Memorandum on Certification To Permit U.S. Contributions to the International Fund for Ireland

Presidential Determination No. 93-42

Memorandum for the Secretary of State

Pursuant to Section 5(c) of the Anglo-Irish Agreement Support Act of 1986 ( P.L. 99-415), I hereby determine and certify that: (1) the Board of the International Fund for Ireland as established pursuant to the Anglo-Irish Agreement of November 15, 1985, is, as a whole, broadly representative of the interests of the communities in Ireland and Northern Ireland; and (2) disbursements from the International Fund (a) will be distributed in accordance with the principle of equality of opportunity and nondiscrimination in employment, without regard to religious affiliation; and (b) will address the needs of both communities in Northern Ireland.

You are authorized and directed to transmit this determination and certification to the Congress, together with the Memorandum of Explanation, and to publish it in the Federal Register.

WILLIAM J. CLINTON

THE WHITE HOUSE,

Washington, September 30, 1993.

Memorandum of Explanation for Certification of the Fiscal Years 1992 and 1993 U.S. Contribution to the International Fund for Ireland

I. Introduction

This report has been prepared to comply with legislative requirements associated with the Anglo-Irish Agreement Support Act of 1986, Public Law 99-415 ("the Act").

Section 5(c) of the Act requires that each fiscal year, prior to contributions to the International Fund for Ireland (IFI), the President certify to the Congress that he is satisfied the following conditions have been met:

A. The Board of Directors of the International Fund for Ireland, as a whole, is broadly representative of the interests of the communities of Ireland and Northern Ireland;

B. Disbursements from the IFI:

1. will be distributed in accordance with the principle of equality of opportunity and nondiscrimination in employment, without regard to religious affiliation, and

2. will address the needs of both communities in Northern Ireland.

II. Background

A. Establishment and Operation of the Fund

The International Fund for Ireland ("the Fund") was formally established as an independent entity on December 12, 1986, in keeping with the provisions of the Anglo-Irish Agreement of November 15, 1985. The overall objectives of the Fund are to promote economic and social advancement and to encourage contact, dialogue, and reconciliation between nationalists and unionists throughout Ireland and Northern Ireland. The Anglo-Irish Agreement states that the Fund shall accomplish these objectives by stimulating private investment and encouraging voluntary efforts with special emphasis on projects promoting communal reconciliation. The Agreement also stipulated the establishment of two investment companies under the Fund.

The Fund is an independent entity which is administered by a Board of Directors appointed jointly by the British and Irish governments. The Board is guided by a Joint Advisory Committee consisting of senior civil servants drawn equally from Northern Ireland and Ireland. The Advisory Committee's principal role is to advise the Board on the economic and social policies and priorities of the two governments and to maximize the impact of assistance by avoiding duplication of activity. The Board is supported by a Secretariat composed of administrators from the two jurisdictions. The Secretariat is headed by two Joint Director Generals, one from each side. The Fund's operating expenses are paid by the British and Irish governments.

The Fund's activities are developed primarily through program teams in the following areas: Business Enterprise, Tourism, Urban Development, Agriculture and Rural Development, Science and Technology, and the Wider Horizons Program. These program teams are composed of an equal number of representatives from Northern Ireland and the Republic of Ireland. The teams are administered by joint chairmen who keep the Board of Directors apprised of their respective program teams' activities.

In an effort to focus on the more disadvantaged areas, the Fund directs 70-80 percent of the resources available in the program sectors to disadvantaged areas in Northern Ireland. The Fund also created four additional program schemes: Community Economic Regeneration, which focuses on community driven regeneration of economic activity in urban areas; Community Relations, designed to promote reconciliation; Disadvantaged Areas Special Projects; and, the Community Regeneration and Improvement Special Program (CRISP) designated for disadvantaged areas in Northern Ireland and focuses the Fund's resources on smaller towns and villages by linking a series of projects from the various program areas together.

B. Fund Contributions

The Fund receives contributions directly from bilateral and multilateral donors. U.S. obligations to date total $ 170 million. Under the Foreign Operations, Export Financing, and Related Programs Appropriations Act, Congress appropriated an additional $ 19.704 million in FY 1992 and $ 19.704 million in FY 1993. Since 1989, the European Community has disbursed 15 million European Currency Units (approximately US$ 20 million) per year to the Fund and will continue to contribute this amount until 1994. New Zealand contributed about $ 0.16 million in FY 1992 and Canada has provided approximately $ 0.39 million.

Each donor is entitled to appoint a representative to attend all Board meetings as a non-voting observer. Observers receive all Board papers and provide guidance to the Fund on behalf of their respective donor countries.

