Lean Governance Working Group
Legal contribution 1
Reflections on the legal organisation of the EUREKA and the EUREKA Secretariat AISBL
‘May the strength be given to me to bear what cannot be changed
And the courage to change what can be,
but also the wisdom to distinguish one from the other.’
Excerpt from ‘Meditations’ by Marcus Aurelius,
(121 to 180 AD)
Introduction
This note is intended for members of the Lean Governance Working Group (WG) in the context of the discussions initiated by the Swedish Chairmanship on the reforms that should be undertaken to improve the governance of EUREKA. This note is based on the texts cited in Annex 1 and will not address the implementation of any programmes (including the Eurostars programme).
At the second meeting of the WG, held on 6 November 2015, its members have focused on the analysis of the findings of the brainstorming held in Gothenburg (21 October 2015). The WG requested the Secretariat to conduct a legal analysis of the system putting forward, if necessary, the inconsistencies and flaws of the existing legal system under EUREKA governance.
To clearly distinguish for the reader the different topics covered in this note, a clarification of vocabulary is necessary:
- EUREKA: The entire organisation and the programmes that have been created by its State parties following the Paris Communiqué (17 July 1985).
- Political organisation: The decision-making hierarchy, making decisions on behalf of EUREKA (Ministerial Conference, High-Level Group) and not belonging to the AISBL.
- AISBL: (‘association internationale sans but lucratif’) the international non-profit association called ‘EUREKA Secretariat AISBL’.
- By Governance we refer to a general definition: governance is the set of measures and rules adopted by decision-making, information and surveillance bodies, which ensure the proper functioning and control of a state, an institution or an organisation, be it public or private.
Good governance is based on four basic principles: accountability, transparency, rule of law and participation.
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The analysis of the scheme of governance EUREKA stems from its legal status and the decision-making system that has been in place for 30 years. The superposition of the texts and decisions has resulted in a somewhat ambiguous structure that is open to interpretation.
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Contents
Introduction 2
A. EUREKA: an organisation of uncertain nature 4
1. Political statements 4
a) Paris Communiqué 4
b) Hanover Declaration 4
2. The founding texts 4
a) Memorandum of Understanding (MoU) 4
b) The Statutes of the EUREKA Secretariat (Annex 4) 5
B. EUREKA governance: a dual system 7
1. Bicephalous governance: a dual system 7
a) Neutralization of the exercise of powers of the General Assembly 7
b) Imperfect subordination of the Association to EUREKA decisions 8
2. Monocephalic governance 9
a) The weight of member countries and their representatives 10
b) The ‘triangle’ Chairman - Head of Secretariat - Secretariat (Annex A) 11
C. Fortunes and misfortunes of EUREKA governance 12
1. Formal confusions 12
a) Semantics 12
b) Editorial approximation 12
2. Procedural confusions (Annex 7) 13
a) Uncertainty over the division of powers 13
b) Confusion over implementation procedures 13
D. Conclusion 15
1. Minimalist position: revision of texts without changing the current situation 15
2. Maximalist position: consolidation of texts 15
3. Middle-road position: Minor reform of the streamlining of decision making 15
A. EUREKA: an organisation of uncertain nature
1. Political statements
EUREKA was born in Paris and its structure was specified in Hanover.
a) Paris Communiqué
EUREKA was established by a single release (Final Communiqué of the European Assises of Technology of 17 July 1985). The text specifies the date of the creation of EUREKA; the goal of EUERKA (the development of high technology for civilian purpose); its role (the selection of projects proposed by industry and research centres); the remainder of the text refers to a subsequent ministerial meeting to resolve issues related to this new organisation called EUREKA.
This text, akin to a declaration, is the manifestation of the will of the parties present[1] to cooperate, together and in a coordinated manner, to stimulate innovation in Europe. Officially, legal value can only be given to the Paris Communiqué in terms of it being an affirmation of a collective will, attested by the presence of the 17 foreign ministers along with their research ministerial colleagues. The description of this will remain fairly brief (Annex 2).
b) Hanover Declaration
The Hanover Declaration completes the Paris Communiqué (Declaration of Principles of EUREKA, 6 November 1985). It specifies the objectives, characteristics and criteria of projects, it poses the administrative framework (a small and flexible EUREKA Secretariat acting under the responsibility of the Ministerial Conference) and outlines the chain of decision-making (EUREKA Ministerial Conference, high-level representatives - HLRs).
