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25 October 1993
Doc. 6963
1403-22/10/93-1-E
REPORT
on the Social Development Fund of the
Council of Europe: activities and outlook
(Rapporteur: Mr EISMA,
Netherlands)
Summary
The report describes the current reform of the Council of Europe's Social Development Fund designed to place greater emphasis on its original purpose of helping European countries to solve social problems resulting from the presence of refugees and displaced persons, and to strengthen both the Council of Europe's control over the Fund and the monitoring of every aspect of the Fund's operations.
In view of the alleged anomalies brought to light in the course of an internal audit, the report calls for the fullest possible information to be given to the Assembly so as to allow it to make appropriate recommendations in accordance with its statutory responsibilities and democratic control function.
I. Draft recommendation
1. The Assembly attaches great importance to the Council of Europe's Social Development Fund, which since its establishment in 1956 has made a significant financial contribution to social and economic development in many of the Fund's member states, enhancing in particular these countries' capacity to absorb refugees and displaced persons.
2. The Assembly welcomes the opening of an "emergency account" designed to enable the Fund to make zero-interest loans even in non-member countries to meet the urgent needs of refugees and displaced persons who are victims of exceptional circumstances such as war or generalised violence. This would have immediate application to the situation in the former Yugoslavia and the Caucasus.
3. The Assembly gives its full support to the current reform of the Fund designed to place greater emphasis on its original purpose of helping European countries to solve social problems resulting from the presence of refugees and displaced persons, and to strengthen both the Council of Europe's control over the Fund and the monitoring of every aspect of the Fund's operations.
4. As regards the Fund's resources, the Assembly notes with satisfaction that the majority of member states have taken part in the six-fold increase in the Fund's capital decided in 1990, with a view to giving the Fund a firmer financial base in anticipation of wider membership. It further notes that Austria, Bulgaria, the Czech Republic, Estonia, Hungary, Ireland, Lithuania, Poland, Romania, Slovakia, Slovenia and the United Kingdom have yet to join the Fund, but that Bulgaria, Lithuania, Poland and Slovenia are in the process of doing so.
5. The Assembly, in fulfilment of its democratic control function, demands that the Fund's organs show greater openness towards its competent committee, which must be provided with useful, complete and detailed information.
6. The Assembly is deeply concerned at the alleged management anomalies brought to light in the course of an internal audit conducted by an independent accounting firm. It deplores the difficulties encountered in obtaining access to information required by its competent committee in order to examine the scope and consequences of these malfunctionings as well as to assess the responsibilities involved.
7. The Assembly welcomes the decision of the Fund's organs to standardise the rules for submission of projects financed by the Fund, to strengthen the monitoring of projects, to increase control over financial transactions, and to appoint an inspector to ensure that procedures are respected.
8. The Assembly, however, is unable to confirm that the Fund has overcome the problems which it has faced in recent years and would like to be reassured that this is the case. Should the Assembly obtain the internal audit reports and other relevant information referred to above, the competent committee is ready to report back to the Assembly in due course.
9. The Assembly expects to be regularly informed in future about developments within the Fund, as provided for in the revised Articles of Agreement, and to be given access to all relevant documentation, including internal and external audit reports, that will enable it to make fully informed recommendations in accordance with its statutory responsibilities.
10. In the meantime the Assembly recommends that the Committee of Ministers:
i. ensure that full use is made of its powers of supervision over the Fund;
ii. invite the Governing Body of the Fund:
a. to improve co-operation with the Assembly;
b. to transmit forthwith to the Assembly the 1992 internal audit reports and keep it fully informed of the measures taken to implement the recommendations arising from them;
c. to take account, in the forthcoming appointment of the chairperson of the Governing Board, the chairperson of the Administrative Council and the Governor of the Fund, of the Assembly's recommendation that the persons appointed should in no way have been the direct perpetrators of the alleged irregularities referred to in paragraph 6 above;
d. to ensure that the Council of Europe staff regulations effectively apply to the staff of the Fund in accordance with the decision of the Administrative Council in 1956 and the revised Articles of Agreement;
iii. taking into account the strict observance of the new rules concerning the functioning of the Fund and the preceding guidelines:
a. encourage member states which have not yet done so to join the Fund;
b. invite the governments of the member states of the Fund:
i. to contribute generously to the newly-opened "emergency account", as well as to the social account;
ii. to take part, if they have not already done so, in the fourth increase in the Fund's capital;
c. invite the Governing Body of the Fund:
i. to review the ratio of paid-up to subscribed capital in order to increase the Fund's capacity to undertake operations in central and eastern Europe;
ii. to pursue a more active information policy.
II. Explanatory memorandum
by Mr EISMA
I. Introduction
1. The latest of the reports on the activities of the Council of Europe's Social Development Fund which the Committee on Migration, Refugees and Demography periodically submits to the Assembly was debated in the Standing Committee on 28 June 1991. The object of this exercise is to inform both parliamentarians and public opinion about the role and activities of the Fund, which is the main instrument available to the Council of Europe for the purpose of financing social programmes in some of the twenty-one states currently members of the Fund.
2. The Council of Europe Resettlement Fund for National Refugees and Over-population in Europe, as it is officially entitled, was set up in 1956 on the initiative of the then President of the French National Assembly, Mr Pierre Schneiter, in response to the Committee of Ministers' appeal for solutions to the problems of refugees. Thus Article II of the Fund's original Articles of Agreement stipulates that the purpose of the Fund is "to help in solving the problems with which European countries are or may be faced as a result of the presence of surplus elements of population, including national refugees", that is refugees who find themselves on the territory or come under the jurisdiction of a member state of the Fund.
3. Over the years, the Fund's operations have expanded to include aid for disadvantaged regions or regions hit by natural disasters, job creation, vocational training, the re-housing of low-income groups, and schemes relating to public health, education and culture. However, an important attempt to re-focus the Fund's operations on its original purpose, namely to help refugees and displaced persons, has now been made as part of a major revision of the Fund's Articles of Agreement, due to come into effect on 1 January 1994.
4. The revised Articles of Agreement (reproduced in Appendix I) were approved by the Governing Body of the Fund in its Resolutions 247 (1993) and 248 (1993) adopted on 8 June 1993 and by the Committee of Ministers as to Article II ("Purpose") in Resolution (93) 22 adopted on 16 June 1993. Thus the primary purpose of the Fund will now be "to help in solving the social problems with which European countries are or may be faced as a result of the presence of refugees, displaced persons or migrants consequent upon movements of refugees or other forced movements of populations and as a result of the presence of victims of natural or ecological disasters". The investment projects to which the Fund contributes "may be intended either to help such people in the country in which they find themselves or to enable them to return to their countries of origin when the conditions for return are met or, where applicable, to settle in another host country". The secondary purpose of the Fund will be to "contribute to the realisation of investment projects approved by a member of the Fund which enable jobs to be created in disadvantaged regions, people in low income groups to be housed or social infrastructure to be created".
5. This attempt to re-centre the activities of the Fund is welcome because the last two years have demonstrated the Fund's incapacity to intervene in response to Europe's worst refugee crisis since the second world war — namely that precipitated by the tragic events in the former Yugoslavia — despite pressure from both the Committee of Ministers and the Parliamentary Assembly. Moreover, there have been signs that the now secondary purpose of the Fund has been the subject of some maladjustment, which the revised Articles of Agreement are designed to correct.
