52006SC1226

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Brussels, 12.10.2006

SEC(2006) 1226

COMMISSION STAFF WORKING DOCUMENT

Accompanying the COMMUNICATION FROM THE COMMISSION Report on the International Fund for Ireland pursuant to Article 5 of Council Regulation (EC) No 177/2005 {COM(2006) 563 final}

LIST OF ANNEXES

ANNEX I Council Regulation (EC) No 177/2005

ANNEX II Agreement establishing the IFI

ANNEX III Participants in Board Meetings and responsibilities

ANNEX IV Corporate governance - structure & framework

ANNEX V Rules of procedure and operating rules of the board

ANNEX VI List of Projects which have received aid from the IFI (July 2003 – December 2005)

ANNEX VII Donor Contributions

ANNEX VIII Fund Programmes

ANNEX I

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ANNEX IIAGREEMENTBETWEEN THE GOVERNMENT OF GREAT BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF IRELAND CONCERNING THE INTERNATIONAL FUND FOR IRELAND [1]

The Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Ireland:

Desiring to promote the economic and social development of those areas of both parts of Ireland which have suffered most severely from the consequences of instability and to secure international support for this work;

Recognising that an international Fund is an important expression of international support for the shared commitment to peace, stability, dialogue and reconciliation in the island of Ireland and for the successful implementation of the Multi-Party Agreement, reached at Belfast on 10 April 1998;

Recognising that serious under-employment and multiple deprivation create an environment in which instability can flourish, and that instability and conflict in turn create conditions which are inimical to social and economic progress;

Recognising the damage caused to both parts of Ireland by that instability;

Have agreed as follows:

ARTICLE 1

The International Fund for Ireland is hereby established by the two Governments for the purposes and in the manner set out in this Agreement.

ARTICLE 2

The objectives of the Fund are to promote economic and social advance and to encourage contact, dialogue and reconciliation between nationalists and unionists throughout Ireland.

ARTICLE 3

In pursuance of these objectives, the Fund shall stimulate private investment and enterprise, supplement public programmes and encourage voluntary effort, including self-help schemes. In the voluntary sphere, special emphasis shall be placed on supporting economic and social projects sponsored by men and women of goodwill throughout Ireland who are engaged in the task of communal reconciliation. The need to maximise the economic and social benefits of the Fund in Ireland shall be an overriding consideration in making disbursements from its resources and these disbursements shall be consistent with the economic and social policies and priorities of the respective Governments. Because of the special problems in Northern Ireland associated with the instability of recent years, approximately three-quarters of the resources of the Fund shall be spent there.

ARTICLE 4

In accordance with the objectives and criteria set out above, the Fund shall give priority on a value for money basis to the following:

the stimulation of private sector investment, in particular by means of venture capital arrangements using some of the resources of the Fund;

projects of benefit to people in both parts of Ireland, for example, improved communications and greater co-operation in the economic, educational and research fields;

projects to improve the quality and conditions of life for people in areas facing serious economic and/or social problems. Spending will be carefully targetted to need needs arising from factors such as high unemployment, under-developed social, health or education facilities, poor environment and sub-standard infrastructures;

projects to provide wider horizons for people from both traditions in Ireland including opportunities for industrial training and work experience overseas.

ARTICLE 5

The Fund is established as an international organisation of which the two Governments are members.

The Fund shall have legal personality. Its legal capacity shall include the capacity to contract, to acquire and dispose of property and to institute legal proceedings. In particular it shall have power to enter into agreements with any donor consistent with the provisions of this Agreement provided that neither Government has indicated any objection. The Fund shall be exempt from the payment of direct taxes.

ARTICLE 6

The Fund shall have as its sole principal organ a Board which will consist of a Chairman and not less than six other members. The Chairman and other members of the Board shall be appointed jointly by the two Governments. They shall serve on terms and conditions decided by the two Governments. Donors if they so wish may send observers to participate in Board meetings. The decisions of the Board shall be taken by a majority. The Board shall, subject to the approval of the two Governments, establish rules of procedure and operating rules. Under these rules, a power of the Board may be delegated to one or more of its members. Subject to this Agreement, the members of the Board shall act independently and shall not receive instructions from Governments as to the exercise of their powers.

ARTICLE 7

The Board shall consider applications for assistance from the resources of the Fund and, if the Board is satisfied that they fall within the purposes set out above, may authorise grants and loans to any authority or any person or association for the purposes set out in the foregoing Articles. The Fund shall also provide resources for the establishment of the two companies referred to in Article 9 below.

ARTICLE 8

The Fund may contribute to the resources of existing bodies specialising in the provision of venture capital to be used for purposes within Article 4 of this Agreement.

