RESOLUTION (EU) 2018/1437 OF THE EUROPEAN PARLIAMENT

of 18 April 2018

with observations forming an integral part of the decision on discharge in respect of the implementation of the budget of the Bio-based Industries Joint Undertaking for the financial year 2016

THE EUROPEAN PARLIAMENT,

—	having regard to its decision on discharge in respect of the implementation of the budget of the Bio-based Industries Joint Undertaking for the financial year 2016,

—	having regard to Rule 94 of and Annex IV to its Rules of Procedure,

—	having regard to the report of the Committee on Budgetary Control (A8-0071/2018),

whereas the Bio-based Industries Joint Undertaking (the ‘Joint Undertaking’) was established as a public-private partnership by the Council Regulation (EU) No 560/2014 (1) for a period of 10 years with the aim of bringing together all relevant stakeholders and contributing to establishing the Union as a key player in research, demonstration and deployment of advanced bio-based products and biofuels;

whereas pursuant Articles 38 and 43 of the Joint Undertaking’s financial rules, adopted by the decision of its governing board on 14 October 2014, the Joint Undertaking is required to prepare and adopt its own annual accounts prepared by its accounting officer who is appointed by the governing board;

C.	whereas the founding members of the Joint Undertaking are the Union, represented by the Commission, and industrial partners, represented by the Bio-based Industries Consortium (the ‘BIC’);

General

Notes that the maximum Union contribution to the activities of the Joint Undertaking is EUR 975 000 000, to be paid from Horizon 2020; notes that the industry members of the Joint Undertaking are to contribute resources of at least EUR 2 730 000 000 over the period of establishment of the Joint Undertaking, consisting of at least EUR 975 000 000 of in-kind and cash contributions to the Joint Undertaking’s operational activities and at least EUR 1 755 000 000 of in-kind contributions to the Joint Undertaking’s additional activities;

Notes that 29 out of 65 retained proposals from the 2016 call for proposals were at the grant agreement preparation stage by the end of 2016; notes moreover that by early 2017 the Joint Undertaking programme will have a portfolio of 65 ongoing projects with a total of 729 participants from 30 countries with a total grant value of EUR 414 000 000;

Budget and financial management

Notes that the report of the Court of Auditors’ (the ‘Court’) on the annual accounts of the Joint Undertaking for the financial year 2016 (the ‘Court’s report’) finds the 2016 annual accounts of the Joint Undertaking to present fairly, in all material respects, its financial position on 31 December 2016 and the results of its operations and cash flows for the year then ended, in accordance with its Financial Regulation and with accounting rules adopted by the Commission’s accounting officer;

Notes that the Joint Undertaking’s annual accounts provide that the final 2016 budget is to be available for implementation and include commitment appropriations of EUR 194 295 870 and payment appropriations of EUR 67 196 187, the utilisation rates for commitment and payment appropriations of which were 97,1 % and 95,8 %, respectively;

Observes that the payment appropriations were used mainly for the pre-financing of grant agreements resulting from the 2014 and 2015 calls for proposals;

Notes that 10 grant agreements were signed for a total value of EUR 49 653 711 and three proposals were retained for funding in December 2015 for a total value of EUR 73 741 237;

Notes that no in-kind contributions were reported by members other than the Union to the Joint Undertaking by 31 December 2016; notes that the Joint Undertaking entered into its accounts the estimated in-kind contributions of EUR 7 833 127, based on estimates reported by 31 January 2017;

Expresses some concern that several industry members participating in Joint Undertaking's projects could not report their in-kind contributions by the given deadline, either because their own 2016 accounts were not yet closed, or because the projects had started close to the end of 2016; acknowledges that the reporting deadline of 31 January needs to be revised in the case of future legislative proposals to amend Regulation (EU) No 560/2014; acknowledges that in those cases, the Joint Undertaking applied Commission guidelines for accounting standards and made a pro-rata estimation on the basis of project costs; asks, however, that industry members find a way to capture their in-kind contributions to prevent recurrence of this problem;

Notes that out of the EUR 975 000 000 of Horizon 2020 funds allocated to the Joint Undertaking, by the end of 2016, the Joint Undertaking made commitments of EUR 414 300 000 (42,5 %) and payments of EUR 79 500 000 (8 % of the allocated funds) for the implementation of its first wave of projects;

10.

