Annual action programme in favour of Mercosur · Draft COMMISSION DECISION of[...ļ on the Annual...

Draft

COMMISSION DECISION

of[...ļ

on the Annual Action Programme 2007 in favour of MERCOSUR to be financed under Article 19.09.01 of the general budget of the European Communities

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1905/2006 of 18 December 2006 establishing a financing instrument for development cooperation1, and in particular Article 6 and 22 thereof,

Having regard to Council Regulation (EC, Euratom) № 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities2, in particular Article 53 thereof,

Whereas:

(1) The Commission has adopted the Regional Strategy Paper for MERCOSUR and the Regional Indicative Programme for the period 2007-20133, point 5.3, which indicates the key priority sector of: (i) "Institutional support", (ii) "Support for the deepening of MERCOSUR and implementation of the future EU-MERCOSUR Association Agreement" and (iii) "Efforts to strengthen and enhance civil society participation, knowledge of the regional integration process, mutual understanding and mutual visibility".

(2) The objectives pursued by the Annual Action Programme are:

Support to the Permanent Court of Review:

General Obiective: To strengthen and consolidate the legal aspects and legal certainty of MERCOSUR - an essential and fundamental step in the process of regional integration.

Specific Objective: To reinforce the operational capacity of the Permanent Court of Review, created by the Protocol of Olivos, in order to enhance its performance and ensure uniform and generalised implementation of MERCOSUR legislation.

Support to the MERCOSUR Secretariat:

General Objective: To improve the MERCOSUR integration process and regional cohesion by reinforcing the role of the MERCOSUR Secretariat, its institutional capacity and organisational structure.

OJ L 378, 27.12.2006, p.41 OJ L 248, 16.09.2002, p.l. Regulation as last amended by Regulation (EC, Euratom) No 1995/2006 of 13 December 2006 (OJ L 390,30.12.2006, p. 1) C/2007/3671,02.08.2007

Specific Objective: To strengthen the Secretariat's operational and managerial capabilities in order to transform it in an effective executive body capable of handling new tasks and responsibilities, in particular the MERCOSUR Convergence Fund (FOCEM).

Support to the Higher Education Mobility Support Programme:

General objective; To support the construction of a MERCOSUR citizenship with a feeling of belonging to the region within the members of the university community of the 4 countries.

Specific objective: Contribute to the consolidation and expansion of the Higher Education Mobility Support Programme for MERCOSUR undergraduates.

Support to MERCOSUR Information Society:

General objective: To foster joint policies and strategies in the field of Information Society at the level of MERCOSUR and to reduce the digital divide and the asymmetries related to the Information and Communication Technologies (ICTs) in the region.

Specific objective: To expand the skills and use of ICTs by the decision makers in the public and private sector, as well as the civil society in MERCOSUR through joint training programmes, development of ICT infrastructures and applications of electronic trade within the block.

(3) This decision constitutes a financing decision within the meaning of Article 75(2) of Council Regulation (EC, Euratom) № 1605/2002, Article 90 of Commission Regulation № 2342/2002 of 23 December 20024 and Article 15 of the Internal Rules5.

(4) It is appropriate to define the term "substantial change" in the meaning of Article 90.4 of Commission Regulation № 2342/2002 for the application of this decision.

(5) The measures provided for in this decision are in accordance with the opinion of the DCI Committee set up under Article 35.1 of Regulation (EEC) No 1905/2006.

HAS DECIDED AS FOLLOWS:

Article 1

The actions "Support to the Permanent Court of Review", "Support to the MERCOSUR Secretariat", "Support to the Higher Education Mobility Support Programme" and "Support to MERCOSUR Information Society", which constitute the Annual Action Programme in favour of MERCOSUR, the texts of which is set out in the Annexes I - IV, is approved.

4 OJ L 357, 31.12.2002, p. 1. Regulation as last amended by Regulation (EC,Euratoin) No 478/2007 of 23 April 2007 (OJ L 111, 28.04.2007, p.l)

5 Commission C/2007/513, C/2007/514, C/2007/433

Article 2

The maximum contribution of the Community is set at EUR 12.000.000 to be financed within the limits of the available resources of budget line 19.09.01 of the general budget of the European Communities for 2007.

Article 3

Within the maximum indicative budget of all the specific actions, cumulated changes not exceeding 20% of the maximum contribution of the Community are not considered to be substantial provided that they do not significantly affect the nature and objectives of the Annual Action Programme.

The authorising officer may adopt such changes in accordance with the principles of sound financial management.

Done at Brussels,

For the Commission

Member of the Commission

ANNEXI

ACTION FICHE FOR MERCOSUR

IDENTIFICATION

Title

Total cost

Aid method / Management mode

DAC-code

Support to the MERCOSUR Secretariat for the Implementation of the MERCOSUR Fund for Structural Convergence (FOCEM)

1,250.000 €. EC Contribution: 1,000.000; MERCOCUR Contribution 250,000 € (25 % in cash)

Project Approach - Joint Management

33130 Sector Regional Trade Agreements

2. RATIONALE

2.1. Sector context

The priorities in EU strategy for Latin America include cooperation in the field of Regional Integration supporting the institutions of the regional and sub-regional blocks emphasizing the role of the civil society in the integration process. The European Commission Development Policy as well as the 2007-2013 programming for Latin America consider institutional capacity building and the respect of the rule of law, among others, a priority for the EC Cooperation.

This project, formulated in the framework of the Priority 1 (Support to the MERCOSUR institutionahzation) of the Regional Strategy Paper, will aim at building institutional capacity and strengthening the role of the MERCOSUR Secretariat at the moment when the Secretariat assumes new responsibilities such as the implementation of the Fund for Structural Convergence (FOCEM). Therefore, the project will focus on training and assisting technically the Secretariat's staff as well as the officers from MERCOSUR Member Countries involved in the implementation of the FOCEM.

Current Political and Institutional Situation in MERCOSUR

MERCOSUR is currently facing internal and external challenges. Internally, the commercial block needs to improve the application of the Common External Tariff in order to complete the Customs Union and advanced in the construction of the Common Market surpassing the impasse and the intraregional trade stagnation suffered at the end of the 1990s. Intra regional relations call for new steps into the integration process by elaborating regional policies in the areas of environment, social cohesion and education.

MERCOSUR is facing the dilemma of widening versus deepening in the integration process. MERCOSUR enlargement to include Venezuela is still in progress, but it has already changed the profile of its integration approach from commercial to political. In order to face all these challenges, MERCOSUR will need solid, independent and proactive institutions to make common benefits prevail above the national interests.

MERCOSUR Secretariat Evolution

The Secretariat was initially created as an administrative body responsible for organizing meetings, and filing and keeping track of related documents. The Secretariat has progressively upgraded its role assuming new tasks and responsibilities, and evolvmg from an administrative to a technical body. The EC Cooperation has always support the Secretariat

transition and the adaptation of its technical and administrative structures. In fact, this will be the third EC project supporting the MERCOSUR Secretariat.

The Common Market Council (CMC) decision CMC/DEC №07/07 reinforced, restructured and assigned new tasks and responsibilities to the Secretariat. The Decision annex details the new organic structure that will be divided in four units: (i) Administration Unit; (ii) Operational Support Unit; (iii) Technical Advisory Unit; and, (iv) Regulation, Documentation and Dissemination Unit. According to Decision CMC/DEC №24/05 regulating the MERCOSUR Fund for Structural Convergence (FOCEM), the Secretariat will also manage the FOCEM Technical Unit (FTU).

The MERCOSUR Fund for Structural Convergence

Decision CMC/DEC №18/05 created this Fund with the aim of promoting structural convergence; enhancing competitiveness; promoting social cohesion, particularly for small Member Countries; and, supporting institutions in order to strengthen the integration process.