6. Not only that, but the reform of the Fund's institutions that the new Articles of Agreement incorporate was deemed essential to prevent the recurrence of alleged irregularities in the Fund's operation that appear to have been uncovered in the course of an internal audit conducted by the accounting firm Ernst and Young.
7. Your Rapporteur has made several attempts to obtain the internal audit reports, in order to judge the accuracy of some of the rumours that have been circulating about its contents and to make appropriate recommendations to our Assembly founded on fact rather than hearsay. To this end, he first asked the Chairman of the Governing Body, Mrs Dufour, for the reports on 8 February 1993. He followed up this request with a letter dated 3 March 1993 to which she replied that the Governing Body had refused the request. She declared that she was ready to provide the information necessary to give the Parliamentary Assembly an accurate picture of the situation in the Fund, and agreed to take part in the hearing to be organised on the Fund's activities on 2 July 1993 by the Committee on Migration, Refugees and Demography. At that hearing, your Rapporteur, as well as the Chairman of the committee and several other members present, asked again for the reports, to be given if need be to the committee's secretariat. Mrs Dufour referred members to their Ministers of Finance or Foreign Affairs who had received copies, and undertook to pass on the request that the secretariat be given the reports. In the meantime both your Rapporteur and the Chairman of the committee have sought unsuccessfully to obtain the reports from their respective Ministers of Foreign Affairs and of Finance, ultimately responsible for the conduct of the Fund's activities together with their opposite numbers in the other Fund member states.
8. At its meeting in Paris on 1 September 1993, the Committee on Migration, Refugees and Demography agreed to ask once again for the internal audit reports, this time to be given on a confidential basis to the committee's Bureau and Rapporteur. In response, the Governing Body decided to accede to this request except that the documents to be transmitted would consist of the summary conclusions of the internal audit together with a memorandum explaining what had been done so far to implement the various recommendations made by the auditors. Moreover, these could only be sent after 25 October 1993, date of the Governing Body's next meeting.
9. In these circumstances your Rapporteur is not in a position to deliver a full report on the functioning of the Fund during the last two years and can only deplore the difficulties encountered in obtaining access to information on the exact scope and importance of the irregularities.
II. The Fund's structure and membership: institutional reform
10. The Fund was established on the basis of a Council of Europe Partial Agreement open also to non-member states.1 So far twenty Council of Europe member states have joined the Fund, that is, all except Austria, Bulgaria, the Czech Republic, Estonia, Hungary, Ireland, Lithuania, Poland, Romania, Slovakia, Slovenia, and the United Kingdom. The Holy See has also joined. There is also provision for associate membership: Yugoslavia was an associate member from 1986 to 1991. Negotiations are currently in progress with a view to Bulgarian, Lithuanian, Polish and Slovenian membership. The British Treasury now recognises the Fund as an international financial institution. An important new provision will be that international institutions with a European focus (for example, European Investment Bank, European Bank for Reconstruction and Development) can become members or associate members. The revised Articles of Agreement also stipulate that new members must declare their intention to accede at the earliest opportunity to the Third Protocol to the General Agreement on Privileges and Immunities of the Council of Europe, which puts the Fund on a firm legal footing.
11. Although attached to the Council of Europe and administered under its supreme authority (see below paragraph 12), the Fund has full legal personality and has its own decision-making institutions:
i. The Governing Body (now to be re-named the Governing Board), is the supreme organ of the Fund, deciding on such matters as the accession or suspension of members, operating policies, increases in capital, amendment of the Articles of Agreement (except Article II incorporating the objectives of the Fund, which is reserved to the Committee of Ministers) and the permanent suspension of operations and distribution of assets. It appoints the Governor and the members of the Auditing Board of the Fund, as well as the external auditor. Each member of the Fund appoints a representative to the Governing Body, each of whom has one vote per participating certificate held. Under the revised Articles of Agreement, voting rights can be forfeited to the extent that capital due remains unpaid. Furthermore, assuming that the quorum requirement of two-thirds of members is met, most decisions are to be taken no longer by a two-thirds but by a simple majority of members representing two-thirds of the participating certificates. The effect of this will be to reduce the preponderance of the biggest "shareholders". The role of the Chairman of the Governing Board is now expressly described: he or she will be responsible for political relations with member states, the Council of Europe and other international organisations in close co-operation with the Governor of the Fund, and in particular for keeping the Council of Europe's Committee of Ministers and Parliamentary Assembly informed of the Fund's activities. The Governing Body is currently chaired by Mrs Paule Dufour, who, in order to be in a position to direct the restructuring of the Fund independently, announced early on that she would not seek to renew her three-year term of office when it expires on 31 December 1993.
ii. The Administrative Council makes proposals to the Governing Body with regard to such matters as increases in capital and gives its opinion on the apportionment of capital among members, the appointment of members of the Auditing Board (see below) and the external auditor, and on all other matters to be decided by the Governing Body which have financial consequences. Under the new Articles of Agreement, all other powers not specifically reserved to the Governing Board are delegated to the Administrative Council, that is to say, broadly speaking all the powers necessary to administer the Fund such as approval of the operating budget, loan terms, and decisions as to investment of any accumulated surplus.
The Administrative Council comprises one representative appointed by each member and decisions, with certain exceptions, are taken by majority according to participating certificates held. The new Articles of Agreement will restrict voting rights to the extent that capital due has not been paid up and stipulate more stringent voting conditions for decisions to override the recommendations of the newly established executive committee (see below) or those of the Secretary General of the Council of Europe, as well as for decisions on political issues. The new Articles of Agreement also limit the term of office of the chairman, who is appointed by the Governing Body, to a three-year term renewable once. The present Chairman, Mr Siegfried Fröhlich, has been in office since 1975. His term of office expires on 31 December 1993.
The Administrative Council can set up committees from among its members, and in particular an Executive Committee, another new feature of the Fund's institutional set-up designed to increase efficiency and control. The Committee will essentially conduct an initial examination of applications for loans and guarantees and monitor both the implementation of projects financed by the Fund and the financial activities of the Fund in general.
iii. The Governor heads the Fund's operational services based in Paris and, with the assistance of a staff of sixty-five, conducts its day-to-day business on the instructions of the Administrative Council, to which he submits technical opinions and regular reports, including the balance-sheet and operational accounts. Under the new Articles of Agreement, he is assisted by one or more vice-governors. He and his staff must devote themselves wholly to the service of the Fund to the exclusion of any other activity, and member governments are enjoined not to attempt to influence them. Although the Administrative Council decided in 1956 that the Council of Europe staff regulations should apply to the Fund's operational staff in any matter not covered by the Administrative Council, practice has apparently deviated from this principle. Hence the new Articles of Agreement confirm this requirement, particularly important in the matter of the appeals procedure. Moreover, the Administrative Council will regulate the activities of the Governor more closely. The Governor will now be the legal representative of the Fund and will be appointed for a renewable term of five years (formerly three). The present Governor, Mr Roger Vanden Branden, has been in office since 1979. His current mandate ends in 1993.
iv. The Auditing Board, whose three members are appointed by the Governing Body, inspect and certify the balance sheet and operational accounts and verify that the Fund is being managed according to the principles of sound financial management. The new Articles of Agreement stipulate that the members must be appointed "for their competence in economic and financial matters" and must "act completely independently". They can ask for any documents "such as the reports of the external and internal auditors" and can be entrusted with "any other task pertaining to the supervision of the Fund's financial activity". As an exceptional measure, the chairmen of the Governing Body and Administrative Council have appointed, from a list drawn up by the Auditing Board, an Inspector for a period of one year as from 15 February 1993. He will work full-time within the Fund in complete independence to ensure that procedures are properly respected and that the recommendations of the latest internal audit reports are carried out. These recommendations concern financial and staff management, operational expenses, the procedures for granting loans, and the procedures for monitoring commitments.
