Jaarverslag ICCO 2011 by ICCO

Annual Report 2011

Photo: Paul Jeffrey / ACT Alliance

mission

ICCO is an interchurch organization for development cooperation. Our identity and work is characterized by three crucial values: compassion, justice and stewardship. The mission of ICCO is to contribute to poverty alleviation and social justice in programs and countries where we can have an impact and make a difference.

We are a global organization and the strong voice of many southern countries, and we focus on global goods, international justice, gender equality, human rights, food security and climate at a global level in the 44 countries we work. We create links between the local and international groups (vice versa) both – internally and externally. It is in this interaction where ICCO as a global civil society organization plays a global role in a globalized world with globalized common goods. We believe change depends both on the entrepreneurial capacity of individual people and on the capacity and willingness to join forces with others.

Therefore ICCO promotes and facilitates the collaboration between different types of participants: civilians (private sphere), social organizations (civil society), enterprises and business (market) and governments (state).

ICCO is a leading member of the ICCO Alliance. The Alliance focuses on six fields of work, and ICCO has a leading role – together with Kerk in Actie – in four programs out of those six: 1 Fair Economic Development (ICCO) 2 Conflict Transformation and Democratization (ICCO) 3 Food and Nutrition Security (ICCO) 4 Climate Change (ICCO) 5 Basic Health & HIV/Aids (Prisma) 6 Basic Education (Edukans)

Annual Report 2011

CONTENTS Member of the

Mission

Report of the Executive Board

COLOphon

Report of the Supervisory Board

Edition ÂŠICCO, Utrecht, May 2012

1 Strategy 1.1 Faith in development 1.2 Effective selling points 1.3 ProCoDe grounded 1.4 The road to an entrepreneurial innovator 1.5 The new ICCO Cooperative

11 11 11 12 13 15

2 Policy Development 2.1 PMEL 2.2 Lobby and advocacy 2.3 Gender and rights based approach 2.4 Ecumenical networks

17 17 19 19 20

3 Corporate Social Responsibility 3.1 Treasury 3.2 Governance and organization 3.3 Human resources 3.4 Climate neutrality and sustainable purchase 3.5 Reporting 3.6 Partnership and thematic policy

23 23 24 24 24 25 25

4 Private Sector Cooperation 4.1 Enabling environment 4.2 Business and human rights 4.3 Products and involvement strategies

27 27 27 28

5 Fair & Sustainable Holding BV 5.1 Fair & Sustainable Advisory Services BV 5.2 Fair & Sustainable Participations Interests BV 5.3 Fair & Sustainable do Brasil Ltd 5.4 Fair & Sustainable Ethiopia Ltd 5.5 FairClimateFund BV

31 31 32 32 32 33

6 Fair Economic Development Program

7 Conflict Transformation & Democratization Program

8 Food and Nutrition Security Program

In this annual report ICCO gives account of its work in 2011. You can order the annual report at ICCO Service Desk: + 31 (0)30 692 78 11 info@icco.nl You can also download the report at : www.icco.nl/jaarverslag2011 ICCO works closely with Kerk in Actie in the implementation of the international programs. Editing Jaap â&#x20AC;&#x2122;t Gilde (final), Claudia Kool, Willemijn Lammers, Frederik de Rooij and Thies de Waard Design Reprovinci, Schoonhoven print Twigt Grafisch Facilitair B.V., Waddinxveen Cover photo To-to Camba Address ICCO Joseph Haydnlaan 2a 3533 AE Utrecht PO Box 8190 3503 RD Utrecht www.icco.nl www.icco-international.com

9 Fair Climate Program

10 Other programs 10.1 Basic Health and HIV 10.2 Basic Education 10.3 Disaster Management 10.4 Impulsis 10.5 WASH Alliance 10.6 Connect4Change Alliance

57 57 59 60 61 62 62

11 Communications and Fundraising 11.1 Communication 11.2 Fundraising 11.3 Togetthere

65 65 66 68

12 Internal Organization 12.1 Administration costs 12.2 Employees 12.3 Improving working process 12.4 Quality control 12.5 Security 12.6 Information and Technology 12.7 Works Council

71 71 71 73 73 74 74 75

13 Consolidated Financial Statements 2011 13.1 Consolidated Balance Sheet as at December 31st 2011 13.2 Consolidated Statement of Income and Expenditure 2011 13.3 Consolidated Cash Flow Statement 2011 13.4 Explanatory notes to the Consolidated Financial Statements 2011