The goal of the FOCEM is to obtain a $100 million yearly fund within by 2010. Member Countries will progressively increase their contributions (50% for the 1st year, 75% the 2nd, and 100% the 3rd) until reaching US$100 Million per year. FOCEM becomes a relevant development in the MERCOSUR integration process, because is the first regional cooperation instrument by which the big Member Countries (Argentina and Brazil) make a net transfer of resources to small Member Counties (Uruguay and Paraguay) taking into account regional asymmetries.

This is also the first regional instrument that does not required equivalent contributions from all four Member Countries; on the contrary, it takes into once again the asymmetries among Members, which the smaller countries have been asking for long. The contributions each member will provide will be the following: Argentina will contribute with 27% of the Fund, Brazil will give 70%, Uruguay's contribution will amount 2% of the FOCEM total; and finally, Paraguay will contribute with 1% of the fund.

The small countries will also be positively favoured in the redistribution of funds: Paraguay projects will benefit from 48% of the funds, Uruguay 32%, and Argentina and Brazil will get 10% each. Furthermore, the first projects to be selected will have a strong social component; therefore, MERCSOUR citizens should be able to benefit from FOCEM from its inception. Currently, three out of the four projects are in the social sector, the fourth has to do with foot and mouth disease, very relevant for all four economies relying heavily in agricultural products.

Common Market Council decision CMC/DEC №24/05 regulates the use and management of FOCEM fonds. The same decision established the use of the funds, the eligibility criteria, etc. However, there are not yet clear rules and regulation for the management of the funds, the monitoring and control of the projects; and the assessment and follow up of the actions. The Secretariat shall be the technical and managerial authority in charge of articulating this mechanism.

Currently, the Secretariat is facing the following challenges:

• MERCOSUR Secretariat's lack of institutional capacity: The Secretariat does not possess the necessary human, technical and financial resources to carry out all the tasks

• Secretariat's institutional weakness: The Secretariat does not have sufficient human and financial resources to carry out all the tasks entrusted and bear all the costs associated. The Common Market Group has already decided to furnish the Secretariat with more personnel and financial resources for the management of the FOCEM.

• Lack of technical skills for the management of FOCEM: Incoming staff as well as the National FOCEM Technical Units will need training and information in order to carry out their jobs related to the implementation of FOCEM.

• Need to regulate the FOCEM Convergence Fund: Some provisions for the management of FOCEM have been already laid down; the Secretariat and the Common Market Group need to establish clear rules and regulation governing the FOCEM.

• Lack of public awareness of FOCEM participation mechanisms: In order to ensure a critical mass of participants and beneficiaries, it is necessary to improve communication by systematizing dissemination mechanisms of call for proposals and results.

This projects aims at tackling the shortcomings and weaknesses mentioned above by providing the Secretariat with the management tools and know-how necessary to confront the new tasks and responsibilities acquired, including training and coordination of the National FOCEM Technical Units, preparation of rules of procedure and performance measuring mechanisms, and the direction and coordination of other tasks oriented to the realization of a common market.

2.2. Lessons learnt

Based on previous experiences and lessons learnt from the 2002-2006 programming, the new programming will focusing on accompanying policies or initiatives in place. This way, the projects: a) will have a greater impact, b) will improve coordination, coherence and complementarity with other donors, particularly with EU Member States.

Value added of the EU action

The MERCOSUR Technical Cooperation Committee representing the counterpart and the Secretariat as the beneficiary have acknowledge the specific value added of the European experience implementing the structural and cohesion funds. The beneficiaries are trying to extract as much as possible from the EU experience and know-how managing a regional fund, and elaborating all applicable operating mechanism and rales and procedures.

2.3. Complementary actions

As part of our cooperation, these are the main complementary actions:

• The project "Support to the establishment of the MERCOSUR Parliament" from the past 2002-2006 EC programming will be active until 2008. Both, the Secretariat and the Parliament want to improve and upgrade the role of the MERCOSUR institutions in the integration process.

• The identification and formulation of the "Support to the MERCOSUR Permanent Court of Review" is being carried out simultaneously to the formulation of the Secretariat project. The Secretariat has a crucial role in the MERCOSUR dispute settlement system.

These are some of the actions carried out buy other international donors:

• The InterAmerican Development Bank (IADB) has granted funds for technical assistance and other activities to the following MERCOSUR institutions: MERCOSUR Permanent Representatives Committee (US$ 100,000), MERCOSUR Parliament (US$ 100,000), MERCOSUR Trade Commission (US$ 150,000) and MERCOSUR Secretariat (US$ 500,000).

• The German Cooperation Agency (GTZ) is funding a project called "Competitiveness and the Environment" which is supposed to finish in 2007. The project is directed to SMEs in MERCOSUR.

• The Italian cooperation is carrying out a high-level training with officers from MERCOSUR Member Countries in areas related to regional integration.

• German Foundations, Konrad Adenauer and Friedrich Ebert have organized several seminars and workshops in related areas; and, they have published numerous papers and documents related to MERCOSUR integration process.

2.4. Donor coordination

Donor coordination is done through regular meetings between the EC Delegation and other international donors. With regards to priority 1 of the MERCOSUR Regional Strategy, (Support to the MERCOSUR Institutions) the all international donors have been consulted. There has been close communication and coordination with the IADB, as the second main donor after the EC, in particular with the IADB representation in Montevideo and IADB HQ's trade economist in charge of MERCOSUR.

3. DESCRIPTION

3.1. Objectives

General objective:

To improve MERCOSUR'S integration process and regional cohesion by reinforcing the role of the MERCOSUR Secretariat, its institutional capacity, and organisational structure. Specific objective:

To strengthen the Secretariat's operational and managerial capabilities in order to transform it in an effective executive body capable of handling new tasks and responsibilities, in particular, the MERCOSUR Fund for Structural Convergence (FOCEM).

3.2. Expected results and main activities

Action Strategy:

As a result of the consultation and identification phase and taking into account the inputs of the MERCOSUR Technical Cooperation Committee during the negotiation prior to the elaboration of the Regional Strategy Paper, these are the results expected from this action:

Results:

1. Enhanced institutional capacity of the MERCOSUR Secretariat and developed managerial and organizational capabilities to implement MERCOSUR Fund of Structural Convergence.

2. Developed and implemented Regional Convergence Strategy with relevant objectives and clear rules and regulations governing the use of structural funds.

3. Improved communication and coordination with other MERCOSUR institutions and Country Sections.

Main Activities: 1. Training:

• Training for officers and specialist from the Secretariat and the Common Market group in information management, data collection and analysis, and dissemination of results.

• Training of specialist and officers of the FOCEM National Technical Units in areas related to regional integration and management of cohesion and structural funds.

2. Technical Assistance:

• Technical assistance targeted to the exchange of information with the EC in relation with the management of Structural and Cohesion Funds, including sharing best practices and successful projects.

• Activities related to the transfer of experiences drafting rules and regulations governing the FOCEM, managing the fund, and monitoring and evaluation of projects.

3. Best Practices Exchange:

• Exchange of experiences in areas such as: viability studies, project selection criteria and assessment, performance monitoring, programme appraisal and results monitoring.

• Exchange of experiences between the institutions and MERCSOUR institutions in charge of managing FOCEM and units in charge of the structural funds in the EU.

4. Organizacional Support:

• Support the creation and operation of the National FOCEM Technical Units.

• Design communication, coordination and working channels between the Technical Units and the Secretariat.

3.3. Stakeholders

Beneficiary: The project beneficiary is the Common Market Group (GMC) representing the four member states of MERCOSUR (Argentina, Brazil, Paraguay and Uruguay). In application of article 166.1(a) of the Financial Regulation, the GMC will be appointed by the Common Market Council (CMC) of MERCOSUR as responsible for the commitments assumed before the European Commission.

Executing Entity: The four countries agreed to entrust the implementation of the project to the MERCOSUR Secretariat by signing a delegation agreement.

Target groups: MERCOSUR Secretariat, National FOCEM Technical Units, members of the Common Market Group (CMG) working groups.