12. Under its revised Articles of Agreement (Article XIII), the Fund's relationship with the Council of Europe has been formalised. Thus there is now a formal requirement for the Committee of Ministers and the Parliamentary Assembly to be "regularly informed" of the Fund's activities, and the Governing Board is required to "state a position" on the recommendations and opinions of those two bodies. The Secretary General takes part in, or is represented at, meetings of the Governing Board and the Administrative Council and provides an opinion to the Administrative Council as to the admissibility of loans or guarantees, based on the project's conformity with the political and social objectives of the Council of Europe. The Secretary General puts staff at the disposal of the Fund to provide the Secretariat of the Fund's organs and sub-committees. Your Rapporteur hopes and expects that the regular information to be provided to the Parliamentary Assembly will include access to all relevant documentation, including internal and external audit reports, that will enable it to fulfil its statutory responsibilities.
III. The Fund's resources and operations
13. The Fund is an intergovernmental financial institution which functions as a development bank, and its activities complement those of the other inter-governmental financial agencies. It is endowed with its own capital subscribed by the member states in the form of participating certificates offered to them in percentage proportions stipulated in the Articles of Agreement (see Appendix I for apportionment table). Since 1989 certificates have been denominated in European Currency Units (ecu). Authorised subscribed capital has increased since 1956 from 5,7 million ecus (US$ 7 million) to 1 273 million ecus in four stages decided in 1979, 1982, 1988 and 1990, the last representing a six-fold increase over the previous figure to provide a firmer basis for future assistance to the countries of central and eastern Europe in anticipation of their membership.
14. The new Articles of Agreement leave it up to the Governing Board to fix the minimum percentage of subscribed certificates that must be paid up, and at present twelve per cent of total subscribed capital is paid up. This hardly seems adequate for a Fund that would doubtless have to take an additional financial risk in any operations that it wished to undertake in central and eastern Europe, even though the Fund's financial base has been strengthened by exceptional growth in results in recent years. The Fund's income amounted to 31 million ecus in 1991, after subtracting 44 million as a special provision to cover political risk, and to 109 million ecus in 1992. Over 500 million ecus in income has been generated since the Fund's inception. However, it is surprising that a Fund with social objectives should have to rely so heavily on accumulated profits in order to operate.
15. The Fund makes loans to governments or, subject to adequate guarantees from member governments, to other legal entities. The Fund can borrow "for uses consistent with its purpose" and receive contributions "for specific purposes which come within its stated aims". Thus, contrary to what is generally thought, the Fund has never been excluded a priori from lending to any borrower deemed appropriate, as long as a member government was ready to guarantee repayment should the borrower default on the loan. Moreover, the "purpose" and "stated aims" of the Fund speak about helping "European countries" with problems resulting from the presence of surplus elements of population including national refugees. Indeed, as the Governor points out in his report for the financial year 1992, in 1991 Greece submitted a project designed to limit the displacement of Albanian populations, including people of Greek origin, through the financing of schemes in Albania. This is the first operation of its kind in that the Fund is helping to finance schemes in a non-member country that are implemented and guaranteed by a member country. It is therefore regrettable that, apart from the initiatives taken by the Government of the Netherlands mentioned in paragraphs 16, 28 and 29, other governments have not availed themselves of the opportunity to undertake similar operations on behalf of the refugees and displaced persons in the former Yugoslavia, for example, in response to several recommendations by the Parliamentary Assembly.
16. To meet these needs more effectively in the future, indeed to enable the Fund to take action in non-member countries on the initiative of a member country or to meet the urgent needs of refugees or displaced persons who are victims of exceptional circumstances such as war or generalised violence, an "emergency account" has been created under Governing Body Resolution 245 (1993) (reproduced in Appendix II) to receive contributions from member countries, together with certain resources to be made available under Governing Body Resolution 233 concerning the harmonisation of capital and reserves, and part of the Fund's profits in an amount equal to contributions and payments into the Fund from all other sources, thus effectively doubling its potential. Loans would be made interest-free over fifteen years with a five year grace period. The first such loan, amounting to 1,3 million ecus and guaranteed by the Netherlands, has just been made to Slovenia, with the aim of improving living conditions in reception centres for refugees from Bosnia-Herzegovina. It is to be hoped that, once the Fund has overcome the difficulties it now faces, member states will contribute generously to this account as an act of European solidarity.
17. Procedurally, applications for normal loans from the Fund are submitted by the country's Permanent Representative to the Council of Europe on behalf of the Foreign Ministry. They are first examined as to admissibility from the statutory, political and social points of view by the Secretariat of the Partial Agreement of the Fund, based at the Council of Europe in Strasbourg, the Fund's headquarters. The Governor of the Fund, based at the Fund's management offices in Paris, then gives an opinion on the financial and technical aspects of the project proposal and submits it to the Administrative Council which, in turn, takes the decision whether or not to approve and authorise funding for the project in the light of the general guidelines set by the Governing Body. As stated above, the preliminary scrutiny of loan applications will henceforth be considerably strengthened, at least in theory, by the addition of a further step in the procedure: examination by the newly established Executive Committee of the Administrative Council.
18. Ordinary loans from the Fund are usually granted for a period of ten, or sometimes twenty, years, and usually represent about forty per cent of the total cost of the project. The rest is made up by semi-public bodies responsible for development programmes, by banks or by private funds. Loans are paid in instalments or "tranches", subject to satisfactory progress, and are available in the various currencies in which the Fund negotiates its borrowings. The period of exemption from reimbursement of the capital normally extends from one to five years.
19. The net actuarial cost of loans granted, inclusive of charges, came to 8,6% in 1992, as compared to 8,8% in 1991 and 8,9% in 1990. This downward trend does not fully reflect that of interest rates on the main currency markets mainly because the majority of loans are requested in ecus on account of their exchange stability — and these carry relatively high interest rates.
20. As for its borrowings, new bond issues in 1992 (amounting to the equivalent of 1 029,5 million ecus as opposed to 932,2 million in 1991) appear to have been well taken up, reflecting the Fund's good reputation among investors.2 The currency break-down for these new issues was: ecus: 500 million (48,6%); Swiss Francs: 300 million (16,8%); US$: 195,8 million (15,7%); Yen: 15 thousand million (9,6%); German Marks: 150 million (7,5%); and Spanish Pesetas: 3 thousand million (2,1%).
