The background to the complaint

1. The present complaint concerns the way the European Commission dealt with a dispute arising in the context of an EU-funded project in a third country (the project aimed to support food security by improving soil fertility in "the Centre-Nord and Plateau-Central regions of that country).

2. In 2007, the Commission, through its Delegation in the country ('the Delegation'), concluded a Grant Agreement with an NGO ('the Beneficiary'), to carry out the project.

3. The Beneficiary carried out the project by entering into Partnership Agreements with three local NGOs, one of which was the NGO "A". The complainant, an association providing technical support to NGO A, was not a party to the Partnership Agreement, but acted as an associated organisation.

4. On 26 April 2011, NGO A asked the Beneficiary for EUR 42 430 to cover additional costs it had incurred in carrying out the project. The Beneficiary replied that it would look into the matter. However, it noted that it had already submitted a budget amendment to the Commission in November 2010. Thus, it stated, it doubted whether it could cover NGO A's additional costs.

5. On 21 June 2011, the complainant contacted the Delegation to inform it that the Beneficiary had delayed transferring EU funds to NGO A and that the Beneficiary was not transparent as regards the use it made of EU funds. The complainant suggested that the Delegation ask for an external audit of the project.

6. On 13 July 2011, the complainant again asked the Delegation to intervene. The Delegation responded, saying that the Beneficiary and NGO A needed to resolve their dispute in accordance with their Partnership Agreement. The Delegation put teh Beneficiary in copy to its replies and expressed hope that there would be dialogue between the Beneficiary and NGO A.

7. On 18 July 2011, NGO A sent a letter to the Beneficiary asking for its previous letter of 26 April 2011 (referring to the budget being exceeded) to be withdrawn. NGO A pointed out that the amount of EUR 42 430, in fact, corresponded to unpaid bills falling within the agreed budget.

8. On 18 July 2011, the complainant wrote to the Delegation to request information on the Beneficiary. The complainant specifically asked for copies of various reports that the Beneficiary had sent to the Delegation and a copy of the November 2010 budget amendment request. It also asked if other amendments existed. The same day, the Beneficiary wrote to the complainant to inform it that NGO A had all the information it needed and that NGO A could, at any time, request additional information from the Beneficiary. It added that NGO A and the other partners had been involved in the preparation of the amendment of the Grant Agreement. It also insisted that the complainant had no mandate to contact the Delegation in relation to the project.

9. On 9 September 2011, the complainant wrote again to the Delegation (with the Beneficiary in copy). It demanded that the Beneficiary transfer EUR 42 000 to NGO A.

10. On 14 September 2011, the Beneficiary wrote to the Delegation (putting the complainant in copy) to explain that the funds of the project had been spent in accordance with the Grant Agreement. It added that, in line with the audit report, it would pay EUR 7 181.96 to NGO A. Further, as regards the costs incurred by NGO A allegedly in excess of the allocated budget, the Beneficiary stated that it would settle the matter through an amicable solution with NGO A, in view of the fact that the additional costs had been incurred by NGO A in efforts to assist the local population in the third country.

11. On 2 October 2011, the complainant again asked the Delegation to order an external audit of the project. The Delegation immediately replied to the complainant that it had no contractual relation with the partners and that the complainant had no right to intervene in the relations between the Beneficiary and NGO A.

12. On 3 October 2011, the Delegation requested from the Beneficiary a copy of the audit report, which it obtained on 23 November 2011.

13. Following further e-mails from the complainant, the Delegation, on 11 October 2011, invited the complainant for an informal meeting. The complainant declined (it stated that it could not travel from Germany for the meeting). On 14 October 2011, a meeting took place between the Beneficiary and NGO A, with the Delegation present as an observer. The minutes of the meeting show that EUR 7 181.96 had already been paid to NGO A on the basis of the results of the audit. The minutes of the meeting also show that, according to the audit report, the Beneficiary had still to pay to NGO A an additional amount of EUR 15 300.68.

The subject matter of the inquiry

14. In its complaint to the Ombudsman, the complainant submitted the following allegations and claims:

Allegations:

(1) The Commission failed to investigate the complainant's allegations that the Beneficiary infringed the Grant Agreement, did not respect the budget and did not act transparently; and

(2) The Commission infringed Article 22 of the European Code of Good Administrative Behaviour[1] by not providing the complainant with the information it requested concerning the management of the budget under the Grant Agreement.

Claims:

The Commission should (1) carry out an audit of the project, and (2) provide the requested information.

The inquiry

15. The Ombudsman received the complaint on 19 October 2011. He sent the complaint to the Commission on 15 November 2011 with a request to submit an opinion. The Commission sent its opinion on 2 May 2012. The Ombudsman sent the opinion to the complainant on 9 May 2012 with a request for observations. The complainant's observations were received on 29 May 2012.