Other Beneficiaries: Member Countries, Associated Countries, other MERCOSUR institutions, FOCEM beneficiaries, MERCOSUR citizens.

3.4. Risks and assumptions

The following are some of the Risks and Assumptions withdrawn from previous experiences:

Assumptions:

• There is enough common political will to make progress in the integration process and carry out the project. Most MERCOSUR decisions are approved at GMC level, which is highly intergovernmental; therefore, political disputes often impact the regional decision making process.

• Member Countries want to strengthen the Secretariat institutional capacity in order to make it capable of undertaking all new tasks assigned to it. Fro the Secretariat to be able to carry out its responsibilities. Member countries will have to provide the Secretariat with enough autonomy and resources.

Risks: • Lack of MERCOSUR Member Countries' financial and human resources contribution to

the project and the Secretariat in general.

• Political instabihty in the region, in particular the outbreak of a political and social conflict such as the paper mills dispute between Argentina and Uruguay or other potentially damaging events related with the commercial association of with other countries.

• Not meeting the FOCEM objectives or lacking of financial disbursements and human resources for the implementation of the FOCEM.

The formulation stage of the project will not be completed until the following conditionalitv is met by the counterpart: • The beneficiary confirms and commits its contribution (in cash and in kind) to the Project.

• The beneficiary appoints a management team in charge of executing the project.

3.5. Crosscutting Issues Developmenťcrosscutting objectives

Poverty reduction Good Governance

Democracy, Human rights Integration in world economy

Environment Gender

Conflict resolution/Peace building

Directly targeted objective YES YES NO YES NO NO NO

Significant indirect impact

YES

YES NO YES

Poverty Reduction: The implementation of FOCEM will have an impact on poverty reductions since it is designed to favour in particular the social sectors of the small economies. So far, three out of the four projects approved are implemented in social areas. Governance: Capacity building and institutional strengthening of the Secretariat will positively impact MERCOSUR governance. The Secretariat is probably the most active MERCOSUR institution; therefore, this project will have a direct impact in the integration process and governance in general. Integration in World Economy: Global integration, in particular for the smaller Member Countries, depends on the well functioning of the customs union and common market provisions. The Secretariat focuses a great deal of its time to identify obstacles in the integration process and find ways to remove them.

4. IMPLEMENTATION ISSUES

4.1. Implementation method The implementation method applicable in this project is joint management through the signature of an agreement with an international organisation. The International Technical Assistance is to be managed directly by the EC together with the audit and monitoring missions. In general terms, the project management unit will be the contracting authority for procurement actions. The Commission controls ex ante the

contracting procedures for procurement contracts >50.000 euro and ex post for procurement contracts <50.000 euro.

Through the programme estimates, payments are decentralised for operating costs and contracts up to the following ceilings:

Works

<€ 300.000

Supplies

<€ 150.000

Services

<€ 200.000

Grants

<e 100.000

(a) The follow-up of their implementation of the project will be the responsibility of a single MERCOSUR institution still to be identified.

(b) Disbursements will be made on the basis of progress towards achieving the targets and specific/measurable results set out for the project.

(c) The counterpart funds should be made available by the MERCOSUR institution mentioned under (a) who will take on the responsibility for the implementation of the project.

4.2. Procurement and grant award procedures [/programme estimates]

All contracts implementing the action must be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission for the implementation of external operations, in force at the time of the launch of the procedure in question.

The essential selection and award criteria for the award of grants are laid down in the Practical Guide to contract procedures for EC external actions. The maximum possible rate of co-financing for grants is 75%.

Project Duration; 42 months (36 months of execution + 6 months for closure). The beginning of the execution period will be determined by the date of the last signature in the Financing Agreement.

1. Services 1.1 International Technical Assistance 150.000 15 150.000 12 1.2 Local Technical Assistance 150.000 15 150.000 12 1.3 Monitoring, Evaluation and Audit 25.000 2,5 25.000

1.4 Studies 120.000 12 20.000 140.000 11,2 1.5 Training 210.000 21 10.000 220.000 17,6 1.6 Exchange of Experiences 130.000 13 10.000 140.000 11,2 2. Supplies 50.000 0 50.000 3. Information and Visibility 100.000 10 10.000 110.000 8,8 4. Operating Cost 0 200000 80 200.000 16 5. Unforeseen 65.000 6,5 65.000 5,2 9. Total 1.000.000 100 250.000 100 1.250.000 100

4.3. Performance monitoring

Besides EC regular monitoring mechanisms, the project shall determine its own mtemal control mechanisms for regular assessments. These mechanisms will be indicated in the Programme Estimates.

The EC may carry out regular external monitoring missions within 6 months after the beginning of the project and 6 months prior to its closure. The monitoring reports will be sent to the Project Management Entity, which will have to take the recommendations into account.

4.4. Evaluation and audit

An external evaluation has been planned halfway though the implementation project. Three local audits are foreseen, one at the end of every year of execution. The cost of these audits and evaluation will be met by the beneficiary.

4.5. Communication and visibility

The project executing entity will elaborate a communication and visibiHty strategy for the implementation period. This plan will be presented to the EC Delegation as part of the Programme Estimates and will have the approval of both, the beneficiary and the EC Delegation. The strategy will focus on: (i) the integration mechanism FOCEM and approved projects; (ii) Secretariat's activities on relevant subjects such as the implementation of the Common External Tariffor Member Countries transposition of MERCOSUR law

ANNEX II

ACTION FICHE FOR MERCOSUR

1. IDENTIFICATION

Title

Total cost


DAC-code

Support to the MERCOSUR Permanent Court of Review

1,250.000 €. Contribution EC: 1,000.000; MERCOSUR Contribution 250,000 € (25 % in cash)

Project Approach - Joint Management

33130 Sector Regionai Trade Agreements

2. RATIONALE

2.1. Sector context

The European Union strategy for Latin America includes cooperation in fundamental sectors such as regional integration, supporting the institutions of the regional and sub-regional blocks emphasizing the role of the civil society. As defined in the European Commission program for Latin America 2007-2013 and its development policy, supporting and strengthening institutional capacity and the respect for the rule of law is one of the priorities among other sectors.

This project falls within the framework of the Regional Strategy Document under priority 1 (support to the MERCOSUR institutionalization) fortifying the judicial and legal institutional structure. The official establishment of the MERCOSUR Permanent Court of Review in Asuncion 13 August 2004 was the first landmark towards this direction. This project aims at providing technical assistance to the Court during its configuration, organization and allocation of tasks in order to optimize its operational capacities as needed to make it fully functional.

The Regional Dispute Settlement System

The main objective of the system is the resolution of disputes that arise between Member States with regards to the interpretation, application or non-compliance with the legal sources of MERCOSUR, within the framework of regional integration.

The MERCOSUR Regional Dispute Resolution System was initially created by the Treaty of Asuncion (1991), and later implemented by the Protocol of Brasilia (1993). The system further evolved with the Olivos Protocol (OP), signed on 18 February 2002 and in force since 1 January 2004. One of the main innovations of the OP was the creation of the MERCOSUR Permanent Court of Review which is set it up as an independent institution in conjunction with the MERCOSUR Ad Hoc Tribunals (MAHT). MERCOSUR Permanent Court of Review

The Court is composed of 5 judges: One is designated by each of the MERCOSUR Member States for a two-year period and the fifth (the President), by unanimous consent of the Member States for a three-year term. When a dispute only involves two countries, the Court is limited to three judges, with one judge from each country to the dispute and the third, a non-national, is chosen to be the President by the Director of the Administrative Secretariat in Montevideo through a lottery.

Broadly speaking, the role of the Court is twofold: on the one hand it acts as the court of appeal or review mechanism of MERCOSUR legislation application, by confirming, modifying or revoking the legal basis of decisions of an ad hoc arbitral tribunal; and, on the other hand it has the authority to mediate disputes between Member Countries, when these are in agreement to initiate proceedings directly with the Court.