21. Total loans granted in 1992 amounted to 825,4 million ecus as against 987,3 million in 1991. The heaviest borrowers were Turkey (44,5%), Greece (30,2%), Italy (14,5% — down from 26% in 1991 on account of the abolition of the state guarantee on exchange risks in the context of the harmonisation of capital markets) and Germany (6,2%). The major fields of activity for which loans were granted were re-housing and slum clearance (22,3%), natural disasters (20,8%), aid for refugees and migrants (18,5%), infrastructure facilities — regional development and tourist infrastructure (13,8%), education (12,4%), aid for small and medium-sized businesses (7,3%) and rural modernisation (4,9%). (See table in Appendix III for a breakdown of loans granted by country and field of activity between 1981 and 1992.)
22. The Fund also has a provision for the granting of "social loans", that is, loans at 1% interest financed from the income generated by the Fund. Social loans amounting to 100,3 million ecus have been granted since the account was opened in 1970, mainly in Turkey, Cyprus, Portugal, Italy and Greece: 22,4% in favour of aid programmes for refugees, 16,3% for rural modernisation schemes designed to stem rural depopulation, and 16% to re-housing programmes for low-income groups.
IV. Implementation of Assembly texts containing references to the Fund
23 23. Following the debate on your Rapporteur's last report on the activities of the Social Development Fund, on 28 June 1991, the Standing Committee, acting on behalf of the Assembly, adopted Recommendation 1156 (1991). It called on the Committee of Ministers to draw the attention of the new Council of Europe member states, and of those considering joining, to the potential of the Fund for stimulating their development. Since then no new Council of Europe member state has joined the Fund, although according to the Secretariat of the Partial Agreement contacts have been made and, as has already been mentioned, negotiations are under way with Bulgaria and Slovenia. The Assembly also urged Austria, Ireland and the United Kingdom to join, but despite approaches there is still the same reluctance on the part of those countries. Regarding the Assembly's call for greater publicity for the Fund in member states, the Committee of Ministers in its reply adopted on 11 October 1991 states that the chairman of the Governing Body has taken steps to increase publicity through press conferences and other means, and that these efforts will be intensified in future. However your Rapporteur believes that more could be done still in this area, notably in the production of publicity material and the wider distribution of the Fund newsletter, at least to members of the Assembly.
24. In Recommendation 1156 (1991) the Assembly also invited governments to participate in the latest increase in the Fund's capital in accordance with Resolution 222 (1990) of the Governing Body. To date all member states that were offered new certificates have subscribed except for Belgium, Denmark, Liechtenstein, and the Netherlands. The Assembly also appealed to Fund member states to submit projects for improving the living conditions of non-European migrants and refugees and to supply the social account of the Fund with voluntary contributions. The Committee of Ministers drew member states' attention to these appeals, but there is no evidence that they have been followed up.
25. Finally, the Assembly asked the Governing Body of the Fund to consider, together with the Committee on Migration, Refugees and Demography, ways to monitor independently the execution of projects on the basis of information collected directly at source, and expressed the wish that members of the Assembly be involved in the monitoring procedure. In its reply, the Committee of Ministers pointed out that monitoring had always been undertaken by the Fund itself, and that while appreciating the concern of the Assembly in this matter, "the risk arises of a confusion of competences that might not be of benefit to the projects themselves". Nevertheless, proposals for improving monitoring procedures were under consideration (see the description of the revised Articles of Agreement of the Fund, above), and nothing was to prevent an Assembly Committee from visiting a project while meeting in one of the Fund's member states.
26. In Recommendation 1150 (1991) on the situation of the Iraqi Kurdish population and other persecuted minorities, adopted on 24 April 1991, the Assembly asked the Committee of Ministers to take steps to ensure "that Turkey, as a member state, may benefit immediately from the concrete support" of the Social Development Fund, "originally created for just such emergencies". The Assembly referred to the matter again in Recommendation 1151 (1991) on the reception and settlement of refugees in Turkey, adopted on the same day. The Assembly pointed out that whereas the Social Development Fund had in 1989 granted a loan to Turkey for the construction of 20 000 housing units for refugees from Bulgaria, whom Turkey clearly wished to integrate as quickly as possible, in April 1990 Turkey had withdrawn the authorisation given to the Office of the United Nations High Commissioner for Refugees (UNHCR) to build an accommodation centre for Iraqi refugees near Yozgat, even though the sum needed for the project was totally covered. Consequently, the Assembly invited Turkey to give the authorisation to UNHCR and also "to consider the possibility of appealing to the Council of Europe Social Development Fund to help also the Iraqi refugees." The Committee of Ministers duly passed these recommendations to the "competent bodies" of the Social Development Fund and, in its reply to the Assembly, drew the latter's attention to certain documents provided by the Turkish delegation referring to the areas affected by the temporary influx of people from Iraq. No request for a loan from the Social Development Fund was subsequently introduced by Turkey to help the Iraqi refugees, most of whom have by now returned or been resettled.
27. Three Assembly recommendations concerning the former Yugoslavia made reference to the Social Development Fund. Recommendation 1176 (1992) on the crisis in Yugoslavia: displaced populations, adopted on 5 February 1992, asked the Committee of Ministers to examine ways in which the Fund could be used "to improve the situation of the displaced population, to facilitate their voluntary repatriation and to reconstruct the areas ravaged by the war". In its reply dated 26 March 1992, the Committee of Ministers recalled that the Fund could only intervene at the request of a member state or an associate state. Since the association agreement with Yugoslavia had been frozen, "the possibility of intervention by the Fund accordingly depends on that country's relations with the Fund". The reply had nothing further to say about the possibility of intervention at the request of a member state. However, the recommendation was transmitted to the Fund.
28. In Recommendation 1198 (1992) on the crisis in the former Yugoslavia, adopted on 5 November 1992, the Assembly called on the Committee of Ministers "to ask governments to use the Social Development Fund to assist the displaced persons they receive". The Committee of Ministers' reply of 27 November 1992 referred to its own appeal for urgent action by the Fund and to the payment by the Government of the Netherlands to the social account of the Fund of more than 1,5 million ecus to be used for the needs of displaced populations in the former Yugoslavia. However, this unprecedented offer was not implemented because of a number of technical and bureaucratic difficulties.
29. In Recommendation 1205 (1993) on the situation of the refugees and displaced persons in several countries of former Yugoslavia, adopted on 3 February 1993, the Assembly invited member governments "to make emergency contributions" to the Fund in order "to make preferential loans specifically for projects submitted by and/or for the countries most directly affected by the conflict having relations with the Council of Europe, notably, a. for the building and equipping of decent housing for the inmates of the refugee centres in the worst condition, and b. for the creation of employment or activities designed to occupy usefully the refugees and displaced persons". In its interim reply adopted on 19 March 1993, the Committee of Ministers wrote that the Fund's Governing Body, at its meeting on 17 and 18 December 1992, "was informed that two projects had been presented by Croatia and Slovenia and it decided that for these projects and for other projects in the former Yugoslavia special conditions without interest payments would be applied if a member state were to guarantee such a project. The Governing Body noted that the Administrative Council would take a decision on the two projects as soon as possible and that it was entitled to decide on the adoption of these projects by written procedure. The Administrative Council's Working Party on the re-examination of the fields of action of the Fund has been instructed to make proposals to generally deal with projects in order to meet the urgent needs of displaced populations, victims of exceptional circumstances such as acts of war. The Assembly will be informed of follow-up action." As mentioned in paragraph 16 above, the Netherlands has now contributed three million Dutch Guilders to the new "emergency account" over the three years 1993-95 to help finance a project which it is guaranteeing in Slovenia. Under Governing Body Resolution 245 (1993) instituting the emergency account, this sum will be matched from the Fund's profits.