Expresses serious concern about the fact that out of the EUR 975 000 000 of contributions to be made by the industry members to the operational activities and administrative costs of the Joint Undertaking, industry members had reported in-kind contributions of only EUR 15 400 000 for operational activities, and the governing board had validated cash contributions by the members to the Joint Undertaking’s administrative costs of EUR 3 000 000; regrets the low level of in-kind contributions which stems from the fact that most Joint Undertaking’s projects were only in their preliminary stages in 2016; points out in this context that Regulation (EU) No 560/2014 establishing the Bio-based Industries Joint Undertaking was amended by Council Regulation (EU) 2018/121 (2) on 23 January 2018 with the aim of improving the level of private sector's financial contribution; calls on the Joint Undertaking to inform the discharge authority on the development of in-kind contributions and payments made;

11.

Regrets that, by the end of 2016, the total contribution from the industry members amounted to EUR 313 200 000, compared to the Union’s cash contribution of EUR 65 000 000 which stems from the fact that the industry members had already declared a significant amount of in-kind contributions to additional activities compared to the Union’s input; hopes that the situation will return to equilibrium in the following years;

Procurement and recruitment procedures

12.

Notes that by the end of 2016, the Joint Undertaking’s staff was almost complete, with 20 posts filled out of a total of 22 posts allocated to the Joint Undertaking by the staff establishment plan; welcomes the fact that the target set in the 2016 annual work programme was fully achieved, with the recruitment of 13 temporary agents and 8 contract agents coming from 10 Members States;

Internal audit

13.

Notes that on 11 April 2016, the governing board ratified the mission charter of the internal auditing service and, during July and August 2016, the internal auditing service carried out a risk assessment exercise covering the programme office’s major processes, both operational and administrative;

Internal control

14.

Expresses satisfaction of the fact that the programme office achieved all the priority objectives set in the Annual Work Programme 2016 for the internal control systems;

Legal framework

15.

Notes with appreciation that in 2016 the human resources function continued to strengthen the legal framework paying particular attention to the application of the implementing rules of the Commission to the Joint Undertaking; welcomes the fact that, in that respect, nine new implementing rules were adopted by the governing board in 2016;

Prevention and management of conflicts of interests and transparency

16.

Notes that following the adoption of an anti-fraud strategy by the Commission in June 2011, the first common research anti-fraud strategy was adopted in July 2012, and updated in March 2015 to take account of changes introduced by Horizon 2020; welcomes the fact that the research anti-fraud strategy includes an action plan to be implemented in cooperation with all the members of the research family;

Communication

17.

Recognises the need for the Joint Undertaking to communicate with Union citizens, through the Union institutions, concerning the significant research and collaboration that it is undertaking; stresses the importance of highlighting the real improvements achieved as a consequence of its work, which are an important part of its mandate, as well as the fact that it works with other joint undertakings in promoting public awareness of the benefits of their work;

18.

Calls on the Commission to ensure the direct involvement of the Joint Undertaking in the process of the Horizon 2020 mid-term review in the sphere of the further simplification and harmonisation of joint undertakings.

(1) Council Regulation (EU) No 560/2014 of 6 May 2014 establishing the Bio-based Industries Joint Undertaking (OJ L 169, 7.6.2014, p. 130).

(2) Council Regulation (EU) 2018/121 of 23 January 2018 amending Regulation (EU) No 560/2014 establishing the Bio-based Industries Joint Undertaking (OJ L 22, 26.1.2018, p. 1).