C. Program Implementation

Since its establishment in 1986, the Fund has approved a total of 2,263 projects and budgeted over $ 343 million to its various program areas. Some $ 284 million have been committed to approved projects within the various programs. The Fund has disbursed approximately $ 182 million to ongoing and completed projects, including $ 26 million to the two investment companies.

Individual project applications continue to represent a majority of the projects for funding. However, the program teams are assisting various communities in identifying and preparing proposals through regular contact and consultation with a number of area Economic Development Consultants. The Consultants serve as a point of contact for local communities, provide technical assistance and advice, and help to speed program implementation.

The Fund has put into place a computerized system of recording key data for the projects. Information, such as employment generation, leveraging, and geographical distribution of funds, is collected and logged into the new system. The information system has assisted the IFI in developing its capacity to analyze and report on the economic and social indicators of the Fund's achievements.

New disbursement procedures have also been established for the U.S. contribution to the Fund. In October 1992, A.I.D. established a Letter of Credit mechanism to meet the legislative requirement to disburse funds at the minimum rate necessary to make timely payments for projects and activities. The Letter of Credit has allowed the U.S. Government to exercise greater control over money distributed to the Fund by transferring resources only when needed, and thereby minimizing interest costs to the U.S. Treasury.

D. Job Creation and Additional Investment

Two elements identified as priorities of the U.S. Goverment in its contribution to the Fund are job creation and the leveraging of additional investment into the economy. Both elements have been adopted by the Fund in the implementation of its program.

The Fund agrees that job creation is an essential factor in determining the allocation of Fund resources and clearly places an emphasis on the job creation potential of each project considered for funding. The Fund estimates that its activities directly resulted in the creation of about 18,000 new jobs and indirectly resulted in the creation of an additional 7,300 jobs. Construction activities have also resulted in 8,300 person-years of temporary employment.

The Fund has also been successful in leveraging new investment. Of the $ 284 million of Fund resources committed to approved projects, another $ 297 million and $ 186 million of private and government resources, respectively, have been invested. Thus every dollar that the Fund has committed has resulted in an additional $ 1.70 committed from other sources.

III. Presidential Certification Elements

Each fiscal year, prior to the United States making a contribution to the Fund, the President must certify that he is satisfied that the Fund has complied with the legislative requirements in the Act. This Certification covers both the FY 1992 and FY 1993 contributions to the Fund. The following discusses the required elements.

A. Board Representation

The Board of Directors consists of seven members; three nominated by the British government, three nominated by the Irish government, and the Chairman. Board members are approved by both sides through consultations between the two governments. The Board, by design and agreement, is representative of the communities in both Northern Ireland and Ireland. The Board meets once every two months, primarily to review policy and procedural issues and to approve or reject proposals forwarded by the program teams for consideration. In addition, each Board member is responsible for coordinating with specific program teams and is consulted on a regular basis.

The Board members are as follows:

Mr. Willie McCarter, Chairman

Mr. John E. Craig

Mr. Paddy Duffy

Mr. Pat Kenny

Mrs. J. McCrum

Ms. C. Murphy

Mr. B.A. Slowey

The Chairman is a prominent businessman and Director of Fruit of the Loom, one of the largest employers in the Northwest with major factories located in Buncrana (Republic of Ireland) and Londonderry (Northern Ireland).

As in the past, the present Board is noted for its professionalism and integrity in setting policy and approving projects. The Board has taken a proactive role in promoting the Fund throughout Northern Ireland and Ireland as well as internationally.

B. Disbursements From the International Fund

The Fund's structure and policy framework ensure that resources are distributed in accordance with the principle of equality of opportunity and nondiscrimination in employment, without regard to religious affiliation, and that these resources address the needs of both communities in Northern Ireland and the six border counties of the Republic of Ireland.

The board has developed its policies for disbursement of resources taking into account the terms of the Agreement under which it was established, the wishes of the donor countries, and the need to supplement the economic and social policies of the two governments. The Board structure and policy framework is manifested in the internal checks and balances in the Fund's appraisal, approval, and management systems. Also, the wide geographical distribution of approved projects enhances the Fund's efforts to meet the needs of both communities. The Fund's programs have created jobs, leveraged private investments, and fostered reconciliation. In addition, the Fund has made concerted efforts to target the most disadvantaged areas through CRISP and other special programs as well as through the work of development consultants.