30. Three recommendations concerned use of the Fund's resources elsewhere in central, eastern and south-eastern Europe. In Recommendation 1179 (1992) on the exodus of Albanian nationals, adopted on 5 February 1992, the Assembly invited the governments of the member states to use the Fund "to finance programmes providing professional training for Albanian nationals in the host countries and facilitating their voluntary return to Albania". In its interim reply dated 26 March 1992, the Committee of Ministers pointed out that action on behalf of Albanians residing in one of the member states could be contemplated should the government in question so request, and that the Fund had recently approved a project put forward by the Government of Greece on behalf of Albanians of Greek origin coming to settle in Greece. In an addendum to that project, and in view of the situation in Albania, the Greek authorities subsequently decided to intervene directly in that country, providing humanitarian aid and resettlement project for Albanians of any origin. In a supplementary reply from the Committee of Ministers to the Assembly dated 22 March 1993, the figures for this project were given: 114,3 million ecus, of which 24,5 million could be used by Greece for projects to be implemented in Albania.
31. In Recommendation 1188 (1992) on migratory flows in Czechoslovakia, Hungary and Poland, adopted on 30 June 1992, the Assembly asked the Committee of Ministers to consider using the Fund "for promoting job creation in the disadvantaged regions" in these countries. In its interim reply adopted in October 1992, the Committee of Ministers agreed to re-examine the recommendation in the light of the opinion of the Governing Body of the Fund and of the European Committee on Migration. It recalled in the meantime that the Fund lends money in principle only to member states, and that the Fund has raised its capital in anticipation of new members from the countries of central and south-eastern Europe, for which purpose one thousand million ecus had been set aside for the period 1992-95. Although the Assembly is still awaiting a further reply from the Committee of Ministers, it is likely to point out that projects in non-member states of the Fund can only be introduced by a member state of the Fund, which must also guarantee the loan.
32. In Recommendation 1207 (1993) on population movements between the states of the former Soviet Union, adopted on 4 February 1993, the Assembly asked the committee to invite the Fund "to widen its scope to enable appropriate non-governmental organisations in countries whose legislative assemblies enjoy special guest status to benefit from financing by the Fund, in co-ordination with the International Organisation for Migration (IOM)". The Committee of Ministers, in its reply adopted on 18 February 1993, simply passed on this recommendation to the governments of the member states and to the Governing Body of the Fund.
V. Conclusion
33. The Social Development Fund appears ready to launch into a new, stronger and more dynamic phase of its existence, poised to reach out to the countries of central, eastern and south-eastern Europe to finance projects closely related to the Fund's primary objective: to help European countries meet the social problems resulting from the presence of refugees and displaced persons. The creation of an "emergency account" to meet the urgent needs of refugees and displaced persons who are victims of acts of war or other similar exceptional circumstances, even outside the circle of the member states, is particularly encouraging, as is the decision of the Netherlands to contribute to it. It is essential that other countries, and particularly the richer ones, do likewise once the Fund has surmounted its present difficulties.
34. The Fund's overall capital base appears to be adequate in principle, even though it must be said that very little of that capital has actually been paid up, leaving the Fund to rely far too heavily on income derived from financial transactions that have been risky enough to have caused unprecedented foreign currency losses, for example.
35. The Fund's revised Articles of Agreement appear to be designed to strengthen the monitoring of projects, both at the point of submission and during their implementation, as well as to ensure that the Fund really does operate in accordance with the principles of sound financial management. However, your Rapporteur is unable to confirm that the Fund has managed to overcome the problems which it has apparently faced in recent years, and would like to be reassured that this is the case. Should he obtain the internal audit reports referred to in paragraph 6 above, he is ready to report back to the Assembly in due course.
APPENDIX I
Amended Articles of agreement of the Council of Europe
Social Development Fund3
Article I
Establishment of the Fund
A Council of Europe Social Development Fund (hereinafter called "the Fund") shall be established.
The Fund shall be attached to the Council of Europe and administered under its supreme authority.
Article II4
Purpose
a. The primary purpose of the Fund is to help in solving the social problems with which European countries are or may be faced as a result of the presence of refugees, displaced persons or migrants consequent upon movements of refugees or other forced movements of populations and as a result of the presence of victims of natural or ecological disasters.
The investment projects to which the Fund contributes may be intended either to help such people in the country in which they find themselves or to enable them to return to their countries of origin when the conditions for return are met or, where applicable, to settle in another host country. These projects must be approved by a member of the Fund.
b. The Fund may also contribute to the realisation of investment projects approved by a member of the Fund which enable jobs to be created in disadvantaged regions, people in low income groups to be housed or social infrastructure to be created.
Article III
Membership of the Fund
a. Any member state of the Council of Europe may become a member of the Fund by addressing a declaration to the Secretary General. This declaration shall contain acceptance of the present Articles of Agreement by the government of the state concerned and the subscription by that government of the number of participating certificates fixed in agreement with the Governing Board, in pursuance of Article IX, Section 3, paragraph 1, litt. a. of the Articles of Agreement.
b. A European state which is not a member of the Council of Europe may:
i. either be admitted as a member of the Fund upon such special conditions as the Fund shall lay down in each case, in accordance with the provisions of Article IX, Section 3, paragraph 1, litt b. A state in respect of which such a decision on admission has been made shall be able to become a member of the Fund by depositing with the Secretary General of the Council of Europe an instrument stating that it accepts the present Articles of Agreement, subscribes the number of participating certificates fixed in agreement with the Governing Board, has taken the measures necessary to enable it to meet all the obligations resulting from the Articles of Agreement and has met all the admission conditions laid down by the Governing Board;
ii. or conclude with the Fund an association agreement upon such special conditions as the Fund may lay down in each case.
c. Upon the conditions laid down by the Governing Board, international institutions with a European focus may also become members of the Fund or conclude an association agreement.
d. Any state becoming a member of the Fund shall confirm, in its declaration or its instrument of acceptance of the Articles of Agreement, its intention:
i. to accede at the earliest opportunity to the Third Protocol to the General Agreement on Privileges and Immunities of the Council of Europe;
ii. pending such accession, to apply the legal arrangements resulting from the Protocol to the property, assets and operations of the Fund and to grant to the organs and staff of the Fund the legal status resulting from the Protocol.
Article IV
Obligations of members
Section 1 — Participating certificates
The Fund shall issue for subscription by its members participating certificates, expressed in terms of European Currency Units (ecu). Each certificate shall have the same nominal value of ecu 1 000. Members shall pay their subscriptions in ecu.