The Olivos Protocol (OP) estabUshing the Court provides it with the competence to act in the following instances:

• Controversies between Member States (MAHT - Court)

• Request for appeal (only the Court)

• Exceptional and emergencies measures (only the Court)

• Advisory opinions (only the Court).

While the main criticism directed at the functioning of the ad hoc Courts has been that they do not allow for the construction of true community jurisprudence, the creation of the Permanent Court of Review allows for advance towards the unification of the interpretation of the regulations of the bloc's norms. The decisions of the Court are final and cannot be appealed. The introduction of this appeal and review process is a substantial step towards the establishment of a juridical body that will offer a uniformity of jurisprudence and a structure of precedent.

Institutionally, the Court counts with the support of a Technical Secretariat as established by the Resolution GMC/RES№66/05. The Secretariat is in charge of assisting the Court in carrying out its tasks as well as supporting the activities of the MERCOSUR Center for the Promotion of the Rule of Law created by decision CMC/DEC №24/04 with the purpose of organizing and implementing actions related to academic research, training and dissemination of results on legislative matters.

The Technical Secretariat's mission is to (i) compile, in an updated form, all documentation related to the controversies (ii) prepare and provide the relevant documentation on MERCOSUR legislation to the Court and its corresponding parties (iii) officially archive all controversies and rulings.

It is also important to mention the links created among the Supreme Courts of the Member Countries. In the 2nd Meeting of the Members Countries Supreme Courts, 30 November 2004, it was reinforced that "national legislative powers are essential for the institutional structure of MERCOSUR". In that same occasion, the Charter of Brasilia was signed which decided to institutionalize the MERCOSUR Supreme Courts of Justice Forum in charge of handling legal and legislative matters.

The present situation in the integration process shows a particular need for an institutional reform in the area of dispute settlement. A clear political sign in this direction is that the current MERCOSUR Presidency (Paraguay) has placed the Court institutional development as a priority in its agenda.

The Permanent Court is in an embryonic phase. Its performance has been regulated and the Common Market Council has legally created the operational support units for its well functioning. However, these legal provisions are far from being implemented. The Court lacks organic structure and resources necessary to be able to operate and carry out its duties. The EC technical cooperation will help the Court developing its institutional capacity providing the institution with the necessary mechanisms to maximize its role and foster close coordination and cooperation with national legislative bodies.

Due to the Court's current incipient institutional structure, the following weaknesses are easily identifiable:

• Lack of institutional capacity and legal infrastructure: Two year after its legal creation, the Court does not have its own autonomous budget relying on the Paraguayan Ministry of Foreign Affairs. This seriously compromises the independency of the legal body.

• The inoperative Technical Secretariat (TS): The TS is merely a basic administrative structure with only 7 staff members.

• The MERCOSUR Centre for the Promotion of the Rule of Law (MCPRD is not in place: the MCPRL is only a legal provision, it has not been implemented.

• Lack of awareness of the MERCOSUR legislation and role of a regional Court.

This project aims at tackling the above mentioned weaknesses by creating awareness about the relevance and role of the regional Court, training staff and other key actors, and creating institutional and operational capacity for the Court to start fulfilling its tasks.

2.2. Lessons learnt

The EC supported the preliminary actions before the creation of a Permanent Court. The project "Improvement of the MERCOSUR Dispute Settlement System" was dehvered in the form of a grant (€186.841) with the objective of contributing to the institutional development of such mechanism. While the project was evaluated positively by the beneficiaries, it caused some confusion since it was managed by a European research centre with no clear links to the MERCOSUR institutions. In order to improve ownership of the project and build institutional capacity, this action will be managed by the Technical Secretariat of the Permanent Court.

Value added of EC cooperation project:

The European experience shows that the European Court of Justice was since its inception the cornerstone of the integration process in particular in the realization of the common market. MERCOSUR has gone on a different path, focusing more on the intergovernmental nature of the block and designing an arbitrational legal body to deal with disputes in the framework of the regional process. Now that the ad hoc dispute settlement system is to evolve into a permanent body, the experience the European Union went through becomes very relevant. The EU process becomes a reference point, since it is the only supranational entity that has managed to build a successful judicial system with networks and mechanisms that ensure high quahty legislation and legal certainty.


The following are several EC projects that will have certain synergies with this project:

a.The project "MERCOSUR Social Dimension" worked with MERCOSUR Social and Economic Committee and Unions. Several workshops where carried out with regards to "MERCOSUR legal and legislative certainty".

b.The identification and formulation of the project "Support to the MERCOSUR Secretariat" is being carried out simultaneously to the formulation of this project. The Secretariat has a crucial role in the MERCOSUR dispute settlement system what is this crucial role, therefore, there will be actions involving relevant matters for both projects.

These are the more notorious actions related with this project:

a.The InterAmerican Development Bank (IADB) has granted funds for technical assistance and other activities to the following MERCOSUR institutions: the MERCOSUR Permanent Representatives Committee (US$ 100,000), the MERCOSUR Parliament (US$

100,000), the MERCOSUR Trade Commission (US$ 150,000) and the MERCOSUR Secretariat (US$ 500,000).

b.The French Cooperation is trying to institutionalize yearly seminars related to the Dispute Settlement Mechanisms in MERCOSUR.

c.The Spanish Agency, AECI, is financing the construction works in the building "Villa Rosalba", the Court's siege.

d. German foundations, Konrad Adenauer and Friedrich Ebert have organized several seminars and workshops in related areas. They also publish numerous papers and documents related to MERCOSUR integration process.


Donor coordination is done through regular meetings between the EC Delegation and other international donors. With regards to priority 1 of the MERCOSUR Regional Strategy, (Support to the MERCOSUR Institutions) the all international donors have been consulted. There has been close communication and coordination with the LADB, as the second main donor after the EC, in particular with the IADB representation in Montevideo and IADB HQ's trade economist in charge of MERCOSUR.

3. DESCRIPTION

3.1. Objectives

General Objective:

To strengthen the legal framework and legal certainty of MERCOSUR in order to consoUdate the regional integration process.

Specific Objective:

To create institutional and operational capacity for the MERCOSUR Permanent Court of Review in order to enhance its performance and promote a uniform and generalised implementation of MERCOSUR legislation.


Action Strategy:

As a result of the identification and consultation phase and taking into account the inputs of the MERCOSUR Technical Cooperation Committee during the negotiations prior to the elaboration of the Regional Strategy paper, these are the results expected from this action:

Results:

• Strengthened Court's legislative and institutional capacity with appropriate technological and legal infrastructure in place as well as human and financial resources.

• Increased legal operators' awareness of MERCOSUR legislation, and use of the advisory opinion mechanism and the institutional structure for dispute settlement.

• Established close links between the Court and academia and research centres to promote the exchange ofinformation and dissemination of legislative acts.

Main Activities:

• Training for key legislative/judicial actors, from decision makers and officers to judges and lawyers.

• Set up a technological platform including a legislative data base, and an information exchange centre.

• Set up a specialized library with technical and relevant legislative and judicial infrastructure

• Rethink and restructure the MERCOSUR Centre for the Promotion of the Rule of Law and support operationally its activities.

• Develop and create new institutional networks in regional community law including Supreme Courts, National courts, MERCOSUR institutions, academia etc.

3.3. Stakeholders

Beneficiary: The project beneficiary is the Common Market Group (GMC) representing the four member states of MERCOSUR (Argentina, Brazil, Paraguay and Uruguay). In application of article 166.1(a) of the Financial Regulation, the GMC will be appointed by the Common Market Council (CMC) of MERCOSUR as responsible for the commitments assumed before the European Commission.

Executing Entity: The four Member countries agree to entrust the implementation of the project to the Court Secretariat by signing a delegation agreement.