The wording of the text is more precise than that of Paris Communiqué, but as the title indicates, the document remains a statement which formulates principles. It appears more as a political text than a legally binding one.
2. The founding texts
A third text is necessary - the MoU of 1986, along with the Statutes of the EUREKA Secretariat in 1987, to lay the solid and concrete foundations for EUREKA.
a) Memorandum of Understanding (MoU)
This is the first text to which any new member state of the European continent[2] adhering to EUREKA must swear allegiance[3].
The 1986 MoU[4] and the two successive MoU (1992 and 1997), constitute reference texts establishing the basis of the EUREKA system and its operating logic. It creates an administration - the Secretariat - to support the initiatives of member countries. The MOU of 1997 (current) is structured as follows: definition of objectives, structure and organisation of the Secretariat of EUREKA.
The legal nature of the MOU was discussed in 2014 at HLG Bergen. It is signed by all the research ministers of the member countries present at the Ministerial Conference in 1986, and its signature is the starting point for any new application for membership.
Can it be treated as an international treaty within the definition of the Vienna Convention of 1969 on the law of treaties in the absence of national ratification and the depositing of the MoU to the Secretariat-General of the United Nations? Some representatives formally rejected the possibility of such a conclusion after consultation with the legal department of their Ministry of Foreign Affairs (Annex 3). The representative of the Belgian Ministry of Foreign Affairs (CIP[5]), estimated that, in the event that EUREKA could not rely on an international agreement, an intergovernmental organisation could claim its status as an international organisation with the Belgian authorities, by making a specific request, duly documented, to the Minister of Foreign Affairs. As this approach was not taken into consideration by the high-level group (HLG), EUREKA must be considered as an intergovernmental organisation incorporated outside of international law, despite the expression of willingness of the parties it reflects and the fact that it is by nature international.
b) The Statutes of the EUREKA Secretariat (Annex 4)
As members did not grant EUREKA the status of international organisation[6], it was decided to link the legal existence of its supportive administration to the national law of its member countries - Belgium. So the EUREKA Secretariat was born under the rules of Belgian law as an international non-profit association (AISBL)[7].
The articles follow the requirements of the Belgian Law for AISBL on structure and operations adapted to EUREKA’s needs, which can be found in the social definition of the Association (Article 3 of the Statutes). Four basic organs are established: a Chairman of the Association, a General Assembly, an Executive Board and a Head of the Secretariat. Their correlation is clear. Provisions on financial reliability (budget) and legal (representation) complement the Statutes.
Legal personality is essential for any organisation to accomplish its objectives. Hence the Royal Decree of 21 October 1986 granted legal personality to the Association.
The MoU (page 5, D (i)) anticipated that the Secretariat, an independent legal entity ‘AISBL’ under Belgian law, would have the power ‘to enter into contractual arrangements with suppliers of necessary goods and services’. The MoU sets the framework of the legal capacity of the Secretariat. Thus defined, this framework is quite restricted and is limited to contractual matters with its suppliers.
Strictly speaking, the text does not cover employment contracts, which are contracts that are not classified under the category of service contracts. Indeed, the ‘fathers’ of the Secretariat did not anticipate that it would consist of employees, but of seconded staff and a few locally-employed staff. This is no longer the case – since of 33 employees, 31 are under contract and only two are public servants seconded from EUREKA members: a secondee from the European Commission and another from a member country.
The writers of the MoU did not foresee that the Secretariat could become a service provider. Services for which it is paid within the limits prescribed for an AISBL. Thus, the delegation agreement signed by the Head of the Secretariat with the representative of the Commission was a first[8]. Recently, the ESE-Innovation Fund Denmark Agreement (IFD) extended this practice.
The Statutes do not specify the question of legal personality which should have been required in 1987 and is by law since the 2002 reform[9]. They indicate broadly enough (title VII ‘Commitments of the Association’) that ‘acts binding the Association outside its daily management are signed either by the Chairman of the Executive Board or, failing that, by an Executive Board member appointed by him for this purpose, or by the Head of the Secretariat to whom the Executive Board has delegated special powers and determined for this purpose.’