76 76 77 78 79

14 Foundation’s Financial Statements 2011 14.1 Foundation’s Balance Sheet as at December 31st 2011 14.2 Foundation’s Statement of Income and Expenditure 2011 14.3 Explanatory notes to the Foundation’s Financial Statements 2011

100 100 101 103

15 Other Information 15.1 Independent auditor’s report on Financial Statements 15.2 Appropriation of net result 15.3 Composition of the Executive Board and the Supervisory Board

104 104 105 106

Appendices I Map of Countries & Programs II Organization Chart III Legal Structure IV Accountability Statement CBF V List of Abbreviations

108 108 111 112 113 115

Annual Report 2011

report oF the executive board It is with pleasure and pride that we present the 2011 annual report of the Foundation ICCO, Interchurch Organization for Development Cooperation.

Especially since the appearance of the publication Less Pretension, More Ambition of the Scientific Council for Government Policy, the future of development cooperation is being much debated in The Netherlands and this debate happens also within our own organization. ICCO continuously seeks the best answers and solutions to alleviate poverty and to stop social injustice in a globalized world. The world is fast and moving, full of global and local crises, but also of opportunities. We have to be prepared for the sometimes critical and sometimes demanding public support, and for the sometimes demanding, but also peculiar new donors or investors. We contribute to new dynamics in the relationship with our stakeholders and as a consequence develop our strategies and organizational structure.

2011 was the first year of the ICCO Alliance business plan (2011-2015) and the MFS2 subsidy contract with the Dutch government. Compared to MFS1 the new budget is substantially smaller and therefore 2011 was without a doubt a turbulent year. Although decisions were not always easy - especially the unavoidable consequences for personnel - we moved forward and succeeded in speeding up organizational changes. There was no time to sit back and relax. We proclaimed 2011 as the year for formulating a new strategic vision towards the future – the so-called Challenge 2020 – based on the principles of ProCoDe (= Programmatic approach, Co-responsibility and Decentralized organization model). Innovation, entrepreneurship and resource mobilization are important objectives in the plan and our three effective selling points are leading our direction. In the Strategy chapter of this annual report, we elaborate further both on our plan and on these issues.

We strongly believe into further developing our ProCoDe model by cooperating with our partners and other stakeholders. We see that the people with and for whom we are working are influencing our policies. ICCO’s choice for decentralization provided us with several very interesting experiences and opportunities to redefine our policies in order to collaborate with other participants and to mobilize other resources. So, the first signs in 2011 were hopeful. Seven Regional Offices are now entirely operational. It is encouraging to see how fast the new local employees in the regions have become

We believe in people’s capacity to improve their lot. Marinus Verweij , Chairman Executive Board. Photo: ICCO

familiar with the ICCO organization. The input from our International Advisory Council and Regional Councils concerning our new strategic plan is also inspiring.

Development cooperation is not a value-free activity. ICCO’s genes and roots were frozen for some time, but we have recovered them again. In 2011 the paper Faith in development was issued. We quote: “ICCO is a faith-based organization for international cooperation. Our passion is to end poverty and injustice in service of a full and dignified life for all. Our work is founded on our belief in people as dignified and social beings. We believe in the dignity, creativity and capability of each and every human being, as we are all created equally in the image of God. We believe in people’s capacity to improve their lot. Standing with them in solidarity, we support their struggle for a dignified life”. Working and living from a perspective of identity and values reminds us of who we are and how we are related to other people. Development cooperation is about money and plans but not without values and compassion towards human begins and social initiatives. ICCO and Alliance partners are towards binding a more closely connected collaboration model. The conceptual phase of this process was concluded in 2011. We expect to start the ICCO Cooperative in 2012 and we are already working out pilot models for the intensified cooperation in Central and Eastern Africa.