The Ombudsman's analysis and conclusions

A. Allegation that the Commission failed to investigate the allegations concerning the Beneficiary and the claim for an audit

Arguments presented to the Ombudsman

16. In support of its allegation, the complainant argued that the Delegation had not acted objectively and impartially and had treated the Beneficiary favourably. It insisted that the Commission defend the interests of the local NGO. It referred in this context to Articles 8 (impartiality and independence) and 9 (objectivity) of the European Code of Good Administrative Behaviour.

17. The Commission, in its opinion, made the preliminary remark that it had no contractual relationship with NGO A or with the organisations associated with NGO A, such as the complainant. It had a contractual relationship only with the Beneficiary. The Commission thus insisted that the complainant is a third party in relation to the Grant Agreement. Likewise, the Commission is a third party as regards the relations between the Beneficiary and the partners. Therefore, the Commission could not intervene in a contractual dispute between NGO A and the Beneficiary. It advised that NGO A contact the Beneficiary to resolve the dispute.

18. The Commission noted that, nevertheless, because of the complainant's persistence and in the interests of good administration, the Delegation tried to obtain a better understanding of the situation and the reasons for the complainant's requests. More particularly, the Delegation asked the Beneficiary to provide clarifications and to send it a copy of the audit report. It also organised a meeting between the parties.

19. As regards the Grant Agreement, the Commission stated that there was no breach of the Grant Agreement. It noted that the Grant Agreement does not deal with the transfer of funds from the Beneficiary to its partners and that it is not for the Commission to interfere in such transfers. The Commission must only ensure, it insisted, that the project was properly implemented. In the present case, it noted, the project was properly implemented. It added that the dispute between NGO A and the Beneficiary had not affected the project, as confirmed by the audit report (page 5, paragraph 1.2). The Commission further added that the audit report and its meeting with NGO A and the Beneficiary showed that the dispute between NGO A and the Beneficiary only concerned the implementation of the Partnership Agreement.

20. By way of conclusion, the Commission stated that it had acted diligently and respected the European Code of Good Administrative Behaviour.

21. The complainant, in its observations, stated that the Beneficiary had breached the Grant Agreement, the Partnership Agreement and the Partnership Declaration. The complainant stated that the Delegation should intervene to ensure that the Beneficiary respect its obligations.

The Ombudsman's assessment

22. The Ombudsman first notes that the primary task of the Commission in relation to the aid projects it finances is to ensure that all the EU funds allocated to a project are spent on the project in accordance with the agreed spending plan and that the project's aims are achieved.

23. In the present case, the dispute arises because a project partner allegedly incurred costs that exceeded the budget allocated to it. The Ombudsman notes that the Delegation based its assessment on the audit report submitted to it by the Beneficiary. That audit specifically looked into the financial situation between NGO A and the Beneficiary. There was no reason which would have justified the Commission calling for a second audit of the project.

24. In addition, on 14 October 2011, the Delegation took part, as an observer, in a meeting between the Beneficiary and NGO A. The minutes of the meeting show that EUR 7 181.96 had already been paid to NGO A on the basis of the results of the audit. The minutes of the meeting also show that, according to the audit report, the Beneficiary had still to pay to NGO A an additional amount of EUR 15 300.68. It would appear that NGO A, which is the party directly concerned by the matter, did not contest the results of this meeting, which were based on the audit report. In light of the above, the Ombudsman is of the view that the Commission took all the necessary steps to verify that the EU funds allocated to the project were spent on the project in accordance with the agreed spending plan.

25. There is also no suggestion that the money spent on the project did not give rise to successful outcomes in the third country.

26. There is thus nothing in the file which would suggest that the problems between the Beneficiary and NGO A impacted negatively on the successful outcome of the project or otherwise resulted in an infringement of the Grant Agreement by the Beneficiary.

27. The Ombudsman thus finds that there was no maladministration by the Commission in relation to the complainant's allegation that it failed to investigate the matter. The complainant's claim for a new audit to be carried out is therefore not grounded.

28. In addition to the need to ensure correct use of EU funds and the successful outcome of the project, it is in the interests of good administration for the Commission to ensure that recipients of EU funds act fairly and correctly towards partners in projects it funds. The Commission should thus take appropriate measures to be informed as regards problems that might arise and to assist, where possible, in resolving disputes concerning those problems.

29. The Ombudsman notes that, in the present case, the Commission, in the interests of good administration, not only took several steps to obtain a better understanding of the situation between the Beneficiary and NGO A, but also showed that it was ready to mediate between the parties involved in the dispute.

30. On 3 October 2011, the Delegation first made clear to the complainant that, although it could not intervene in the contractual relations between the Beneficiary and NGO A, it was ready to assist in resolving the problems. On the same day, it sent a request to the Beneficiary for a copy of the audit report, in order to have a better understanding of the problems (it finally received that report on 23 November 2011). By making this request, the Delegation showed that it genuinely wanted to assist in resolving the dispute.

