The reason advanced by the administration of President Rodrigo Duterte for its rejection last week of a 250 million euros ($278 million) grant from the European Union – (“Human rights were mentioned,” according to EU ambassador to the Philippines Franz Jessen; “interference with the internal policies of the Philippines,” according to the presidential spokesperson) has brought to the forefront of public discussion the issue of conditionality in foreign-aid giving.
When may a passage in a foreign-aid agreement be properly regarded as a condition for the giving and acceptance of the aid? Stated more succinctly, when is a claimed ‘condition’ a condition, and when is it not so?
A lawyer who is well-grounded in both commercial law and international law is bound to say in the practice of international aid giving the only provisions that may be regarded as conditions are those that relate to the use and disposition of the aid, which may come in the form of concessional loans or outright grants (as in the case of the EU’s $287 million). The provisions that may be characterized as conditionalities include those that require the regular and timely submission of audit reports, the hiring of consultants and the prudent proportionality between operating expenses and capital spending. These are provisions that impact directly on an aided program’s prospects of success. They may properly be called conditions.
This is not the case with aid-agreement provisions that do not directly relate to the operation of a foreign-aid program. Such provisions cannot properly be called ‘conditions.’
It is well known that the Duterte administration, through the Department of Finance (DOF) and the National Economic and Development Authority (NEDA), has rejected the EU grant on the basis of its criticism of the campaign of extra-judicial killing (EJK) associated with Mr. Duterte’s war against illegal drugs. Duterte has used profane language against the EU. “The Department of Finance (has recommended non-acceptance) …… of grants from the EU that may allow it to interfere with the internal policies of the Philippines,” presidential spokesperson Ernesto Abella has declared. Carlos Dominguez III has said that the EU grant “would involve a review of (the Philippines’) adherence to the rule of law.”
Does this country’s adherence or non-adherence to the rule of law or the EU’s interference or non-interference with the internal policies of the Philippines have a close connection with the success or failure of EU-aided projects? Is it likely to impact directly on the projects? Of course not. Therefore, they cannot be called ‘conditions.’
If they must be regarded as ‘conditions’ at all, they should be termed external conditions. Non-fulfillment of an external condition is hardly an acceptable basis for rejecting an offer of external assistance. It has no direct bearing on the operation of the projects covered by the assistance.
Adherence to the rule of law and protection of human rights are not mere conditionalities of a grant or a concessional loan. They are part and parcel of an orderly international society. They form part of the fabric of civilization as we know it. The government of this country must have recognized that fact when it adhered to the 27 international conventions cited by the EU mission to the Philippines. One of those conventions embodies the obligation of adhering UN members to enhance and protect the human rights of their citizens.
When talking about its rejection of the $278 million grant, the Duterte administration should refrain from speaking of EU ‘conditions’ unless it is referring to ‘conditions’ imposed on, and accepted by, all civilized nations.
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