Section 2 — Apportionment and paying up of participating certificates
a. The table appended to the present Articles of Agreement lays down the percentage apportionment of the participating certificates offered for subscription by each member of the Fund.
b. The number of participating certificates to be held by new members of the Fund shall be fixed in agreement with the Governing Board of the Fund, in accordance with Article IX, Section 3, paragraph 1, litt. a. and b. of the present Articles of Agreement.
c. The minimum percentage of subscribed participating certificates to be paid up, and the dates of the relevant payments, shall be fixed by the Governing Board.
d. When the Fund's capital is increased, the Governing Board shall determine, upon uniform conditions for all members, the percentage to be paid up and the corresponding payment dates.
Section 3 — Limitation of liability
No member shall be liable to third parties for any obligation of the Fund.
Article V
Borrowing operations and contributions
For uses consistent with its purpose, the Fund may make borrowings. It may also carry out any other financial transactions useful for the achievement of its purpose under conditions laid down by the Administrative Council.
The Fund is empowered to receive contributions offered for specific purposes which come within its stated aims.
Article VI
Investments
The Fund's liquid assets, capital and reserves may be invested upon conditions to be fixed by the Administrative Council in accordance with the principles of sound financial management.
Article VII
The Fund's means of action
Section 1 — Loans
Loans made by the Fund shall be in one of the following forms:
a. loans to members of the Fund;
b. loans guaranteed by a member of the Fund granted to any legal person approved by that member;
c. loans granted to any legal person approved by a member of the Fund, when the Administrative Council is satisfied that the loan requested is covered by adequate guarantees.
Section 2 — Guarantees
Upon conditions to be fixed by the Administrative Council in each case, the Fund may grant its guarantee to financial institutions approved by a member for loans to further the realisation of the purposes set out in Article II.
Section 3 — Trust account
The Fund may open and manage trust accounts for receiving voluntary contributions from its members, from the Fund and from the Council of Europe.
Section 4 — Interest rebate
Loans may be accompanied by a full or partial interest rebate.
A proportion of the profits realised by the Fund and voluntary contributions by members shall be used to subsidise the interest rate on certain loans upon conditions decided by the Administrative Council.
Section 5 — Conditions for granting loans — Information to be provided
The Administrative Council shall lay down the general conditions for granting loans and shall determine what information a borrower shall be required to furnish in support of its application.
Section 6 — Default
The Fund's transactions in favour of a member or of a legal person as referred to in Section 1, above shall be suspended if the borrower, or failing the latter, the guarantor defaults on payments due in respect of loans or guarantees granted to it by the Fund.
Article VIII
Organisation, administration and supervision of the Fund
The organisation, administration and supervision of the Fund shall be divided between the following:
— th e Governing Board,—
— th e Administrative Council,—
— th e Governor,—
— th e Auditing Board,as
as provided in the following articles.
Article IX
Governing Board
Section 1
The Governing Board shall consist of a chairman and one representative appointed by each member. Each member may appoint a substitute. The Secretary General of the Council of Europe may participate in or be represented at the meetings.
Section 2
The Governing Board is the supreme organ of the Fund; it shall be vested with all powers in respect of the Fund, save the right to change its purposes as stipulated in Article II of the Articles of Agreement.
Section 3
1. The Governing Board shall
a. determine the conditions upon which Council of Europe member states become members of the Fund;
b. authorise European states not members of the Council of Europe and international institutions with a European focus to become members of the Fund and lay down the conditions for such authorisation and the number of participating certificates to be subscribed by such members;
c. adjust the apportionment of the capital among members as shown in the table appended to the present Articles of Agreement;
d. increase or reduce the authorised capital and fix the proportion of the subscribed shares to be paid up and the dates by which payment must be made;
e. ensure compliance with the aims stated in the Articles of Agreement;
approve the Fund's annual report, accounts and other financial statements;
provide general guidelines concerning the institution's activity;
f. suspend or terminate the Fund's operations and, in the event of liquidation, distribute its assets;
g. suspend a member;
h. amend these Articles of Agreement, without, however, making any change in their stated aims;
i. interpret these Articles of Agreement and determine any appeals against decisions concerning the interpretation or application of the Articles of Agreement;
j. authorise the conclusion of general agreements on co-operation with other international organisations;
k. elect the chairman of the Governing Board and the chairman of the Administrative Council;
l. appoint the Governor and, as necessary, on a proposal by the Governor, one or more vice-governors, one of whom shall replace the Governor in the latter's absence, and remove them from their posts and accept their resignation;
m. appoint the members of the Auditing Board;
n. appoint the external auditor and lay down his terms of reference;
o. draw up its Rules of Procedure;
p. exercise such other powers as are expressly assigned to the Governing Board in these Articles of Agreement.
2. The Governing Board shall make its decisions regarding litt. d. and f. on a proposal by the Administrative Council, and on litt. c., m. and n., after hearing the latter. The Administrative Council shall give its opinion on all other decisions with financial consequences.
3. All powers other than those set forth in Section 3 paragraph 1 above shall be delegated to the Administrative Council.
The powers delegated to the Administrative Council in these Articles of Agreement may be reassumed only in exceptional circumstances and for a specified period.
4. The Governing Board shall meet once a year. It may, if necessary, hold additional meetings.
5. The Governing Board may when necessary invite representatives of international organisations or any other interested person to participate in its proceedings without the right to vote.
Section 4
a. Decisions taken by the Governing Board at its meetings shall be valid only if two-thirds of its members' representatives are present.
Decisions shall be taken by voting. Only votes in favour and against shall count for the purpose of calculating majorities.
b. Decisions may also be taken in writing between meetings.
c. Each member of the Fund shall have one vote for each participating certificate held by it.
d. Any member which has failed to pay on time the part of the capital falling due may not, for as long as such non-payment persists, exercise the voting rights corresponding to the sum due and not paid up.
e. Decisions shall be reached by a majority of the members voting in favour or against and holding two-thirds of the votes cast.
f. A majority of three-quarters of the members voting in favour or against and holding three quarters of the votes cast, shall be required for:
—th e decision provided for in Section 3, paragraph 3, of this article;—
—ad justments to the apportionment table appended to these Articles of Agreement not resulting from the admission of new members which are made pursuant to Section 3, paragraph 1, litt. c.g.
g. The decisions referred to in Section 3, paragraph 1, litt. f. and h. shall be taken by an unanimous vote of the members casting a vote.
Section 5
a. The Governing Board shall be chaired by a chairman elected by it for a three-year term.
The outgoing chairman may be re-elected for a further three-year term. Each member of the Fund is entitled to present a candidate.
The Chairman shall be responsible for political relations with officials of the states, the Council of Europe and other international institutions, in close co-operation with the Governor.
The Chairman shall keep the Committee of Ministers and the Parliamentary Assembly regularly informed of the Fund's activities; he shall, inter alia, forward the Governor's report to the Committee of Ministers and maintain all other necessary contacts with the Council of Europe.
Article X
Administrative Council
Section 1
The Administrative Council is vested with all the powers delegated to it by the Governing Board in pursuance of Article IX.
Section 2
a. The Administrative Council shall consist of a chairman appointed by the Governing Board for a three-year term, renewable for a second three-year term, and one representative appointed by each member. Each member may appoint a substitute. The Secretary General of the Council of Europe may participate in or be represented at the meetings.
b. The Administrative Council shall be convened by its chairman or at the request of five of its members at least four times a year.
c. The Administrative Council may, when necessary, invite representatives of international organisations or any other interested person to participate in its proceedings without the right to vote.