During years, the funding of development cooperation, and of ICCO in particular was generous. With or without a financial crisis ICCO and other development organizations have to show their license to operate more now than before. ICCO is convinced that after almost 50 years the organization still has a role to play in developing and developed countries. Not by itself, but together in a multi stakeholder approach tapping the qualities of all involved. We hope you too will be convinced of ICCO’s strength and uniqueness after reading the 2011 annual report. Please contact us with any inquiries or ideas you may have. Utrecht, 23 April 2012 Executive Board,

M. Verweij, Chairman

W.D. Hart, Member

Annual Report 2011

report oF the supervisory board 2011 may be categorized as a turbulent year. First of all these turbulences were the result of the major budget cut of Dutch government funding for the new MFS2 period, starting 2011. It meant that were going to receive about 40% less funds in comparison to the previous period. We had to reshape the business plan for the coming years and subsequently think about the associated organizational structure and about new avenues for fundraising. In June we said farewell to Ms. Britta Bรถhler, who was an active and well respected member nominated by the Works Council. The board decided to continue with six members as the preparations to establish a cooperative, and thus a new government structure were already in full swing.

In 2011 the Supervisory Board held five meetings with the Executive Board of ICCO. At these meetings we paid lots to important topics such as forming the cooperative, our identity and the process called: Energy@work.

A cooperative is under construction, because a new era asks for a new answer. The establishment of a cooperative is consistent with our co-responsibility process and new stages in development thinking, both domestically as well as internationally. Moreover the cooperative provides us the opportunity to connect stakeholders like companies with grassroots. We can act in the frontline, together with partners because ICCO is too small to do that on its own and the current ICCO Alliance is less liable than the cooperative. We have passed the line starting with three members and with ICCO as the professional organization, but we do hope for more members in the short-term. New members must have a strong commitment with us: share the ups and downs, reap the benefits and also pay the price if necessary. The cooperative strives to be a platform of Christian social movement. Our frame of reference links to the social Christian traditions. Our identity will make us stronger because with the added value, we can better position ourselves in the market. The abundance of the past has gone; the means are very limited now and ICCO had to streamline its professional organization and adapt it to the new situation. We did so with external input in a process called Energy@work. The consultants audited all the departments of ICCO at Global Office in depth, and the Regional Offices also

Photo: Frans-Jan Fortunati

The ICCO Cooperative provides us the opportunity to connect stakeholders like companies with grassroots, Doekle Terpstra, Chairman Supervisory Board.

on headlines. We are confident to be ready to adapt to future requirements through implementation of their advice.

Of course, ongoing business like management information, annual report and annual plan were also part of the agenda and we were granted permission for entering into a credit agreement with ING, ICCO and FairClimateFund for an amount of 4.3 million Euros to discharge over a period of five years. Regular meetings took place with the Boards of the other ICCO Alliance partners to discuss progress. The audit committee, together with the external auditor, met four times in 2011, to discuss financial reports and other external and internal audit reports. Following the recommendation of the audit committee, the Supervisory Board approved the 2011 annual accounts, provided with a qualified auditorâ&#x20AC;&#x2122;s opinion and adopted by the Executive Board. The remuneration committee was involved in converting the remuneration of the members of the Executive Board from a contract basis into a regular employment contract.

The Supervisory Board met two times with the Works Council, specifically focusing on important items like strategy, the cooperative, its new governance model and the identity of ICCO. Both the Supervisory Board and the Executive Board wish to express their sincere appreciation for the amazing commitment and efforts of the employees. Utrecht, 23 April 2012

On behalf of the Supervisory Board, D. Terpstra, Chairman R. Veenstra H. van Boggelen G. Mohebbi G. van Dijk B. Meyer

Annual Report 2011

What is our adequate answer to the changing world?

Photo: ICCO / Hester Foppen

Strategy

The nature of funding and the societal climate regarding to development cooperation is changing. In order to formulate the adequate answer that this changing world is inviting us to find in 2011 ICCO re-examined its identity, uniqueness, organizational structure and vision for the future.

1.1 Faith in development We believe in our mission and passion in what we call international development cooperation. Our identity and our values help us keep our vision and dreams alive in this complex and globalized world. These values give common ground for working with others: producers, social workers, investors, civil servants, researchers, journalist, or business people and/or their organizations. Staff of the Regional Offices participated in workshops and discussions about the identity of ICCO. In May 2011, in Utrecht we organized an “Identity day”. Staff visited several companies and organizations in Utrecht to learn how they manage and live their “identity” and how they connect it to their daily practice. A position paper, named Faith in development, about on the identity and core values of ICCO was ready at the end of 2011. In this paper, we define ICCO as a faith-based organization for international development cooperation. The paper describes the three core values of the organization: compassion, justice and stewardship.

From our inspiration and core values emanates a number of operative principles that form our policy and practice. These are inclusiveness, transparency, accountability and innovation. As a follow-up for the identity paper we developed an agenda concerning six topics: Theory of Change, ProCoDe, program and partner policies, human resources, communication and branding and fundraising. During 2012 we are working on these topics with an innovative and ‘out of the box’ approach.