Target Groups: The MERCOSUR Permanent Court of Review and its Secretariat, the MERCOSUR Secretariat, Supreme Courts of Justice and the Permanent Forum of MERCOSUR Supreme Courts, National courts..

Other Beneficiaries: Member Countries, Associated countries, other MERCOSUR institutions, private sector, academia, and MERCOSUR citizens.


The following are some of the Risks and Assumptions withdrawn from previous experiences:

Assumptions:

• There is political will to make progress in the integration process and carry out the project. Most MERCOSUR decisions are approved at CMG level, which is highly intergovernmental; therefore, political disputes often impact the regional decision making process.

• The Member Countries want to transcend from the Ad hoc arbitration model to a Court of Justice with its jurisprudence.

Risks:

• Lack of MERCOSUR Member Countries' financial and human resources contribution to the project and the Court in general.

Political instability in the regional, in particular the outbreak of a political and social conflict such as the paper mills dispute between Argentina and Uruguay or other potentially damaging events related to the commercial association with other countries.

• Lack of transposition of the rulings of the Court into the national legislative systems. Although the legal acts undertaken by MERCOSUR decision-making organs are mandatory, they are neither directly applicable, nor have direct effect. In practice, this means that Member States undertake the commitment to internalise the acts, a process that has historically been slow, uneven and highly vulnerable to the goodwill and legal, political and administrative obstacles faced by each government, subsequently leading to delays in enforcement.

The financing agreement of the project will not be signed until the following conditionalites are met:

• Among other responsibilities, the Secretary will: • Draft the Court's budget and make the necessary arrangements to conform the executing

unit. • Design and approve a working programme for the first two years of operations.

3.5. Crosscutting Issues

Development/crosscutting objectives Poverty reduction Good Governance

Democracy, Human rights Integration in world economy

Environment Gender

Conflict resolution/Peace building

Directly targeted objective NO YES YES YES NO NO YES

Significant indirect impact NO

YES NO

Governance: The project will have a direct impact on governance. The Court will be in charge of defending the good implementation and application of the MERCOSUR rules. It will give the region improved legal certainty in matters related to MERCOSUR trade issues; and it will serve the citizens of MERCOSUR.

Democracy and Human Rights: The well fimctioning of the Court will enhance legal certainty and transparency of the implementation of MERCOSUR law in democratic systems, which directly impacts all citizens' rights./·

Integration in World Economy: The integration of MERCOSUR in the global economy, in particular for Paraguay and Uruguay, the smaller countries, depends to a great extent on the well functioning of the commercial block. The cornerstone of a customs union and even more so of a common market is legal and judicial certainty in the application of the MERCOSUR legislation.

Conflict Resolution: This is one of the Court's main competences obtained through the Olivos Protocol. A well fimctioning Regional Court will directly impact the dispute settlement and conflict resolution systems.


4.1. Implementation method

The implementation method applicable in this project is joint management through the signature of an agreement with an international organisation.

The bitemational Technical Assistance is to be managed directly by the EC together with the audit and monitoring missions. In general terms, the project management unit will be the

contracting authority for procurement actions. The Commission controls ex ante the contracting procedures for procurement contracts >50.000 euro and ex post for procurement contracts <50.000 euro.


Works

<€ 300.000

Supplies

<€ 150.000

Services

<€ 200.000

Grants

<e loo.ooo

(a) The follow-up of their implementation of the project will be the responsibility of a single MERCOSUR institution still to be identified.

(b) Disbursements will be made on the basis of progress towards achieving the targets and specific/measurable results set out for the project.

(c) The counterpart funds should be made available by the MERCOSUR institution mentioned under (a) who will take on the responsibility for the implementation of the project.

4.2. Procurement and grant award procedures


The essential selection and award criteria for the award of grants are laid down in the Practical Guide to contract procedures for EC external actions. The maximum possible rate of co-financing for grants is 75%.

4.3. Budget and calendar

Project Duration; 42 months (36 months of execution + 6 months for closure). The beginning of the execution period will be determined by the date of the last signature in the Financing Agreement. Proleet Estimated Budget

1. Services 1.1 Intemational Technical Assistance

1.2 Local Technical Assistance 1.3 Monitoring, Evaluation y Audit

1.4 Studies

1.5 Training

1.6 Exchange of Experiences

2. Supplies 3. Communication & Visibility 4. Operating Costs 5. Unforeseen 6. TOTAL

620.000

100.000

150.000

20.000

120.000

150.000

80.000

250.000 80.000

0 50.000

1.000.000

IIB 62

10

15

2 12

15

8 25

8 0 5

100

Beneficiary 50.000

50.000

200000

250.000

Bill 20

0

0

0

0

20

0

0

0

80 0

100

-:я<ш"Ш:мМ 670.000

100.000

150.000

20.000

120.000

200.000

80.000

250.000

80.000

200.000

50.000 1.250.000

53,6

8

12

1,6

9,6

16

6,4

20

M 16 4

100


Besides EC regular monitoring missions, the project shall determine its own mtemal control mechanism for regular assessments. These mechanisms will be mdicated in the Programme Estimates.


An external evaluation has been planned halfway though the implementation project. Three local audits are foreseen, one at the end of every year of execution. The cost of these audits and evaluation will be met by the beneficiary.


The project executmg entity will elaborate a commumcation and visibility strategy for the implementation period. This plan will be presented to the EC Delegation as part of the Programme Estimates and will have the approval of both, the beneficiary and the EC Delegation. Since awareness and communication is key to this project the visibility plan will be considered a particularly relevant document.

ANNEX III

A C T I O N FICHE FOR MERCOSUR

IDENTIFICATION

Title

Total cost

CRIS Nr.


DAC-code

Support for the MERCOSUR Mobility Programme in Higher Education (Mobility Programme) 4.000.000 € EC Contribution: 3.0OÓ.0O0€ (75%) Beneficiary Contribution: 1.000.000 € (25%)

DCI-ALA/2006/18586

Project approach -decentralised

11420 Sector Support to Civil Society of MERCOSUR

2. RATIONALE

2.1. Sector context

The policy for the MERCOSUR educational sector (SEM) was established in the Protocol of Intent signed by the Ministers of Education of the 4 member states in 1991. They agreed on the development of educational programmes and actions in three main areas: a) creation of a social awareness in favour of the integration process; b) training of human resources contributing to the economic development; c) integration of the educational systems.

In order to meet those objectives, the SEM operates according to strategic plans (SP). The SP 2001-2005 and 2006-2010 for the higher education sector1, established goals and actions focusing on the following strategic areas: Accreditation, Mobility and biter-institutional Cooperation. The proposed EC support action will contribute to the last two strategic areas.

The project aims to contribute to the development of a feelmg of regional belonging and of regional citizenship awareness in MERCOSUR'S civil society. The lack of such an awareness is a constraint to the consolidation of the regional integration process.

2.2. Lessons learnt

The experience acquired by the European Union (EU) in mobility programmes such as ERASMUS, demonstrated, -on one hand- its relevance in promoting the intemationaUsation of institutions of higher education and the construction of the European dimension of higher education2, and, on the other hand, it demonstrated that the experience of studying in another country allows young people to "live the culture of integration", while contributing to the creation of an European awareness and identity.

1 SP 2001-2005 can be found at http://sicmercosul .mec. gov.br/asD/P1anos/planoestra.asp and the. SP 2006-2010 at http://www.mec.gub.uv/educacion/mercosur/plandelsem.pdf. 2 "External evaluation of Erasmus, institutional and national impact", Price Waterhouse Coopers, Novembre 2004.

http://sicmercosul

http://gov.br/asD/P1anos/planoestra.asp

http://www.mec.gub.uv/educacion/mercosur/plandelsem.pdf

From the European experience and also from some specific experiences carried out by south american actors (i.e. MARCA,3 ESCALA4 or the Student Mobility Programme of CRISCOS5), lessons have been taken mto account for the elaboration of the action. Some of those relevant lessons are: o Participation must be open to all institutions (private as well as public universities).

o The participating universities must be recognised by their national authorities and certified as qualifying to take part in a student mobility programme.

o The mobility programme to be both sustainable and capable of growth requires the participation of various key actors (promoters and managers, institutional and academic coordinators, teachers). To ensure the success of such a programme it is necessary to train those actors in the objectives and procedures of the programme.

o The recognition of the studies undertaken by the students during the exchange period must be guaranteed.

o Clearly designed and easily applicable tools and proceedings are required for the implementation of the programme.