31. The Delegation then took further action to clarify the situation by organising a meeting on 14 October 2011 to hear both parties, the Beneficiary and NGO A. By organising the meeting between the Beneficiary and NGO A, the Delegation demonstrated that it was ready to act as a mediator in the dispute. The conclusions of that meeting showed that the amount of EUR 7 181.96 had already been paid to NGO A, and that a second amount of EUR 15 300.68 was still to be paid[2]. The Beneficiary agreed that it would pay this sum once the audit report had been validated by its headquarters.

32. The Delegation also invited the complainant to come to the Delegation for an informal meeting to hear his version of the events, but the complainant was unable to attend.

33. On the basis of the above, the Ombudsmen agrees that, despite its limited scope for intervention in a contractual relation to which it was not a party, the Delegation took all appropriate steps to keep itself informed of the situation and to assist the partners in arriving at an amicable solution to their dispute. The Ombudsman commends the Commission for taking these steps.

B. Allegation that the Commission failed to provide the requested information and the corresponding claim

Arguments presented to the Ombudsman

34. The complainant alleged that the Commission infringed Article 22 of the European Code of Good Administrative Behaviour by not providing it with certain information and documents. Specifically, the complainant asked for information on the budget lines directly managed by the Beneficiary, and for copies of reports sent to the Delegation by the Beneficiary, as well as for a copy of the Beneficiary's request for an amendment to the Grant Agreement. The complainant claimed that the Commission should provide the requested information and documents.

35. The Commission, in its opinion, pointed out that the complainant's request for access had to be treated in accordance with Regulation 1049/2001/EC[3]. It stated that, when dealing with such requests, it has to respect Article 339 of the Treaty on the Functioning of the EU[4], as well as the Commission's Code of Good Administrative Behaviour, in particular, its point 4[5].

36. The Commission stated that the requested documents were in its possession by virtue of the Grant Agreement, to which the complainant was not a party. It added that the complainant was not even a party to the Partnership Agreement between NGO A and the Beneficiary.

37. The Commission stated that the Beneficiary's reports requested by the complainant provide a full account of all aspects of the implementation of the project during the relevant period. The reports thus provide specific information on every partner organisation. The Commission stated that the Partnership Agreements give partners a contractual right to receive these reports. It added that, as the Commission is a third party to the Partnership Agreements, it cannot intervene in the execution of that contractual right of the partners.

38. The Commission then went on to state that, pursuant to Article 4(4) of Regulation 1049/2001[6], the Commission could not transmit these documents to a third party, such as the complainant, without first consulting the Beneficiary. The Commission noted, however, that consulting the Beneficiary turned out to be unnecessary since the Beneficiary had confirmed that NGO A already had all the necessary information and could request any information from the Beneficiary at any time. The Delegation therefore did not need to ask the Beneficiary whether it could disclose the documents in question. Moreover, since neither the complainant nor NGO A subsequently requested disclosure of the documents, the Delegation rightly assumed that NGO A had received them.

39. The Commission noted that it was, in any case, taking the necessary steps to verify whether the documents had been transmitted to NGO A.

40. The Commission further noted that, in its e-mail of 10 October 2011, the complainant had requested information on an alleged breach by the Beneficiary of the Partnership Agreement and on the consequences of this on the Grant Agreement. The Commission argued that it is not for it to determine the consequences of the alleged breach of a contract to which it is not a party. The Commission nevertheless felt it was appropriate to clarify the situation, given the need to respect the principle of sound financial management and to ensure that the issues raised did not affect the good performance of the project. Therefore, in order to clarify the situation, the Delegation held an informal meeting on 14 October 2011, to which the complainant was invited. The meeting allowed part of the dispute between the Beneficiary and NGO A to be clarified. The Commission however noted that the complainant did not attend the meeting. Instead, it submitted the complaint to the Ombudsman a few days after the meeting.

41. The complainant, in its observations on the Commission's opinion, stated that, thanks to the intervention of the Delegation, it had now received the documents from the Beneficiary regarding the implementation of the project (such as the 2008 narrative report, the document entitled: "Amendment No 1" and the final audit report).

The Ombudsman's assessment

42. As regards public access to the reports held by the Commission[7], the Commission correctly noted that, in accordance with Article 4(4) of Regulation 1049/2001, it should first consult the third party that submitted the documents to it, namely the Beneficiary, before releasing the documents. Article 4(4) of Regulation 1049/2001 states that "[a]s regards third-party documents, the institution shall consult the third party with a view to assessing whether an exception in paragraph 1 or 2 is applicable, unless it is clear that the document shall or shall not be disclosed".