The Statutes provide an important clarification on the scope of the legal capacity of the Association, the right to sue. Title VIII ‘Representation of the Association’ provides that ‘the Chairman of the Executive Board represents the Association towards third parties’ and that ‘legal action or arbitration involving the Association, both as plaintiff or as defendant, are the responsibility of the Executive Board, represented by the Chairman or a member of the Executive Board designated for this purpose by the latter.’ This situation has unfortunately already presented itself and the AISBL had to appeal to the courts to challenge poorly-executed contracts (e.g. Plexus contract).
Although the MoU has been very discreet about the legal capacities of the Association, under Belgian law these are broad and allow the AISBL to enter into diverse agreements or arrangements with non-governmental organisations, intergovernmental and international organisations (global or regional). The competencies acquired by the Secretariat, especially in terms of project evaluation, has enabled it to develop.
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EUREKA has a dual nature: as an intergovernmental organisation operating according to its own rules and as an association under Belgian law subject to the legislation of its headquarters. This dual nature is directly reflected in its governance system.
B. EUREKA governance system
The joint decisions of the political organisation (Ministerial Conferences, HLG), the MoU and the Statutes, lead to the creation of a bicephalous system of legal governance, which is, in reality, a monocephalic governance system. It follows a complex governance system.
The soloist nature of the governance of EUREKA is the result of the identity of the members of the decision-making organs of the AISBL, as it is of the political organisation of EUREKA. The same representatives meet, depending on the subject being treated, in several different ‘mirror’ organs (High-Level Group/Executive Group and General Assembly/Executive Board) created under the aegis of the AISBL or of EUREKA. Decisions cannot in principle be contradictory and the overall coherence of the system is preserved.
The two-pronged system of legal governance proceeds from the Belgian legal status of the EUREKA Secretariat AISBL and of the sui generis nature of the MoU and the texts that complement it (Roles and Responsibilities, Membership and Association, decisions of the Ministerial Conferences).
1. Bicephalous governance: a dual system
The bicephalous governance, political subordination of the Association to EUREKA and its legal grounding in Belgian national law leads to paradoxical situations that should be analysed such as the neutralizing of powers of the General Assembly, the difficulties of transposing decisions taken in the HLG and constraints to Belgian law to which members of the Association are subject, mainly members of its Executive Board.
a) Neutralization of the exercise of powers of the General Assembly
When a subject concerns EUREKA and the Statutes of the AISBL, meetings of the General Assembly are short and decisions adopted by the preceding HLG are quickly endorsed. Thus, budgetary issues or decisions regarding changes in the Statutes of the AISBL, were first approved in the HLG, then in the General Assembly, without significant debate, the scenario in terms of decisions having already been agreed in the HLG.
The General Assembly meets, mostly, pro forma. In this respect, articles on the voting rules of the General Assembly may seem superfluous. The General Assembly is a ‘voiceless’ body, subject to the decisions of the HLG or the Ministerial Conference, even though they have no legal existence under the AISBL, without being completely unknown[10].
b) Imperfect subordination of the Association to EUREKA decisions
The text ‘Roles and Responsibilities’ decrees a politically subordinate relationship of the Association to EUREKA. In the description of the various bodies, it is stated that the Ministerial Conference is ‘the highest ranking body within EUREKA’, while the General Assembly is merely ‘the highest-level body of the Association.’
However, the Secretariat's role in the EUREKA system and the incorporation of its Statutes to Belgian law, leads to paradoxical situations regarding the transposition of EUREKA decisions and autonomy of operation.
The implementation of the decisions of EUREKA
Some decisions taken by the political organisation of EUREKA are implicitly transposed to the activities of the Secretariat. This can lead to paradoxes that should be resolved, such as those of associated countries.
Indeed, the status of associated countries had never been foreseen under any founding text. The Ministerial Conference, in Madrid in 2001, decided to expand EUREKA outside the geographical area defined by the Paris Communiqué and the Hanover Declaration. In accordance with Article 3 e), the Secretariat expanded its activities to associated countries without, however, the status of associated countries being recognised legally within in the Statutes of Association. In this respect, it could be argued that the Secretariat has activity in an area outside the law, while the de facto Association knows the existence of associated countries with the adoption of the budget in which are transcribed their financial participation.