ARTICLE 9

The Fund shall also provide money for and initiate the establishment of two Investment Companies, one to be established in each part of Ireland, with a significant number of common directors and similar objectives, whose function will be to furnish venture capital for the private sector. Persons of established commercial experience especially in the international field shall be invited by the Board of the Fund to participate in the management of these Companies. Each of these Companies shall be concerned with ventures primarily in one of the two parts of Ireland and shall be registered there: but in appropriate cases, they may both support a venture or enterprise. The Companies shall identify the risk capital needs for ventures of existing or new industrial and commercial enterprises and will provide, on sound commercial criteria, equity capital or loans. The aim of the Companies shall be further to stimulate viable and self-sustaining growth in the private sector of the economies of both parts of Ireland.

ARTICLE 10

The Board shall be assisted by an Advisory Committee composed of representatives of the two Governments, in particular as regards all applications made to the Fund under Article 7. Representatives of the British Government shall include officials representing Northern Ireland Departments. The accommodation and secretarial services necessary for the proper functioning of the Fund, together with its general administrative and organisational expenses, shall be provided jointly by the two Governments.

ARTICLE 11

The Board shall appoint auditors who will annually audit the accounts of the Fund. The report of the auditors shall be published.

ARTICLE 12

The Board shall present annually a report to the two Governments, to the Northern Ireland Assembly and to donors to the Fund.

ARTICLE 13

This Agreement may be amended by a further Agreement between the two Governments.

ARTICLE 14

This Agreement shall enter into force on the date on which the two Governments exchange notifications of their acceptance of it except that Article 5(2) shall become effective only after the completion of any remaining steps necessary in that connection.1 The Agreement shall continue in force until terminated by mutual agreement or by one Government giving the other six months’ written notice, and thereafter shall remain in force for as long as and to the extent necessary for an orderly disposal of any remaining assets of the Fund in accordance with the spirit of the Agreement in full consultation with the donors.

In witness whereof the undersigned2, being duly authorised thereto by their respective Governments, have signed this Agreement.

Done in two originals at both London and Dublin on the 18th day of September 1986.

For the Government of the United Kingdom For the Government of the Republic

of Great Britain and Northern Ireland:of Ireland:

GEOFFREY HOWE, NOEL DORR

ANNEX III BOARD PARTICIPANTS INCLUDING THE RESPONSIBILITIES OF THE DBMs APPENDIX C BOARD MEMBERS AND OBSERVERS

Members of the Board – Appointed 1 March 2003

Mr William T McCarter – Chairman to February 2005

Mr Denis Rooney – Chairman from March 2005

Mr Jackie Hewitt

Miss Helen Kirkpatrick

Ms Carmel Lynch

Mr John McDaid

Mr Eugene Murtagh

Ms Deirdre Ryan

Observers to the Board

Mr Jose Palma Andres (European Union)

The Rt Hon Jonathan Hunt (New Zealand)

His Excellency Dr John Joseph Herron (Australia)

Mr Robert Waters (United States of America)

Mr Cameron Millikin (Canada)

JOINT DIRECTORS GENERAL

Ms Orla O’Hanrahan (Dublin Secretariat) to September 2004

Mr Niall Burgess (Dublin Secretariat) to September 2005

Ms Maeve Collins (Dublin Secretariat) from September 2005

Mr Alexander Smith (Sandy) (Belfast Secretariat)

Joint Chairmen of Advisory Committee

Mr John Hunter (North)

Mr Brendan Scannell (South) to September 2005

Mr Patrick Hennessy (South) from September 2005

APPENDIX C

ALLOCATION OF DESIGNATED BOARD MEMBERS

Public Relations Chairman

Mr Murtagh

Audit Committee Miss Kirkpatrick

Ms Ryan

Mr McDaid

Investments Management Chairman

Mr McDaid

Disadvantaged Areas Initiative Mr Hewitt

(including Rural Development) Miss Kirkpatrick

Ms Ryan

Communities Initiative Mr Hewitt

Ms Lynch

Mr McDaid

Urban Development Mr Hewitt

Miss Kirkpatrick

Ms Ryan

Business Enterprise & Technology Mr McDaid

Ms Lynch

Mr Murtagh

Tourism Ms Ryan

Miss Kirkpatrick

Mr Murtagh

Wider Horizons Mr Hewitt

Ms Ryan

Mr Murtagh

Flagships Mr McDaid

Ms Lynch

Enterprise Equity Boards Chairman

Miss Kirkpatrick

Mr Hewitt

Mr McDaid

Ms Lynch

Ms Ryan

Mr Murtagh

ANNEX IV CORPORATE GOVERNANCE - STRUCTURE & FRAMEWORK

Appendix 1

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ANNEX V

Appendix 2

INTERNATIONAL FUND FOR IRELAND RULES OF PROCEDURE AND OPERATING RULES OF THE BOARD

(including Accounting Arrangements and Reports as Adopted by Successive Boards under the Terms of Article 6 of the Agreement to Establish the Fund)

The Board

1. In accordance with Article 6 of the agreement, the Board will consist of a Chairman and not less than six other Members.