Section 3
a. Decisions of the Administrative Council at its meetings shall be valid only if two-thirds of its members' representatives are present.
b. Each member shall have one vote for each participating certificate held by it.
Decisions shall be taken by a majority vote. Only votes in favour or against shall count for the purpose of calculating the majority or majorities.
c. Decisions may also be taken in writing between meetings.
d. Any member which has failed to pay on time the part of the capital falling due may not, for as long as such non-payment persists, exercise the voting rights corresponding to the sum due and not paid up.
e. However, the Administrative Council shall adopt the following decisions by a majority of its members voting in favour or against and by a majority of votes cast:
i. decisions relating to investment projects which have not obtained in the Executive Committee the majority required under Section 5, litt. e. of this Article;
ii. proposals and opinions addressed to the Governing Board in accordance with Article IX, Section 3, paragraph 1, litt. c., d., f., m. and n.;
iii. adoption or amendment of the Rules of Procedure of the Administrative Council;
iv. election of members of the Executive Committee.
f. Furthermore, the Administrative Council shall take by a majority of members voting in favour or against and holding two-thirds of the votes cast decisions relating to investment projects which have not received the opinion as to admissibility referred to in Article XIII, litt. c. of the Articles of Agreement.
Section 4
The Administrative Council may at any time appoint committees from among its members and delegate to such committees powers to be specified in each case.
Section 5
a. The Administrative Council shall set up an executive committee; this committee shall consist of nine of its members, elected for a two-year renewable term. When appointing those members, the Administrative Council shall bear in mind the fact that all the Fund's members should have the possibility of sitting on the Executive Committee, while also taking into consideration the participating certificates held and the importance of ensuring a balanced geographical distribution.
The Executive Committee shall, inter alia:
i. conduct an initial examination of applications for loans and guarantees;
ii. monitor the implementation of the investment projects financed by the Fund and take any appropriate decisions in this connection;
iii. monitor the Fund's financial activities, in particular its financial transactions, and take all the necessary measures in this connection;
iv. give its opinion on any other question put to it by the Administrative Council;
v. assist in the preparation of the Administrative Council's meetings in respect of the above-mentioned items.
b. The Executive Committee shall report on its decisions, work and proposals at each meeting of the Administrative Council.
c. Any member not represented on the Executive Committee may, on request, take part in the discussion of agenda items of particular interest to it.
d. The Executive Committee shall meet as frequently as necessary, but at least eight times a year.
e. Within the guidelines and limits laid down by the Administrative Council, the Executive Committee shall take its decisions by a majority of seven of its members. If this majority is not attained, the item under discussion shall be referred back to the Administrative Council.
Article XI
Governor
Section 1 — Functions of the Governor
a. The Governor shall be the legal representative of the Fund. He shall be the head of the Fund's operational services and shall conduct day-to-day business on the instructions of the Administrative Council. In accordance with Articles V and VII, he shall not contract any financial obligations without the authorisation of the Administrative Council. Under the general supervision of the Administrative Council, he shall be responsible for the organisation of the operational services and for the appointment and dismissal of the staff of the Fund, within the framework of the regulations adopted by the Administrative Council.
b. He shall be assisted by one or more vice-governors and replaced by one of them if necessary.
c. In the performance of their duties the Governor and staff must devote themselves fully to the service of the Fund, to the exclusion of any other activity. Each member shall respect the international character of the task of the Governor and staff of the Fund and refrain from any attempt to influence these persons.
d. The Council of Europe Staff Regulations shall be applicable to the staff of the Fund in any matter not covered by a specific decision of the Administrative Council.
Section 2 — Reports to the Administrative Council
The Governor shall give his opinion to the Administrative Council on the technical and financial aspects of investment projects submitted to the Fund.
The Governor shall submit to the Administrative Council regular reports on the position of the Fund and on proposed transactions and shall supply it with any information it may request.
The Governor shall draw up a full annual report on all operations effected during the year. This report shall be accompanied by the balance sheet of the Fund and the operational accounts, together with the Auditing Board's report on these documents.
Section 3 — Appointment and salary of the Governor
The Governor and vice-governors shall each be appointed for a renewable term of five years. The amount of their salary shall be fixed by the Administrative Council.
Article XII
Auditing Board
The Auditing Board shall consist of three members appointed pursuant to Article IX, Section 3, litt m. for their competence in economic and financial matters. They shall act completely independently.
The Auditing Board shall inspect the Fund's accounts and verify that the operational accounts and balance sheet are in order.
In its annual report, the Auditing Board shall certify that the balance sheet and operational accounts accord with the books, that they give an accurate and true picture of the state of the Fund's affairs as at the end of each financial period and that the Fund is being managed according to the principles of sound financial management.
The Board shall receive copies of any documents useful to it in its work, such as the reports of the external and internal auditors. At the request of the organs of the Fund, the Board shall perform any other task pertaining to the supervision of the Fund's financial activity.
Article XIII
Council of Europe
a. With a view to ensuring relations with the Council of Europe, the Committee of Ministers and Parliamentary Assembly of the Council of Europe shall be regularly informed of the Fund's activities. The Governing Board shall state a position on the recommendations and opinions of the Committee of Ministers and Parliamentary Assembly transmitted to it.
b. The Secretary General of the Council of Europe shall participate in, or may be represented at, meetings of the Governing Board and Administrative Council, without the right to vote.
He shall carry out any duty entrusted to him in pursuance of the present Articles of Agreement or of the Third Protocol to the General Agreement on Privileges and Immunities of the Council of Europe. In this connection he shall place the requisite staff at the disposal of the Fund.
He may perform any other duty entrusted to him by the organs of the Fund in accordance with the provisions of the Partial Agreement on the Social Development Fund.
c. Applications for loans or guarantees shall be submitted to the Administrative Council after receipt of the Secretary General's opinion as to admissibility based on the project's conformity with the political and social aims of the Council of Europe.
Article XIV
Headquarters
The principal office of the Fund shall be at Strasbourg, France. The headquarters of the operational services shall be in Paris and may be changed only by a decision of the Governing Board and an identically worded decision of the Administrative Council.
Article XV
Suspension of operations and liquidation of the Fund
Section 1 — Withdrawal of members
Any member may withdraw from the Fund on conditions laid down by the Governing Board on giving notice of six months prior to the end of the current calendar year.
Section 2 — Suspension of operations
Should the Governing Board decide upon the suspension of activities, the Fund shall cease all loan and guarantee operations.
Section 3 — Liquidation of the Fund
Should the Governing Board decide upon the termination of operations, the Fund shall forthwith cease all activities except those incidental to the settlement of its obligations and the realisation, conservation and preservation of its assets.
After all liabilities of the Fund, including satisfaction of rights upon distribution which may previously have been granted by the Fund upon accepting contributions under Article V, have been discharged or provided for, the members of the Fund shall adopt a plan for the distribution of assets which shall be based on the following principles:
a. No member of the Fund against which the Fund has an unsatisfied claim shall be eligible to participate in the distribution under the plan until it has regularised its position;
b. Priority shall be given to using the Fund's net assets to reimburse to members the sums paid by them in pursuance of Article IV, in proportion to the number of certificates paid up.