1. Distribution of disbursements in accordance with the principle of equality of opportunity and nondiscrimination in employment, without regard to religious affiliation.

a. Structure of the Fund. Ireland and Northern Ireland are equally represented by members of the Fund's Board of Directors, Advisory Committee, Secretariat, and Program Teams. These individuals are highly respected for their professional competence, integrity, and commitment to the Fund's objectives. The Advisory Committee, as mentioned above, is composed of senior officials of both the British and Irish governments and provides guidance and support for the Board. The Secretariat staff maintains the day-to-day operations of the Fund and have been carefully selected for their administrative skills and judgement. The Program Teams are staffed with technical and administrative professionals who are committed to the Fund's operating principles of non-discrimination. Review of the IFI portfolio of projects and visits to selected sites by Agency for International Development (A.I.D.) personnel has confirmed that the Fund has assembled a competent and professional staff who have cultivated and exercised sound project approval and management procedures.

b. Policy Framework. All Fund publications and solicitations for proposals clearly spell out the Fund's commitment to equality of opportunity and nondiscrimination. All successful applicants are required by the Board to agree to the following prior to receiving an award:

"Acceptance of a grant or loan under this scheme will be deemed to signify the applicant's acceptance of the principle of equality of opportunity and non-discrimination in employment, without regard to religious affiliation and that the applicant will be expected to use the money in accordance with this principle."

Letters of offer clearly state that any violation of this agreement will require immediate repayment of resources. To date, the Fund has not had to request repayment.

Equality of opportunity requirements are also enforced in Northern Ireland under the Fair Employment (Northern Ireland) Act of 1989. This Act makes employment discrimination on the grounds of religious belief or public opinion illegal. The Act is designed to eradicate job discrimination and ensure the active practice of fair employment opportunity throughout Northern Ireland.

c. Project Appraisal and Approval. The Fund has instituted a clear and systematic appraisal and approval system. Each Program Team has signed agreements with the Fund Secretariat which spell out the criteria upon which all applications are made. As mentioned above, the Program Teams consist of officials from various government agencies, both North and South, which, in close cooperation with the Secretariat, help to bring the programs to fruition. The Team members, chosen for their expertise in their particular sector, review each project based on its merit using standard economic and financial analysis tools, as well as criteria relevant to their technical field.

Projects must also be consistent with the economic and social policies and priorities of the British and Irish governments. Each government reserves the right to veto support for activities proposed which violate their stated policies. No resources are to be used, for example, to improve the standing of or to further the goals of any paramilitary organization, either directly or indirectly. The Fund, the British government, and the Irish government are, however, committed to supporting activities which contribute to viable, self-sustaining growth, prosperity, and stability. In addition, it is hoped that the projects will have a positive impact on increasing respect for human rights and fundamental freedoms for citizens of both traditions from Northern Ireland and the Republic.

Thus, within the Fund's policy guidelines and the established criteria for the evaluation and approval process, projects are accepted for funding, rejected, or forwarded to an appropriate government agency for possible support from existing government programs. Applications are processed in a timely and efficient manner, consistent with a proper and prudent review of projects. In addition, of course, a considerable responsibility rests with the individual promoters of projects who must take the lead in completing their share of the financial package and implementing the project to a stage where payment can be made.

Each decision to approve, disapprove, or forward a project to a government agency requires the recommendation of the relevant program team, the endorsement of the two Board members supervising the team, and the approval of the Fund Secretariat. Any projects which are controversial, raise policy issues, or exceed the program team's delegation of authority, are forwarded to the Board for consideration.

Equality of opportunity and nondiscrimination is the guiding principle under which the Fund operates. Projects are reviewed on merit alone, without regard to political or religious affiliations of the applicants. The cross-community composition of the Fund Board, the Secretariat, and the program teams ensures this principle.

2. Addressing the needs of both communities in Northern Ireland.

In order to comply with British law, the principles under which the Fund was established, and the U.S. Government priorities under which our contribution was made, religious affiliation is not a factor in the approval process. It is generally known, however, which religious majority is predominant within a specific geographical area.

During the program review visit by an A.I.D. official in May of 1992, management officials, community leaders, grantees, and program implementors were asked to comment on the extent to which the needs of both communities were being met. All respondents believed that every effort was being made to strengthen the cross-community nature of the programs. Many spoke of how, through Fund activities, they were able to experience for the first time a working or recreational experience with people of the opposite tradition. Such liaisons have produced cross-community boards of directors (under such organizations as the enterprise centers), cross-community enterprise matchmaking, cross-border joint ventures (such as the Derry-Galway-Boston Trade Fair), and genuine friendships. The civil servants of both governments in laboring together on the Fund have also developed excellent working, as well as personal, relationships with their counterparts. Such interaction contributes to reconciliation through dialogue and cooperation.

The Fund has made a concerted effort to direct assistance to the more economically disadvantaged areas. Special programs, such as CRISP, have been developed toward this end. The work of the development consultants is important in assisting the disadvantaged communities to develop ideas and proposals to help themselves through the Fund. The consultants participate in establishing local groups, ensure cross-community participation whenever possible, and assist groups in creating viable projects. In many cases, however, the IFI merely serves as a catalyst for community initiatives that have been developing independently of the Fund. The consultants are also instrumental in contributing to a greater overall understanding and positive perception of the Fund among the people of both communities.