Appointment to the Board

2. Information relating to this matter is included in the document “Terms and Conditions of Appointment of Board Members,” which has been prepared by the two Governments in accordance with Article 6 of the Agreement establishing the Fund.

Delegated Authority

3. Information relating to the delegation of powers to individual Board Members is included in the document “Designated Board Members – Terms of Reference & Rules of Procedure and Operating Rules” within the document Arrangements and Internal control Procedures (AICP) Appendix 4.

Representation on the Boards of Fund Related Projects (Third Party Boards)

4. Information relating to this matter is included in the document “Code of Conduct for Board Members of the International Fund – Integrity,” within the document Arrangements and Internal Control Procedures (AICP) Appendix 7.

Declaration of Interests

5. Information relating to this matter is included in the document “Code of Conduct for Board Members of the International Fund – Integrity,” within the document Arrangements and Internal Control Procedures (AICP) Appendix 7.

Confidentiality

6. Information relating to this matter is included in the document “Code of Conduct for Board Members and Observers of the International Fund – Integrity,” within the document Arrangements and Internal control Procedures (AICP) Appendix 7.

Investment Companies

7. Article 9 of the Agreement establishing the Fund provides for the establishment of investment companies in each part of Ireland. The Board Members, representing the Fund as the shareholder of such investment companies may, at their discretion, assume the role of Directors of an investment company including all statutory obligations incumbent with the role of Director.

Donors and Observers

8. The Board will allow one Observer nominated by each donor country to participate fully in its meetings, save that Observers will not have a right to vote. Each Observer will receive a copy of all documentation supplied to Members of the Board.

Board Meetings

9. The Board will hold at least two meetings each year and will also hold such other meetings as may be necessary for the due performance of its functions.

10. Meetings of the Board will be convened by the Chairman either at his/her own initiative or at the request of not less than three ordinary Board Members.

11. The Board will normally hold meetings alternately in both parts of Ireland.

12. Not less than seven days before every meeting of the Board the Joint Directors General will, following consultation with the Chairman, send to each Member of the Board, written notice of the date, time and place of meeting together with, as far as practicable, the agenda for the meeting, and necessary accompanying papers. However, if the Chairman and four Members agree, a meeting may be held on less than seven days’ notice.

13. A quorum will normally consist of four Members. In cases where more than one Member declares an interest in the matter for decision the quorum will be reduced to three.

14. The Board may act notwithstanding one or more vacancies in the membership.

15. Decisions of the Board must be approved by not less than four Members, save when more than one Member declares an interest in the matter for decision. The declaration of an interest will be in accordance with the document - Code of Conduct for Board Members and Observers of the International Fund – Integrity. In such cases not less than three Members of the Board must approve decisions.

16. The Chairman of the Board will chair every meeting of the Board at which he is present unless he retires from the chair during discussion of any business in respect of which he has declared an interest.

17. In the event of a tied vote the Chairman of the Board will cast the deciding vote.

18. The Board may appoint from amongst its Members one or more Members who shall chair any meeting at which the Chairman is not present, or part of a meeting where he/she has retired on declaring an interest; and, if more than one, such Board Members shall alternate in the chair.

19. A resolution in writing signed by all the Members of the Board entitled to receive notice of a meeting of Board Members or of a committee of Board Members shall be as valid and effectual as if it had been passed at a meeting of Board Members or (as the case may be) a committee of Board Members duly convened and held and may consist of several documents in the like form each signed by one or more Members of the Board.

20. A Board Member shall not be counted in the quorum present at a meeting in relation to a resolution on which he is not entitled to vote.

21. If a question arises at a meeting of Members of the Board or of a committee of Board Members as to the right of a Board Member to vote, the question may, before the conclusion of the meeting, be referred to the Chairman of the meeting and his ruling in relation to any Board Member other than himself shall be final and conclusive.

22. Written minutes, containing a record of the decisions taken at each meeting of the Board, will be prepared by the Joint Directors General and circulated to each Member as soon as possible after each meeting of the Board for approval at the next meeting.