The three core values of ICCO are compassion, justice and stewardship.

1.2 Effective selling points

We considered necessary to formulate a clear message, which offers distinguishable focal points about who ICCO is and what we do (and what we don’t do). In 2011 we formulated effective selling points for this purpose. These points help to make our message stronger and more focused. They also help to set priorities and to accelerate in certain areas, while at the same time continuing with the other work as formulated in our business plan.

Annual Report 2011

The effective selling points were formulated as follows: 1. Inclusive economic development: poor benefitting from value chains. 2. Empowering justice for all: people claiming their rights. 3. Change the systems together: different participants creating and relating towards transformative power.

1.3 ProCoDe grounded

Started in 2007, the ProCoDe project was officially completed on 1 January 2011. Seven Regional Offices, nine Regional Councils and the International Advisory Council were established. Staff in Utrecht has been decreased by approximately 150 FTEs and the same number of staff has been hired in the Regional Offices. ICCO is proud of this huge transformation in such a relatively short period of time.

The programmatic approach

In 2011 we thought about how collaboration with partner organizations took place and how the programmatic cooperation could be adjusted to the new funding realities. At the same time this detailed thinking process led to a reformulation of the already developed Theory of Change of the programmatic cooperation, either because it was necessary to refocus and limit activities or because the Theory of Change did not supported sufficiently the first phase of the programmatic cooperation. Many training sessions have been since then. The urgency to cooperate with other stakeholders more became very clear and there were several opportunities, not only with sister development organizations but also with the private sector and individual investors, for example.

In the past year we have seen a growing understanding and involvement of multiple stakeholders in the programmatic coalitions. Partner organizations recognize now, more than before, the need for cooperation with other participants and organizations to be able to change complex systems

Photo: ICCO / Margot Bolwerk Regional Council Central America & Haiti

ProCoDe, our Three pillars ProCoDe is ICCOâ&#x20AC;&#x2122;s paradigm to fulfill our mission. It consists of three pillars: Programmatic approach: Multiple stakeholders work together based on a joint analysis, a shared vision of the problem to be addressed and a joint plan of action. In this joint strategic plan each organization will contribute with actions that are in line with the organizational roles and identity Co-responsibility: The strategy and policy of ICCO is co-responsibility of the organization and Regional Councils and an International Advisory Council (IAC). Regional Councils develop a regional policy and advise the Regional Offices and Executive Board. The IAC advises the Executive Board. Program coalitions take responsibility for the implementations Decentralization: The organizational structure consists of a Global Office in The Netherlands and seven Regional Offices in three continents, closer to the beneficiaries, regional context and stakeholders

effectively. Many organizations have experience in networking but often it goes no go further than linking and learning by exchanging of information and sometimes sharing a lobby purpose after which such topical networks cease to exist. To promote the multi stakeholder approach, program coalitions receive support from facilitators. In the starting phase these consultants are often involved helping with the thematic analysis. They are needed even more to help in the stakeholder identification, the institutional analysis, the development of the Theory of Change, the set-up of the initial governance and the division of roles and responsibilities between the stakeholders.

2011 we invested a lot in starting coalitions In because we believe that the initial investments will pay off later in fulfilling in effective programs. We see that after an initial slow start, program coalitions do start to appreciate the added value of cooperation, and the start to invest more in the cooperation.

Co-responsibility

Regional Councils The concept of co-responsibility was further consolidated. The roles and mandates of the Councils in relation to the Regional Offices and Global Office were defined more clearly in order to improve the cooperation between those parties. During 2011, Regional Councils discussed and gave advice on annual plans, their implementation and the performance of the Regional Offices. They gave input on the regional strategy plans, which describe the regional strategy up to 2015. The Regional Councils also participated in the process of defining the future of ICCO after 2015: Challenge 2020. In November, all of the Regional Councilsâ&#x20AC;&#x2122; chairpersons were invited to come to Utrecht to discuss the outcome of the Challenge 2020 process (see 1.4) and the forming of the ICCO Cooperative (see 1.5). International Advisory Council The International Advisory Council (IAC) had three meetings in 2011, two of them through Skype and one live meeting in November. The IAC advised the

Executive Board on the plans for transforming the organization into a Cooperative and on the position paper of the multi annual strategic plan for the ICCO Cooperative. The IAC had also a joint meeting with the chairs of the Regional Councils. They advised the Executive Board on possible adjustments to strengthen and consolidate the co-responsibility model. This will be elaborated in 2012.

he Regional Councils and the IAC have taken an T important position in the regional and corporate strategy development. In December 2011 we decided to start a study on the co-responsibility model in order to further refine and strengthen this model. All Regional Councils and the IAC are involved in this study. The results will be available in the third quarter of 2012.