Any excess of the Fund's net assets over the aggregate total of such distributed shares shall be allotted to all members of the Fund in proportion to the number of participating certificates held by each;
c. Should there be net liabilities, they shall be distributed among the members of the Fund in proportion to the number of participating certificates held by each. Each member will be required to pay its share to the Fund, less the certificates paid up and up to a maximum of the certificates subscribed.
Article XVI
Interpretation of the present Articles of Agreement
Any decision of the Administrative Council involving the interpretation of the present Articles of Agreement may be referred to the Governing Board at the request of any member. Until such time as the Governing Board has made a ruling, the Fund may, to the extent it deems it necessary, act on the basis of the decision of the Administrative Council.
Article XVII
Notifications
The Secretary General of the Council of Europe shall notify the Members of the Fund and the Governor of:
a. the deposit of any declaration or instrument of acceptance of these Articles of Agreement;
b. any document amending these Articles of Agreement.
The Secretary General of the Council of Europe shall forward a certified copy of these Articles of Agreement to each member state of the Council of Europe and to every other member of the Fund.
Table appended to the Articles of Agreement showing
the percentage apportionment among members of
the fund of the participating certificates
offered for subscription
|
Member states |
% |
|
Belgium |
3,34 % |
|
Cyprus |
0,40 % |
|
Denmark |
1,82 % |
|
Finland |
1,42 % |
|
France |
18,62 % |
|
Germany |
18,62 % |
|
Greece |
3,34 % |
|
Holy-See |
0,01 % |
|
Iceland |
0,21 % |
|
Italy |
18,62 % |
|
Liechtenstein |
0,10 % |
|
Luxembourg |
0,21 % |
|
Malta |
0,21 % |
|
Netherlands |
4,04 % |
|
Norway |
1,42 % |
|
Portugal |
2,83 % |
|
San-Marino |
0,10 % |
|
Spain |
12,14 % |
|
Sweden |
2,83 % |
|
Switzerland |
1,82 % |
|
Turkey |
7,90 % |
|
Total |
100,00 % |
RESOLUTION (93) 22
concerning the amendment of Article II of the Articles
of Agreement of the Council of Europe Social Development Fund
(adopted by the Committee of Ministers on 16 June 1993
at the 496th meeting of the Ministers' Deputies)
The Committee of Ministers with membership restricted to the representatives of the states of the Council of Europe which are members of the Council of Europe Social Development Fund (Resettlement Fund),5
Considering that the Articles of Agreement of the Council of Europe Resettlement Fund for National Refugees and Overpopulation in Europe were adopted in the form of a Partial Agreement by its Resolution (56) 9 of 16 April 1956;
Having regard to Article IX — Section 1 — litt. h, of these Articles of Agreement which states that the Governing Body, representing the members of the Fund, shall have sole authority to amend these Articles, without, however making any change in their stated aims;
Considering that by its Resolution 247 (1993), the Governing Body decided to adopt the amended Articles of Agreement of the Council of Europe social Development Fund, subject to the approval of the Committee of Ministers on Article II,
Decides
Article II of the amended Articles of Agreement of the Social Development Fund, which is appended to this resolution, is adopted.
APPENDIX II
Resolution 245 (1993)
Paris, 28 May 1993
The Governing Body,
Having regard to the recommendations and appeals made by the Parliamentary Assembly and the Committee of Ministers;
Having regard to the decisions made by the Governing Body at its 126th meeting in December 1992;
Having regard to the discussion at the 27th joint meeting in December 1992;
Having regard to the decisions of the Administrative Council and to the report of its working party;
Having regard to Resolution 1277 (1993) of the Administrative Council from 2 April 1993;
Having regard in particular to Article II, Article IV, Section 4, Article VI, Section 1.iv, Section 2, Section a 3.i. and ii., and Article XIV, Section 3 of the Articles of Agreement of the Resettlement Fund,
Decide to create a special account financially autonomous called "Emergency Account" to finance loans to meet the urgent needs of refugees and displaced persons who are victims of acts of war or other similar exceptional circumstances. The loans shall comply with Resolution 934;
Considers that this account could be fed with:
1. voluntary payment by member countries;
2. such allocations for social loans as beneficiary countries make available;
3. allocations of part of the annual profits as of 1992, after the other reserves have been fed to the necessary levels. These profits shall be paid into the "Emergency Account" in amounts equal to voluntary payments which will be made by member states and allocations made pursuant to paragraphs 1 and 2 above.
Profits allocations that, after two years, have not been paid into this account, shall be transferred to the reserves for social loans.
Fixes the terms of the loans granted through the newly established account as follows:
—in terest rate of 0%;—
—du ration of fifteen years with a five year grace period;—
—or such other conditions that are no less favourable to the Fund.Re
Reporting committee: Committee on Migration, Refugees and Demography.
Budgetary implications for the Assembly: none.
Origin: Standing mandate.
Draft recommendation unanimously adopted by the committee on 15 October 1993.
Members of the committee: MM. Flückiger (Chairman), Cucó (Alternate: Sainz Garcia), Sir John Hunt (Alternate: Mr Atkinson) (Vice-Chairmen), Mrs Aguiar, Mrs Arnold, Mrs Astgeirsdottir, MM. Attard Montalto, Biefnot, Billing, Böhm, Branger, Brennan, Brito, Brunhart, Ehrmann (Alternate: Schreiner), Eisma, Fava, Foschi, Fuhrmann, Galanos, Ghesquiere, Gotzev, Mrs Hacklin, MM. De Hoop Scheffer (Alternate: Aarts), Iwinski, Kalus, Karcsay, Kiliç, Kiratlioglu, Lord Kirkhill, MM. Konen, Laanoja, Landsbergis (Alternate: Saudargas), Lupták, Mrs Mascher, Mr Pahtas, Mrs Persson, Mrs Robert, MM. Sarafopoulos, Siwek, Skaug, Stoylov, Trojan, Miss Szelényi, MM. Vázquez, Zlobec.
N.B. The names of those members present at the meeting are printed in italics.
Secretaries to the committee: Mr Newman and Miss Nollinger.
1 1 The amended Articles of Agreement restrict membership to European countries (member states of the Council of Europe and non-members).
2 1 For its main long-term transactions, the Fund has the top AAA rating with the Japan Bond Research Institute and has very recently moved up to that rating from AA+ with the American agency, Standard and Poor's. However, the Fund has the second-level Aa1 rating with the other American agency, Moody's. The recent up-grading by S&P probably reflects the upper limit on the Fund's debt to capital and reserves ratio of 4:1 compared to 15:1 previously. This may be compared with, for example, a statutory 2.5:1 ratio of lending to subscribed capital for the European Investment Bank. For the Fund's short-term transactions, S&P and Moody's have granted it their top ratings, namely A-1 and P-1.
3 1 Adopted by the Governing Body of the Fund by its Resolutions 247 (1993) and 248 (1993).
4 2 The text of this article was adopted by the Committee of Ministers at the 496th meeting of the Ministers' Deputies by Resolution (93) 22 appended hereto.
5 1 States concerned: Belgium, Cyprus, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Liechtenstein, Luxembourg, Malta, Netherlands, Norway, Portugal, San Marino, Spain, Sweden, Switzerland and Turkey.