23. The approval of the Board will be authenticated by the signature of two of its Members or as the Board may decide.

Advisory Committee

24. Article 10 of the Agreement to establish the Fund (the Agreement) states:-

“The Board shall be assisted by an Advisory Committee composed of representatives of the two Governments, in particular as regards all applications made to the Fund under Article 7.”

25. Article 6 of the Agreement to establish the Fund states; -

“Subject to this Agreement, the Members of the Board shall act independently and shall not receive instructions from Governments as to the exercise of their powers.”

Secretarial Arrangements

26. Information relating to the role of the Secretariat is included in the document “The Secretariat - Terms of Reference & Key Tasks and Operating Rules,” within the document Arrangements and Internal control Procedures (AICP) Appendix 8.

Applications to the Fund

27. The Board will invite applications for assistance to the Fund through open advertisement or otherwise agree on the form in which applications will be invited and considered.

28. The Board will agree on the manner in which applications for assistance from the Fund will be assessed and authorised for assistance. All applications authorised for assistance from the Fund will be consistent with the objectives of the Fund as outlined in Article 2 of the Agreement to establish the Fund.

29. The Board shall issue grants and loans from the Fund in accordance with the provisions of Articles 3 and 4 of the Agreement and with regard to the expressed wishes of the donors to the Fund and to the economic and social policies of the two Governments.

30. The Board shall administer grants and loans from the Fund which may include part-funding a project when it is satisfied that adequate arrangements have been made in respect of the balance of the financing. This may also include determining arrangements for the return of grants in the event that recipients fail to comply with the conditions which the grant or loan was subject.

Appeal Procedure

31. The Board has adopted an appeal procedure to deal with grievances from applicants in relation to the Board’s decisions.

32. The procedure will operate as follows:-

(a) the case will be referred to the relevant agent to examine the background to the applicant’s appeal taking into account all the facts of the case;

(b) the agents will make a submission to the DBMs explaining the full facts of the case, the basis for the initial recommendation and, if considered appropriate a revised recommendation, taking into account any further information that may require the initial decision to be confirmed or altered;

(c) the Joint Directors General will have a role in ensuring that all the points relevant to the applicant’s grievance have been taken into account in the agent’s submission to the DBMs;

(d) the DBMs may decide to confirm or alter their initial recommendation or decision if the case has been dealt with under delegated authority; and

(e) all decisions taken by the DBMs under the appeal procedure will be passed to the Chairman with appropriate documentation for his ratification.

33. The Board may also use consultants to assist in its work and the costs will be borne by the Fund.

Accounting Arrangements and Audit

34. Accounting arrangements and audit will be the responsibility of the Audit Committee which will report to the Board.

35. The Board will adopt a policy of self assessment to analyse its performance and management structure, in the context of the Fund’s needs. This will be undertaken biennially in a form considered appropriate by the Board having regard to the corporate demands existing at that time.

Summary

36. These rules may be amended by majority vote at any meeting of the Board provided that Members of the Board and Observers receive the text of the proposed amendment in writing not less than seven days in advance of the meeting. All proposed amendments must first obtain the approval of the two Governments in accordance with Article 6 of the Agreement to establish the Fund.

Reports

37. Reports of the activities of the Fund together with the audited accounts will be supplied annually to the United Kingdom and Irish Governments and to donors of the Fund and will be published. These reports will, inter alia, indicate the impact of the Fund’s activities on meeting its objectives as set out in Article 2 of the Agreement to establish the Fund.

38. Other reports may be made at any time at the request of any of the Governments concerned including the Governments of donor countries or at the discretion of the Board

ANNEX VI

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ANNEX VII DONOR CONTRIBUTIONS

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ANNEX III FUND PROGRAMMES

Regeneration of Deprived Areas

This is a series of community-led and economically focused programmes that target the most disadvantaged areas.

- Community Regeneration Improvement Special Programme (CRISP) – was designed to empower local communities on a cross-community basis to stimulate the economic and physical regeneration of the most disadvantaged small towns and villages in Northern Ireland. This Programme is closed to new applications.

- Border Towns and Villages (BTV) – operates in the Southern border counties and aims through the development of a core economic project to assist the regeneration of towns and villages that have suffered from the instability of recent years.

- Rural Development Programme (RDP) – supports community driven projects that contribute towards community capacity building, preferably on a cross community basis, economic and social regeneration and strengthen the long term sustainability of community organisations.

- Special Projects – these are projects of a particular merit that contribute towards the Fund’s overall objectives and for which there is no specific programme of support.

COMMUNITY CAPACITY BUILDING

This series of programmes seeks to build capacity within the wider community, particularly in the most disadvantaged areas.