IV. Conclusion

A review of Fund activities and a visit to Ireland and Northern Ireland by a senior A.I.D. officer confirms that the Board of Directors has maintained policies and procedures designed to ensure that both traditions benefit from Fund activities. The Board's operating principles ensure that project decisions are made on the basis of merit. In addition, it has been concluded that Fund resources are being distributed in a manner consistent with its mandate as stated above. All grantees are made aware of the principles of equality of opportunity and nondiscrimination in employment, stipulated by acceptance of any grant monies.

This report therefore concludes that:

The Board of Directors of the International Fund for Ireland, as a whole, is broadly representative of the interests of the communities in Ireland and Northern Ireland.

Monies from the Fund are distributed in accordance with the principle of equality of opportunity and nondiscrimination in employment, without regard to religious affiliation, and address the needs of both communities in Northern Ireland.

Appendix I.-Projects Approved, Program Allocations,

Commitments, and Disbursements

[$ Million]

Projects Projects IFI Committed Disbursed

approved program

budget

Rural 530 14,172 9,905 6,117

Development

Wider 236 26,055 21,110 21,491

Horizons

Business 232 56,454 48,042 37,353

Enterprise

Tourism 329 66,377 52,494 33,851

Urban 699 54,849 40,695 18,623

Development

Community 68 4,461 3,503 2,496

Relations

Disadvantag 49 49,317 41,544 10,740

ed Areas

Initiative

Special 29 11,208 10,241 8,456

Projects

Flagship 2 11,285 9,758 6,713

Projects

Science and 60 19,872 17,400 11,933

Technology

Sub-Total 2,234 314,050 254,692 157,773

Investment 29 29,468 29,468 24,468

Companies

Total 2,263 343,518 284,160 182,241

Appendix II.-Estimated Employment Generated

Projects Direct Indirect

Rural Development 704 270

Wider Horizons

Business Enterprise 5,259 1,770

Tourism 2,403 1,652

Urban Development 4,651 1,786

Community Relations 12 5

Disadvantaged Areas 2,157 706

Special Projects 1,623 383

Flagship Projects 561 42

Science and Technology 154 41

Sub-Total 17,524 6,655

Investment Companies 739 372

Total 17,963 7,327

Projects Construction Total

(man years)

Rural Development 259 1,233

Wider Horizons

Business Enterprise 1,156 8,185

Tourism 1,951 6,006

Urban Development 2,213 8,650

Community Relations 29 46

Disadvantaged Areas 1,389 4,252

Special Projects 122 2,128

Flagship Projects 1,072 1,675

Science and Technology 63 258

Sub-Total 8,254 32.433

Investment Companies 40 1,151

Total 8,294 33,584

Appendix III.-Amount Leveraged on Approved Projects

Commitments, and Disbursements

[$ Million]

Projects Private Government IFI Total

sector

Rural 11,835 4,740 9,905 26,480

Development

Wider 7,152 11,291 21,110 39,553

Horizons

Business 32,379 52,448 48,042 132,869

Enterprise

Tourism 94,062 1,206 52,494 147,762

Urban 90,012 5,525 40,695 136,232

Development

Community 7,989 2,805 3,503 14,297

Relations

Disadvantag 3,114 30,459 41,544 75,117

ed Areas

Special 10,155 15,809 10,241 36,205

Projects

Flagship 1,830 41,084 9,758 52,672

Projects

Science and 12,924 14,171 17,400 44,495

Technology

Sub-Total 271,452 179,538 254,692 705,682

Investment 25,904 6,521 29,468 61,893

Companies

Total 297,356 186,059 284,160 767,575

Appendix IV.-Geographical Distribution of IFI Approved Projects

District Council (North):

Ballymena 34

Ards 42

Belfast 93

Castlereagh 3

Lisburn 21

Down 90

North Down 26

Antrim 23

Carrickfergus 29

Larne 19

Newtonabbey 23

Coleraine 57

Balleymoney 20

Moyle 27

Cookstown 28

Banbridge 17

Craigavon 65

Armagh 91

Dungannon 107

Fermanagh 168

Londonderry 45

Limavady 29

Magherafelt 40

Newry & Mourne 166

Omagh 81

Strabane 68

Unallocated 314

Sub-Total 1,726

County (South):

Cavan 77

Donegal 122

Leitrim 71

Louth 59

Managhan 87

Sligo 65

Unallocated 19

Sub-Total 500

Joint Regional Programs 37

Total 2,263