2.3. Complementary actions Several European Union Member States' have scholarship programmes, but most of them are aimed at financing postgraduate studies in EU countries, not in the region.

The present proposal does not overlay with other programmes such as ALFA, ALBAN, or ERASMUS MUNDUS, since these programmes do not promote the mobility of students between MERCOSUR member states.

The action will allow MERCOSUR to consohdate its mobility strategy, through the start up of a mobility programme for undergraduate students of non-accredited academic careers. This will complement the MERCOSUR MARCA Programme (mobility programme for accredited careers, that in 2006 mobilised for the first time 57 students). MERCOSUR has requested that MARCA is not included in the present action, the reason being that MARCA follows MERCOSUR proceedings that may be incompatible with EU proceedings in a unified action.


At this time there are no other similar projects financed by other donors. 3. DESCRIPTION

The main problem the project aims to contribute to resolve is that of the low level of feeling of regional belonging and of regional citizenship awareness in MERCOSUR'S civil society. One possible strategy to mitigate this problem is to organise high impact information and sensitising campaigns. However acting from the education sector will allow a more lasting effect. The strategy of the action is to support MERCOSUR in consolidating its "mobility strategy", through the strengthening of the local skills to promote and manage mobility programmes, the expansion of the actual MERCOSUR' mobiUty programme (MARCA) through the start up of the mobility programme for students of non accredited carreers, the

MARCA: Movilidad Académica Regional de Carreras Acreditadas, is the official Mercosur mobility program for students and teachers of accredited academic programs (there are 18 academic programs accredited in Agronomy, 27 in Engineering and 7 in Medicine).

The ESCALA programme is promoted by the non-for-profit Asociación de Universidades del Grupo Montevideo (AUGM) made up of 18 public universities from the 4 MERCOSUR countries plus Bolivia and Chile..

The Council of University Chancellors for the Integration of the Center-Western Subregion of South America (CRISCOS) brings together 22 public and private universities of Argentina, Bolivia, Chile, Paraguay and Peru.

implementation of an awareness campaign about regional integration benefits and the fostering of cooperation among MERCOSUR universities to consolidate the common educational space.

3.1. Objectives

General objective: support the construction of a MERCOSUR citizenship with a feeling of belonging to the region within the members of the university community of the 4 countries.

Specific objective: contribute to the consolidation and expansion of the Student Mobility Programme for MERCOSUR undergraduates.


Result 1: Ministries and Universities have the skills to manage intra-regional university cooperation programmes and mobility programmes in particular.

Result 2: The Mobility Programme for university undergraduates of the 4 member countries is functioning, respecting gender and social inclusion criteria. It disposes of manuals, norms and procedures and a communication and visibility strategy.

Result 3: An information and sensitising campaign on regional integration aimed at the university community has been developed and implemented.

Result 4: Networks of academic exchange between universities of the 4 countries have been created, through which common projects are developed within the frame of MERCOSUR'S Strategic Plan for the Education Sector.

The main activities associated with each of the results are:

Associated to result 1: implementation of regional training actions adressed to staff working for international co-operation offices in Ministries of Education and universities, on the following subjects: 1) regional integration processes and MERCOSUR, 2) the education sector and its role in the integrating process, 3) design and management of projects and cooperation programmes, 4) Student Mobility Programme: objectives, characteristics and procedures and 5) criteria for the recognition of studies. Besides two regional evaluation workshops will be organised to assess the Mobility Programme experience and propose corrective measures. It is foreseen the participation of 1200 people.

Associated with result 2: Involves, amongst others, visibility actions, the selection process and follow-up of students. It is hoped that at the end of the project about 180 students will have benefited from a mobility experience, having taken a course semester in an institution of higher education within MERCOSUR.

Associated with result 3: Implementation of an information and sensitisation campaign about regional integration benefits, which will contribute to the production of a feeling of belonging to the region in members of the university community (production and distribution of printed materials, conferences, cultural events, web page design, and the execution of an opinion poll to measure the sentiment of regional belonging in the university community at the beginning and at the end of the project).

Associated with result 4: Carrying out of studies and the execution of projects by networks of universities complementary to the implementation of the Mobility Programme with the perspective of its growth and sustainability, in the following subject areas: a) articulation of academic programmes and educational planning in order to achieve complementarity, b) design of pilot courses to take place during holidays ("summer courses") for undergraduate students and given by teachers from other member countries, c) trainmg systems for the teaching of official languages of MERCOSUR as a second language, d) academic and institutional management. No scientific research project will be financed. The networks will be comprised of a minimum of 4 universities (1 per country) and a maximum of 10 universities from the region, where at least one of them must have participated in the project's training activities, at least 25% of them will have no previous experience in international cooperation projects and at least 25% of the universities will be from regions of lower relative development.

3.3. Stakeholders

The project beneficiaries are the four member states of MERCOSUR (Argentina, Brazil, Paraguay and Uruguay) and are responsible for the commitments assumed before the European Commission.

The four countries have agreed to delegate the execution of the project to Uruguay, represented by the Ministry of Education and Culture (MEC). In tum, MEC entrusts the execution of the project to the University of the Republic (UDELAR, a public institution),6

by way of a signed agreement of delegation. UDELAR will be the responsible authority in charge of preparing the operative plans, contracts, payments, opening the project's bank account, presenting the reports and contracting local audits. UDELAR will act under the control of the ad hoc group of the Regional Coordination Commission for Higher Education of MERCOSUR. The headquarters of the project will be in Montevideo.

The other stakeholders in the execution of the project, and direct beneficiaries, are the Ministries of Education, the public and private universities of the four countries, the administrators, academic and institutional coordinators, teachers and students.

The agents of the Ministries of Education directly involved in the execution of the project are: the Secretary for University Policy of the Ministry of Education, Science and Technology (Argentina); the Secretary of Higher Education of the Ministry of Education (Brazil); the General Directorate for Higher Education of the Ministry of Education and Culture (Paraguay) and the Ministry of Education and Culture and the University of the Republic (Uruguay).Their role will be to promote and disseminate the activities of the project within each country, to participate in the process of selection of the universities within its country and to establish adequate communication channels with the CRC Higher Education.

The role of universities will be to disseminate the mobility programme; to participate in the students' selection process; and to execute all the activities necessary for the mobiHty management. They will also be responsible for the selection of the administrators, academic and institutional coordinators, and teachers who will participate in the training activities, according to the criteria defined in the framework of the project. The selected institutions must commit to sign an agreement of adherence to the programme, by which they commit to

6 . As indicated in the minutes of the CRC of the education sector, MERCOSUR/RME/LIII CCR/ACTA № 02/05 del 9/06/2005.

respect the norms and procedures and to coordinate with the national education ministry and the project managing unit; to identify a space in the institution with personnel and equipment for the administration of the programme; to recognize the studies carried out by the mobilised student; waive the tuition costs for incoming students from other participating institutions; and receive and send students from and to participating institutions in the programme.

As for the students, only those who are enrolled in the selected institutions will be allowed to participate in the programme. They will be selected according to the followmg criteria: they should be undergraduates, have the course-load completed, be a citizen of one of the 4 member states, reside in their country of citizenship; they must not have participated in any other regional mobility programme; they should have a good academic record, show sufficient interest, motivation and commitment to participate in a mobility programme for 6 months. It will be foster specially the participation of students from underprivileged socio-economic sectors. Special attention will be given to gender aspects.

