focus: basic services to population (access to justice;

pre-trial detention; prison conditions).

• For countries in democratic transition (e.g. ENP South):

• Ensuring political attention and (ideally) response to independence and accountability, non-interference.

• NOT THE VENUE FOR LONG TERM REFORMS!

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QUESTIONS?

• Thank you for your attention!