43. The Commission then stated that such consultation turned out to be unnecessary since the Beneficiary had earlier confirmed, in an e-mail of 18 July 2011, that NGO A already had all the information it needed and could request any information from the Beneficiary at any time[8]. The Commission thus considered that the Delegation did not need to ask the Beneficiary whether it could disclose the documents in question to the complainant. It also argued that, since neither the complainant nor NGO A subsequently requested disclosure of the documents, the Delegation had correctly assumed that NGO A had received them.

44. The position of the Commission, as regards what it understands to be a request for public access to documents, is problematic, from a strictly formal perspective.

45. The purpose of the consultation with a third party under Article 4(4) of the Regulation is to verify whether an exception under Article 4(1) and 4(2) of the Regulation applies as regards the public disclosure of the documents (for example, the consultation with a third party that has submitted documents to the Commission may seek to verify whether the release of the documents would undermine the protection of privacy and personal data under Article 4(1) of the Regulation, or whether the release of the documents would undermine the protection of commercial interests under Article 4(2) of the Regulation). The Commission, however, seems to have refused what it now considers to be a request for public access to documents on the grounds that 1) some of the documents at issue were already given to NGO A by the Beneficiary, and 2) NGO A could request any further information/documents from the Beneficiary at any time. The Ombudsman notes, however, that it is clearly not consistent with the wording and the purpose of the Regulation for the Commission to have refused one party (the complainant) a request for public access to documents held by the Commission on the basis that the third party that submitted the documents to the Commission (the Beneficiary) had given or was willing to give those documents to another third party (NGO A). If the Commission wished to refuse a request for public access to those documents, it should, the Ombudsman underlines, have invoked one or more of the exceptions under Article 4 of the Regulation (it is, the Ombudsman observes, quite likely that public access to documents relating to the commercial relationship between NGO A and the Beneficiary could be legitimately refused).

46. If the Ombudsman accepts the Commission's view that the complainant made a request for public access to documents under Regulation 1049/2001, the Ombudsman must also note that the complainant seems to have made only one request to the Commission for "access to documents". It did not, subsequent to the refusal to grant that request, make a confirmatory request for disclosure of the documents. The Ombudsman points out, in this respect, that if an applicant seeking public access to documents is refused access to those documents, the applicant must submit a confirmatory application before he or she may turn to the Ombudsman or the General Court concerning the refusal to grant access to those documents. Thus, again from a strictly formal point of view, the Ombudsman notes that the complainant appears to have made no confirmatory application for the documents at issue. Furthermore, in its observations of 29 May 2011, the complainant indicated that, thanks to the Delegation's intervention, it had obtained a copy of the documents from the Beneficiary concerning the implementation of the project. In light of all of the above, the Ombudsman considers that no further inquires are justified with respect to any refusal to grant public access to the documents at issue.

47. As regards the separate requests for access to information, the Ombudsman notes that the Commission first took the necessary steps to verify whether NGO A had received all the relevant information from the Beneficiary. He also notes that the Commission invited the complainant to meet with it to allow it better to explain the issues to the complainant. In this context, the Ombudsman considers that no further inquires are justified as regards this allegation and the related claim.

C. Conclusions

On the basis of her inquiry into this complaint, the Ombudsman closes it with the following conclusions:

As regards the first allegation and claim, there was no maladministration by the Commission

No further inquires are justified as regards the second allegation and claim.

The complainant and the Commission will be informed of this decision.

 

Emily O'Reilly

Done in Strasbourg on 11 November 2013

---

[1] http://www.ombudsman.europa.eu/resources/code.faces#/page/1

[2] The Ombudsman notes that, according to page 5 of the audit report, these two amounts added together (EUR 7 181.66 and EUR 15 300.68) correspond to the difference between the agreed budget (EUR 535 674) and the amounts already paid to NGO A (EUR 513 191.66).

[3] Regulation (EC) No 1049/2001 of the European Parliament and the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents, OJ 2001 L 145, p. 43.

[4] Article 339 TFEU states that "[t]he members of the institutions of the Union, the members of committees, and the officials and other servants of the Union shall be required, even after their duties have ceased, not to disclose information of the kind covered by the obligation of professional secrecy, in particular information about undertakings, their business relations or their cost components."

[5] Point 4 of the Commission's Code deals with communications with members of the public.

[6] Article 4(4) of Regulation 1049/2001 states that, as regards third-party documents, the institution shall consult the third party with a view to assessing whether an exception in paragraph 1 or 2 is applicable, unless it is clear that the document shall or shall not be disclosed.

[7] The Commission has in its possession narrative and financial reports submitted to it by the Beneficiary under the Grant Agreement. These provide a full account of all aspects regarding the implementation of the project.

[8] Point 16 of the Partnership Declaration between the Beneficiary and NGO A reads as follows: "[t]ous les partenaires doivent recevoir des copies des rapports - narratifs et financiers - présentés à la l'Administration contractante [the Commission]".