The indirect beneficiaries are the entire university community of MERCOSUR and all MERCOSUR'S civil society.


The main assumptions are: 1) The process of regional integration is strengthened, the trust of the civil society (and especially of the university community) in MERCOSUR increases, and this results in a reinforcement of the feeling of regional identity and citizenship. 2)The commitment of the authorities of MERCOSUR and the universities to support the continuity of the programme is maintained. 3)There is an effective and efficient communication between the ministries, the university and the management unit of the project.

The main risk for the sustainability is related to the disposition of the governments of the 4 countries and the academic institutions to provide the necessary financial resources to guarantee the continuity of the MERCOSUR mobility programme once the community contribution is ended. However, it should be mentioned that during the last meeting of the Ministers of Education, they committed to ensure the corresponding contributions for the execution of the project and to guarantee the sustainability of the project once the cooperation with the European Union has concluded".7

3.5. Crosscutting Issues

With regard to gender issues, it was verified that the proportion of university students of both genders is very similar in the region (with a slight advantage for -in some specific academic careers- towards women). It is assumed that the same proportions will be maintained in the student mobility. The activities of information, sensitization and visibility will be designed especially to ensure gender equity and engage the participation of the least favored social sectors.

From the point of view of the environment, the student mobility programme will not generate any negative effect.

7 See the minutes of the meeting of education ministers MERCOSUR/XXXRME/ACTA №1-06.



The project will be implemented in the form of de-centralised management through the signature of a financing agreement between the EC and the four member states of MERCOSUR (Argentina, Brazil, Uruguay, Paraguay).- The Commission controls ex ante the contracting procedures for contracts >50.000 Euros and ex post for contracts ^50.000 Euros. Through the programme estimates, payments are decentralised for operating costs and contracts up to the following ceilings:

Works

<€ 300.000

Supplies

<€ 150.000

Services

<€ 200.000

Grants

<e 100.000

o

o o

The University of the Republic of Uruguay (UDELAR) will be the contracting authority and will be responsible for payments for contracts up to the above mentionned ceilings. The EC will be responsible for the audit and evaluation contracts, and contracts and payments above the mentionned ceilings.

4.2. Procurement and grant award procedures


The essential selection and award criteria for the award of grants are laid down in the Practical Guide to contract procedures for EC external actions. The maximum possible rate of co-financing for grants is 80%. Full financing may only be applied in the cases provided for in Article 253 of the Implementing Rules of the Financial Regulation where financing in full is essential to carry out the action in question.

Grants will be attributed after publication of call for Proposals. Contracts will be signed as soon as possible, in order to allow the eligible activities to start during the first half of 2008.


o The total cost of the project is 4.000.00€, and will be financed with a contribution of 3.000.00€ from the European Union (75%) and of 1.000.00 (25%) from MERCOSUR (250.0006 in cash and 750.000€ in kind).

шшмшрршдр B̂ Wg EC Beneficiai TOTAL

1.1. bitemational TA 0 0 1.2. Local TA 200.000 100 200.000

1.3. Monitoring, Ev. & Audit 50.000 100 50.000 1.3 1.4. Studies 50.000 100 0 50.000 1.3 1.5. Training 1 580.000 86 260.000 14 1.760.000 46 1.6. Academic exchange (networks) 600.000 80 150.000 20 750.000 18.8 1.7. Mobility 500.000

Duration: 54 months, including 48 months of execution starting from the signing of the Financing Agreement and 6 months of closing-down.

Main contracts: The main public contracts and call for proposals associated to the action are described in Annex 2.


The European Commission considers the realisation of regular external monitoring missions, to be carried out within 6 months after the beginning of the execution of the project and 6 months prior to its close-down. The monitoring mission reports will be forwarded to the executive entity, which will have to take the recommendations into account.

The main indicators to measure the achievement of the objectives are included in the logical framework in the annex.


Two external evaluations have been planned: one at the project's halfway, and the other at the end of the intervention. Four local audits have been planned, one at the end of each year of execution of the project. The cost of these audits will be met by the beneficiary.


The communication and visibility strategy will be defined at the beginning of the action. It will have three main components:

o information about the mobility programme and its activities, o information and sensibilisation about the integration process, o visibility about the EU involvement in the action.

ANNEX IV

A C T I O N FI C H E FOR M E R C O S U R

IDENTIFICATION

Title

Total cost

CRIS Nr.


DAC-code

MERCOSUR Information society

€ 9,623,600 EC contribution: € 7,000,000 (73 %) Beneficiary contribution: € 2,623,600 (27 %)

DCI-ALA/2006/18558

Project approach - Decentralised

22040: Information and Communication Technology (ICT)

Sector Support to Civil Society of MERCOSUR

2. RATIONALE

2.1. Sector context

At the level of MERCOSUR, there is no joint policy on the Information Society similar to that existing in the European Union. However, some progress has been achieved in this direction: in 1992, the "Special Meeting on Science and Technology" (RECyT) was set up -with a committee for the "Development of the Information Society" - and in 2000, the Working Sub-Group 13 (SGT 13) "Electronic Trade" was set up. The first meeting of the Science and Technology Ministers and High Officials of MERCOSUR and the associated countries was held in May 2006, laying down the "Work Plan of Buenos Aires". One of the activities included in this Work Plan concerns the fresh impetus to common training programmes such as the Virtual School for the Information Society.

The lack of a joint policy on the information society in MERCOSUR and failure to systematically put such topic on its agenda could be explained by three main problems:

• Failure to understand the paradigm of the information society for the development of strategies and the establishment of national and regional policies. Due to this lack of understanding, the matter is not dealt with or is not approached from an articulated point of view. Therefore, the impact of the actions related to the information society in MERCOSUR level has been limited.

Shortage of skilled human resources in Information and Communication Technologies (ICT), both in quantity and high specialisation levels, required for educating new generations or heading the development of innovative applications and uses of ICT. The resulting effect is that few demands are met in fields such as Education, Health, Industry, Trade, etc. related to the information society; or that the negotiations between MERCOSUR and the third parties on matters regarding ICT are hindered.

• The asymmetries among the MERCOSUR countries as regards the regulatory frameworks, the infrastructures and the level of development of ICT applications hamper the execution of joint actions. Due to this situation, interregional electronic trade experience is practically lacking despite its significant potential as an economic integration tool.

The proposed project draws on the development model of the EU initiative Í2010 for the Information Society, based on three pillars: Education, Infrastructure, and Innovation. The project matches up two of the three main pillars, Education and Infrastructure, for which reason cooperation between the EU and MERCOSUR enjoys significant synergies.

The Information Society is made of many constitutive elements such as electronic government, electronic trade, е-Health, tele-education, broadband, secure transactions, electronic signature, use of Web sites, etc. The MERCOSUR countries have demonstrated significantly lower levels of using many of these features than the European, North American and certain Asian countries. Moreover, there are vast social discrepancies between the citizens and companies resorting to ICTs, and those having no access to them. The project cannot develop all of the elements simultaneously, and - in order to maximize the impact of the project - it is proposed to focus on two themes with particularly great potential to contribute to an improved integration of the MERCOSUR countries: training and electronic trade.

2.2. Lessons learnt

The Evaluation report on EC-MERCOSUR Cooperation 1993 - 2002 included, among others, the following recommendation: support to the establishment and spreading of a "MERCOSUR culture" by implementing actions focused on diminishing the gap existing between the MERCOSUR authorities and the civil society, and strenghtening the concept of integration as a "tool for development". This proposed project aims to make a contribution to the recommendation.

The experience of the EC Regional Programme @LIS for Latin America in the field of ICTs demonstrates that greater impact can be reached when actions at the level of the political and regulatory dialogue are complemented by the development of common practical applications. Also, the project reach can be widened by demonstration activities targeted to big audiences.