Decentralization

he decentralization process was accomplished in T 2010 by establishing the last four Regional Offices in South America, South East Asia, Southern Africa and Central and Eastern Africa. In 2011, due to budget cuts, we decided to merge the regions of South and Central Asia. In a number of regions ICCO chose to have more country presence, and because of that small Country Offices were established. By having more country presence in some regions we believe we can have more added value in program development, in cooperating with others and in local mobilization of resources.

1.4 The road to an entrepreneurial innovator ICCO and Alliance partners Edukans, Kerk in Actie and Prisma decided to take a new step in their cooperation. The joint reflection - called Challenge 2020 â&#x20AC;&#x201C; about the changing world and the changing nature of our work has motivated us to create a vision and strategy for 2020.

We formulated four different scenarios for the kind of organization we want to be in 2020. Members of the Regional Councils in Africa, Asia and Latin America, as well as management personnel and

Annual Report 2011

staff from Regional Offices, the Global Office and Alliance partners participated in the process. The IAC advised on the process itself. The participation from representatives from both Dutch and southern civil societies enriched the debate in significant ways. The scenarios were: 1. Be a global catalyst: strong belief in the ability to change: core role in the strengthening of Southern partners 2. Focus on humanitarian aid: helping those who fall victim of global developments 3. Become an entrepreneurial innovator: take opportunities for social, economic and political change 4. Be a global political activist: countervailing the power of dominant forces that threaten the existence of our target groups

The primary choice made for ICCO was to focus on the entrepreneurial innovator. We believe that change towards fair and sustainable societies is possible and that it will come from active citizens and social entrepreneurs who create “new paths while walking”. We are coming from a global catalyst scenario and gradually will evolve to a more entrepreneurial innovation perspective. There is a necessity for the other three scenarios, and there is room for them, depending on contexts, moments, sectors, intervention strategies, but it helps us to have a clear focus of what our priority is. It is important to recognize where the strength of ICCO lies and how to best make use of it, and where to cooperate with others who are specialized in different capacities, professions and fields.

Photo: ICCO

An entrepreneurial innovator is someone who • focuses on economic, social and political change in an entrepreneurial way • empowers people • is an active citizen and is people driven • innovates and dares to take risks • connects parties and people in order to achieve goals • focuses on opportunities, using new technologies and bringing innovation • develops different partnerships with knowledge institutions, researchers, businesses, governments, organizations, etc. • works with diverse (financial) tools and modalities

Becoming an entrepreneurial innovator will involve adopting a different approach with a smaller focus on funding, on building capacity and on policyinfluencing and with a bigger focus on creating strategic coalitions and supporting innovators and entrepreneurial people/organizations. This means that in 2020 our staff members will need to be “entrepreneurs” themselves.

ICCO’s primary role remains to create added value for, and in cooperation with, poor and marginalized people. This means that we are clear on where we expect economic returns and where we expect social and political ones. It also means that we will be able to assess more quickly when a partnership does not work, so that we can take remedial action or pull out of the partnership.

1.5 The new ICCO Cooperative

As part of the vision and strategy talks towards 2020 ICCO, Prisma, Kerk in Actie and Edukans decided to intensify their cooperation. We need a smoother organization with clear task division and centralized support and working organization so that we can improve the quality of our work. After assessing and analyzing different organizational models , we chose the cooperative model. The modern cooperative model combines: • Collective and individual elements • Members (owners of the cooperative) and associates (non-owners) • A common strategic gathering and a functional

professional organization • A joint expression towards the outside world and, at the same time a diversified accountability to different constituencies or publics • A structure that respects the roots within The Netherlands and the partner relations in the South • One central umbrella global body with different (physical) expressions in the regions • A possibility to collaborate on strategic issues and specialize on specific themes and fields of work • A financial model where members manage their own funds and also bring in and manage shared (working) capital The cooperative model is flexible, inclusive and open to new memberships. In a fast changing world the ICCO Cooperative seeks to emphasizing the CO in ICCO: co-creation, co-responsibility and cooperation. A cooperative is not a model based on power but on consensus. The ICCO Cooperative enhances possibilities for joining forces in fundraising. The ICCO Cooperative plans to start working in mid-2012. In 2011 the different potential cooperative members started a joint pilot project in Central and Eastern Africa, under the mandate of the Regional Office.