- Community Leadership Programme – is designed to put in place the foundations for the regeneration of the most disadvantaged and underdeveloped areas. It provides accredited training, mentoring support and practical learning opportunities to groups who wish to improve their local communities and require assistance to start the process of community development. The current 4 year phase, involving 130 groups, ended in late 2005 and a new phase is being designed.

- Communities in Transition – is designed to provide the resources and support necessary to initiate community-led development programmes in 10 areas suffering from weak community infrastructure, community tensions and marginalisation.

- Community Bridges Programme – supports organisations delivering projects with the potential to make a significant contribution to reconciliation and the emergence of a shared and peaceful future on the island.

- Wider Horizons Programme – offers disadvantaged young people, aged 18-28, from the two traditions in Northern Ireland and young people from Ireland the opportunity to improve their employment prospects through the provision of training and work experience at home and abroad and promotes mutual understanding and reconciliation between participants.

- Knowledge through Enterprise for Youth (KEY) Programme – brings together 900 14-16 year old pupils each year from schools in disadvantaged areas in Northern Ireland and the Southern border counties. The two communities in the North and the South are represented in equal numbers. The Programme fosters mutual understanding, personal development and enterprise awareness. Each participant spends a total of 14 days at residentials.

- Learning and Educating Together (LET) Programme – brings together 300 12-13 year old pupils each year from schools in disadvantaged areas in Northern Ireland and the Southern border counties. The two communities in Northern Ireland and the South are represented in equal numbers. Each participant spends a total of 11 days at residentials which focus on personal development, business awareness and mutual understanding.

- Integrating Education – this supports work aimed at identifying best practice in integrated schools and at introducing elements more widely across the whole education sector.

- Community Development – is designed to build the capacity of isolated communities by providing leadership training and help to form new community groups. The provision of dedicated community facilities may also be assisted.

ECONOMIC DEVELOPMENT

- Business Enterprise Programme – the principal aim is the creation of conditions to enable enterprise and business opportunities to flourish particularly within the not for profit and social economy sectors located in disadvantaged areas. Since 2005 the Programme has placed an increasing emphasis on support for cross community, not for profit organisations with a background in reconciliation work. This process contributes significantly to the economic objective of the Fund as well as encouraging contact, dialogue and reconciliation between nationalists and unionists throughout Ireland.

- NEWRADIANE (Research and Development between Ireland and North America or Europe) – this pilot programme was closed to new applications during 2005 because the Board decided to terminate purely economic initiatives in favour of those with a greater emphasis on contact, dialogue and reconciliation.

- Tourism Programme – the overall aim is to encourage economic regeneration by stimulating private sector investment in the provision and upgrading of tourist amenities, through supporting tourism marketing initiatives and staff development, creating job opportunities and encouraging cross-community and cross-border communication throughout the twelve counties of the Fund’s responsibility.

- Urban Development Programme – aimed to generate economic activity in the commercial centres of towns and villages by encouraging the owners of vacant and derelict properties, particularly in the disadvantaged areas, to develop them for economic purposes. The Fund’s greater emphasis on reconciliation projects resulted in the closure of this Programme in February 2004 with final cases being considered by the Board at its December 2005 meeting.

- Community Property Development Scheme (CPDS) – sought to remove dereliction and create employment in towns and villages that were suffering from an above average level of vacant properties, blight and unemployment. Through the generation of a rental income, the longer term sustainability of the community group was strengthened. This Programme closed to new applications in 2004.

- Second Community Projects Programme – built on successful CERS, CRISP and CPDS projects by encouraging community groups to develop a second economic project, thereby enhancing their long term viability. This Programme closed to new applications in 2004.

In addition, the IFI operates a Flagships Programme that considers a small number of major projects of symbolic importance for the island as a whole and which have the potential to make a significant contribution to social and economic regeneration.

Investment Companies – The Fund’s founding agreement requires the Fund to establish two Investment Companies, one in each part of Ireland. The investment companies, Enterprise Equity (NI) Limited based in Belfast and Enterprise Equity (Irl) Limited based in Dundalk, Galway and Cork provide venture capital to new and expanding businesses in Northern Ireland and in regional areas in Ireland. Enterprise Equity (Irl) Limited has a Joint Venture with Enterprise Ireland, Enterprise Equity Investment Fund Limited.

[1] CONSOLIDATED WORKING COPY AS AMENDED 10 OCTOBER 2000

1 The Agreement entered into force on 1 December 1986.

2 The Agreement was signed in Dublin by PAEDAR de BORRA (PETER BARRY) and R.F. STIMSON