Complementaries have been identified particularly with the @lis programme which is organised along the following lines of action: political and regulatory dialogue (REGULATEL); development of metrics (by CEP AL); development of the technical norms (by ETSI); forum of the Telecommunications Regulatory Entities; interconnection of the research networks (CLARA networks); beneficiaries networks of the implemented projects; and demonstrative projects on е-Health, Social Work, Telemedicine, etc. Insofar as certain activities of the @lis programme have been completed, the project should take into account its results, such as those related to the harmonised regulation in Latin America.

Other cooperation projects of the EC are also being implemented in the MERCOSUR area, complementing the actions of the Information Society project. Such projects include particularly: Networks of technological centres and Aid to SMEs and Business Development Programme for SMEs in Brazil; Aid to Competitiveness and Promotion of Exports of the SMEs and Technological development of the key fields of the economy in Uruguay; and

Regional development and strengthening of the provincial support structures for the Argentinean SMEs.

Moreover, there are various projects implemented at national level by the MERCOSUR countries that should be coordinated with this project to increase the global impact.


At this moment, there are no similar projects financed by other donors.

3. DESCRIPTION

3.1. Objectives

General objective: to foster joint policies and strategies in the field ofinformation Society at the level of MERCOSUR and to reduce the digital divide and the asymmetries related to the Information and Communication Technologies (ICTs) in the region.

Specific objective: to expand the skills and use of ICTs by the decision makers in the public and private sector, as well as the civil society in MERCOSUR through joint training programmes, development of ICT mfrastractures and applications of electronic trade within the block.


The project is expected to deliver the following two main results, achieved through the corresponding activities:

I. A joint training programme on ICTs at the level of MERCOSUR agreed to and functioning; and the key stakeholders trained

• At least 4 different fields participate in the Virtual School Programme, and at least 960 participants complete this programme (240 persons in each MERCOSUR country), providing altogether 10 modules

• Meetings and events for exchange of experience between the technological hubs

II. The physical and logical infrastructures and the necessary resources for the implementation of the common ICT training programme and practical applications in electronic trade put in place

Joint technical and operative specifications for the technological hubs, including platforms, hardware, software, guidelines, profiles of students and teachers

Creation of technological hubs (at least one in each country) framed in the Virtual School and in accordance with the programme and its methodology

Procedures of operational maintenance (personnel, costs, etc.) and experts capable of keeping the Virtual School running once the project has been completed

Availability of the PKI infrastructure and connection to the CLARA network in all MERCOSUR countries

Pilot platform for electronic trade developed in each MERCOSUR country jointly with the private sector and /or the е-trade organizations

Е-trade platform developed by using the public postal infrastructure and logistics

• Resources (legal frameworks, authorisations, standards, etc.) sufficient for the commissioning and/or improvement of the infrastructures

3.3. Stakeholders

The project beneficiaries are four member states of MERCOSUR (Argentina, Brazil, Paraguay and Uruguay) and are responsible for the commitments assumed before the European Commission.

The four countries agreed to entrust the implementation of the project to the Asociação Rede Nacional de Ensino e Pesquisa en Río de Janeiro, Brazil (depending from the Ministries of Education and Science & Technology of Brazil), by signing a delegation agreement.

One National Coordinator of the Project shall be appointed in each country.

A Steering Committee shall be set up, integrated by the Project Director, acting as the Secretary of the Committee, one representative of the EC delegation in Uruguay, the four National Coordinators, one representative of the Technical Cooperation Committee, one representative of RECyT and one representative of SGT13, of MERCOSUR.

The target groups of this project shall be: participants to the training programmes; academic entities being part of the Virtual School; scientific and technological public entities, national electronic trade associations, business associations, small and middle-sized business associations, business sector associations, national bodies charged with trade promotion and entities of the MERCOSUR structure, particularly SGT13 and RECyT.

The target groups are key actors in achieving the improvement of the capacities related to ICTs and their increased use in the wider populations of MERCOSUR. The final beneficiaries shall be businesses able to improve their productivity and efficiency due to a more intense use of the ICTs, as well as the public sector and the civil society. In order to maximise the reach of the project, various fields will be selected where the most relevant stakeholders involve themselves in the project and act with a multiplying effect on the final beneficiaries.

As the entities to host the technological hubs of the Virtual School are to be selected in each country of MERCOSUR by public call for proposals, various agents of the public and private sector and the civil society, especially the academic community, can have a direct role in the implementation of the project.


Assumptions: The assumptions related to the objectives and results of the project are detailed in the Logical Framework.

Risks: One of the main risks to the sustainability of the project is related to the disposal of the four countries and the involved entities to provide the financial resources required for continuing the activities once the EC grant has been exhausted.

3.5. Crosscutting issues

The impact on crosscutting issues can be summarised in the following way:

Good Governance: The impact shall be direct, as the tools to be implemented can be used by governments to approach the civil society. Additionally, the project seeks to strengthen the capacity of the key decision makers in MERCOSUR to adopt decisions related to the development ofinformation Society.

Gender: No significant gender imbalance has been observed in using the ICTs in the proposed intervention sectors. However, during the implementation of the project, equal opportunities shall be provided for in the selection of experts and beneficiaries.

Environmental Impact: The project is not expected to have a direct impact.

4. Implementation Issues


The project shall be implemented in the form of decentralised management through the signature of a Financing Agreement between the EC and the four member states of MERCOSUR (Argentina, Brazil, Uruguay, Paraguay). The Commission controls ex ante the contracting procedures for procurement contracts > EUR 50,000, and ex post for procurement contracts < EUR 50,000.


Works

<€ 300.000

Supplies

<€ 150.000

Services

<€ 200.000

Grants

<e 100.000

4.2. Procurement procedures



The total cost of the project is 9,623,600 €, and will be financed with a contribution of 7,000,000 € (73 %) from the EC and of 2,623,600 (27%) € from MERCOSUR (280,000 € in cash and 2,343,600 € in kind).

1. SERVICES 1.2 Technical assistance (local) 1.3 Monitoring, Evaluation & audit

1.4 Studies 1.5 Training 1.6 Exchange of experiences

2. SUPPLIES 2.1 Equipment 2.2 Software 3. INFORMATION AND VISIBILITY 4. OPERATING COSTS 4.1 Local staff 4.2 Other operating costs 5. UNFORESEEN TOTAL

EC 4,687,600 3,337,600

40,000

850,000 310,000 150,000

1,925,300 1,138,500

786,800 257,000

70,000 0

70,000 60,100

7,000,000

Beneficiary 840,000 336,000

0 83,000

130,000 291,000

50,600 50,600

0

46,000

1,687,000 661,000

1,026,000

0 2,623,600

TOTAL 5,527,600 3,673,600

40,000 933,000 440,000 441,000

1,975,900 1,189,100

786,800

303,000

1,757,000 661,000

1,096,000 60,100

9,623,600

Duration: 45 months starting from the signing the Financing Agreement, including 3 months for preparation of the administrative and managerial aspects, 36 months for carrying out the technical actions of the project and 6 months for the closure.


The EC may carry out regular external monitoring missions within 6 months after the beginning of the project and 6 months prior to its closure. The monitoring reports will be sent to the Project Management Entity, which will have to take the recommendations into account.

The main indicators to measure the achievement of the objectives are included in the logical framework in the annex.


Two external evaluations have been planned: one at the halfway of the project, and the other at the end of it. Three local audits are foreseen, one at the end of each year of implementation of the project. The cost of these audits will be met by the beneficiary.

4.6. Communication and visibility The communication and visibility strategy will be defined at the beginning of the project, and will include public relations and publicity activities, such as the Web site, brochures, articles and broadcasts, visits, conferences, seminars, promotional materials and launching and closure events, according to the provisions in the Practical Guide of visibility for the cooperation projects of the EC.

Annual action programme in favour of Mercosur · Draft COMMISSION DECISION of[...ļ on the Annual...

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