The ICCO Cooperative seeks emphasizing the ‘CO: co-creation, coresponsibility and cooperation.

Annual Report 2011

How do we monitor and improve the quality of our work?

Photo: Marcella Bos

Policy development

As a consequence of the reshaping of ICCO, strategies and policies have to be actualized too. They are measured and mirrored against our basic policies of rights based approach, geder, lobby and principles of planning and evaluation. In this chapter we give insight in the progress of policy development in 2011.

2.1 Planning. monitoring, evaluation and learning (PMEL) The PMEL-system of ICCO is designed both for internal learning as well as for accountability purposes towards our constituency, our stakeholders, our partners and donors (such as the Dutch Ministry of Foreign Affairs, European Union). It generates sound steering and learning information on:

• Planning, implementation and developments of ICCO’s programs and key principles • Capacities and organizational developments of partner organizations • Quantitative and qualitative results in terms of outcomes and impact on the level of the beneficiaries or clients of partner organizations and programmatic coalitions • Costs of financial resources given by various donors to enhance accountability

Subsidiarity and stacking principle

I n the course of 2011, the renewed PMEL policy was developed in close cooperation with the Regional Offices. This policy paper is generated through the internal Management Information System (MIS) of ICCO and the yearly reporting cycle. The PMEL-system adheres strongly to the principle of subsidiarity: collect, analyze and use data where it is most meaningful. This implies that, at community level, the target groups collect, analyze and use data. Country level reports are produced for distribution to local stakeholders including embassies, NGOs and local governments. elated to this principle of subsidiarity, there is an important operation characteristic R of the system, the so-called stacking principle. This means that each level of planning and reporting feeds into the next. For example, the project update provides information for the program progress report, and this implies a check at program level if the partner updates are consistent in their approach and interpretation of the data. The next step is then bundling the program reports into a country report and complete this with an analysis at country level. The same happens at regional level. After this pilot year, the policy will be evaluated and fine-tuned.

Annual Report 2011

I n the monitoring protocol, indicators for all our programs are specified and measured during the course of a program. Global indicators per program are contextualized to fit local situations and definitions. In 2011, a baseline on all these indicators was established, allowing us to measure progress. Also in 2011, the development of a web-based tool was started, providing Program Officers with an intuitive way to keep the monitoring system up to date. The web tool will go live in the first quarter of 2012.

Evaluation at three levels

Evaluation and assessment of our work, and our partnersâ&#x20AC;&#x2122; work, takes place at three levels, that are briefly illustrated below.

Partner organizations level Our partner organizations 84 project evaluations were are required to carry out a project evaluation completed and most of them once every three years. were considered of good The evaluation is part quality. of the PMEL system of the partner organization and is facilitated and supervised by the Program Officer. Evaluations are not carried out in a vacuum. Results are given follow-up in the work of partners. Recommendations either become part of new contracts, as pointers for the partner organizations, or are part of the dialogue between the partner and Program Officers during the continuation of the projects. In 2011, a total of 84 project evaluations

were completed, and most of them were considered of good quality. As far as results are concerned the work of partners was generally judged positively, although the effectiveness in half the cases was considered only moderately effective and could be improved. For this purpose, a strong emphasis will be placed on the relationship between partnersâ&#x20AC;&#x2122; activities and underpinning of the Theory of Change in upcoming trainings on the programmatic approach. In the table below you will find the details regarding project evaluations in 2011. Programs level The thematic program evaluations as undertaken by ICCO, evaluate an entire program both halfway and at the end of its running period. Besides serving for accountability purposes towards the donors, these evaluations inform about the internal learning process and help us to develop the programs further. We didnâ&#x20AC;&#x2122;t conduct any program evaluations in 2011, since it was the first year of MFS2. The results and insights of the evaluations undertaken during MFS1 served us to write the new proposals for MFS2. For example, regarding the Fair and Economic Development (FED) program, the recommendation to be more demand focused rather than supply driven contributed to the ICCO decision to integrate the sub-programs of MFS1 into an integrated FED program in MFS2. Working from within the private sector to become more inclusive is now considered more important, and strengthening producer organizations so they become more market oriented is another important area of focus now.

Table 1: 2011 Contents project evaluations Excellent/ good

Sufficient

Quality work of partner organization

63%

33%

Relevance of work of partner

66%

22%

Effectiveness of work of partner

36%

Agreement of report Quality of report

Insufficient

Unclear

N/A

51%

75%

11%

12%

57%

38%

ICCO Alliance level To assess progress and development at Alliance’s level, both a midterm review and an end term review are performed during the financial period. Those help us realize if the organization is on the right track. A midterm review is planned for 2013.

2.2 Lobby and advocacy

ICCO relates to decision makers at national and international levels and, thanks to the process of decentralization, works increasingly with decision makers within countries and influences them on specific policy decisions, while increasing the participation of civil society organizations. In 2011 due to budget cuts, lobby capacity went down and we had to concentrate on some issues only.

These were the issues chosen for 2011: • Food production, security and land: the right to food and to produce (see Food and Nutrition Security program, chapter 8) • Shrinking political space: addressing the worldwide shrinking of political and operational space, especially for civil society and supporting policy officers if partners are in trouble due to their human rights work • Fair climate: reducing carbon emissions while people living in poverty have a chance to develop economically (see Climate program, chapter 9) • Corporate lobby: positioning ICCO in The Hague, focusing on financing development, policy coherence, and the new development policy of the Ministry and ICCO’s vision on social capital of civil society On some issues, for example gender and resolution 1325, we supported the Dutch network Women Inc. their lobby actions, and on human rights we cooperated in the Breed Mensenrechtenoverleg (BMO). In addition to this, we developed a workshop for all Regional Offices to restructure lobby work within ICCO. In 2011 the first four Regional Offices were trained in lobby and advocacy techniques.

Lobby in the regions

Lobbying is a new tool for Regional Offices, and sometimes it puts relationships with decision

makers in a new perspective. Within the old model ICCO left the local lobby to local partner organizations, but with ICCO-offices present, this is changing. Regional Offices decide upon their local lobby, in close coordination with Utrecht. In this model , on 2011, offices were to work in two issues, in line with ICCO’s effective selling points. These two issues are: CSR, strongly linked to food security and shrinking political space, closely related to land issues. Apart from these main themes, every Regional Office has the possibility to do its own lobby at the side, and be supported by the lobbyists in Utrecht. Every Regional Office will have a so-called focal point for lobby. In this way ICCO’s internal structure is ready for the coming years. Furthermore the new lobby and advocacy policy will be approved in the beginning of 2012, and then implemented afterwards.

2.3 Gender equality and rights based approach

ICCO chose to combine the cross cutting issues throughout all its work of gender equality and the rights based approach. Applying one approach without taking the other into consideration may reinforce inequalities or prevent realization of rights. In 2011, we set up a learning community and a face-to-face meeting organized to integrate and understand the new approach in the organization. Staff at the Regional Offices in Kampala and Denpasar was trained; Managua and La Paz will follow in 2012. ICCO gender policy describes our common goal of contributing to gender equality and women’s empowerment. Our focus is on learning, part of which implies unlearning as well. By unlearning we mean identifying and changing the perception foundations and behavioral patterns that lead to gender inequality. Learning involves re-founding perceptions and behavior and developing new perspectives and plans for the future. On International Women’s Day, March 8th, ICCO presented its policy Unlearning gender and started a strategic process for all program staff, to turn this policy into practice in all aspects of ICCO’s work. We have introduced and applied new instruments, such as a gender and rights based approach checklist.

Annual Report 2011

2.4 Ecumenical networks ICCO is part of the worldwide ecumenical movement. This is reflected in a number of ways: in our network of partners; in the working relationships with ecumenical sister organizations in Europe, such as Christian Aid (UK) and the Evangelischen Entwicklungs Dienst (Germany); and also in our formal membership of international ecumenical networks such as the ACT Alliance, Aprodev and the Ecumenical Advocacy Alliance (EAA). Due to budget cuts and policy adjustments, a number of relationships had to be ended. Key global partners for ICCO and Kerk in Actie are the ACT Alliance and the World Council of Churches (WCC).

ACT Alliance

ICCO is organization member of the ACT Alliance, an international network of over one hundred and thirty church related organizations in the north and the south, active in development, relief and advocacy.

The ACT Alliance manifests itself at both national and The ACT Alliance and World international level, with Council of Churches are key emphasis on the former. National ACT Forums have global partners of ICCO. been established already in over forty countries in the south, making it a very interesting global network with so many different participants from all over the world and working on so many levels within and between the countries. One great added value of ecclesial and/or church related organizations is that they are organized from the very local level, in the most remote areas, via the regional and national level, to the international level. That presents fabulous opportunity to give the poorest of the poor and the most marginalized people, a strong voice in the global atmosphere.

In a national ACT Forum participate all the ACT members that either are based in that country, or support work of partner organizations in that country. In the Forum, they work together in areas such as: analysis of the national situation, priority setting, forms of cooperation, pooling of humanitarian disaster relief, joint advocacy and fundraising work

for joint action. National ACT Forums are seen by ICCO as very valuable instruments to achieve greater complementation among all participants. All Regional Offices are now participating in the national ACT Forums, at different levels of involvement. A striking example of what a difference it makes when workers in humanitarian aid, development and advocacy join hands was the situation in Haiti after the 2010 earthquake. Along with the immediate humanitarian response the ACT Alliance, only days after the alliance was born, responded to a call from the national ACT Forum and initiated a global advocacy campaign for the cancellation of Haiti’s crippling debt to the World Bank, the IMF and others. The campaign was successful, and Haiti government funds can now be used for re-building the country, rather than servicing international debts. The new ACT Alliance expansion takes place in a world where the available space for NGOs appears to be shrinking. This phenomenon is the subject of a report published by the ACT Alliance in 2011: Shrinking political space of civil society action. Apart from a global analytical part, the report offers findings from research in a number of national settings in the South: Brazil, Columbia, Guatemala, Honduras, India, Indonesia, Malawi, Paraguay, Peru and Zimbabwe.

Another achievement in 2011 was the adoption of a policy document that will guide the advocacy work of the ACT Alliance. As one of the guiding principles the policy states that “the ACT Alliance does advocate with people rather than for people. Marginalized and poor communities are at the center of advocacy and ACT supports them as much as possible to be their own advocates. Advocacy is understood as an inclusive and participatory activity. People in their communities are the agents of change themselves rather than objects of someone else’s work.”

World Council of Churches

The World Council of Churches (WCC) acknowledges ICCO as ‘Specialized Ministries’. This status gives ICCO access to governing bodies of the WCC meetings in an advisory capacity.

A highlight in the work of the WCC this year was the International Ecumenical Peace Convocation (IEPC) held in May in Kingston, Jamaica. In response to a call from the WCC, almost 1,000 participants from more than a hundred countries assembled in Kingston to “harvest” the fruits of the “Decade to Overcome Violence”, that began in 2001. Among the Dutch participants were ICCO, Kerk in Actie and also the Protestant Church in The Netherlands. The IEPC produced an “Ecumenical Call to Just Peace”, encouraging people of all faiths to work for justice and peace in a coherent manner, based upon the conviction that there can be no justice without peace nor peace without justice. Especially impressive was the report so-called “Living Letters”. “Living letters” were solidarity visits of ecumenical and international teams of four to six people of different churches and communities to decision makers and church leaders in countries with difficult situations (e.g. in Burma, Haiti, Israel and Palestine Territories, Pacific, Australia) as an expression of their concern and commitment and as a way to break “the culture of silence”.

In October 2011, ICCO participated in an international meeting in New York created by the WCC in order to coordinate better UN-related ecumenical advocacy work between participants at the local, national and international levels. Among many other practical arrangements were those of joint preparation for the Rio +20 Summit in June 2012 and for closer advocacy cooperation between WCC and the ACT Alliance in a joint UN Office, starting January 2012. Other areas of continued cooperation with the WCC in 2011 are programmatic work for peace in the Middle East, climate and eco-justice, HIV, water issues and human rights.

Expenditures of intervention strategies ICCO programs in %

Direct poverty alleviation

Civil society development

34%

49% 17%

Lobby & advocacy

Direct poverty alleviation and sustainable economic development A strategy for structural poverty alleviation that is directly targeted at the improvement of living conditions of people who live in poverty, by using sustainable interventions geared towards direct service delivery or the strengthening of people’s capacity to look after their own basic needs; the target group of direct poverty alleviation are people living in poverty. Civil society development A strategy for structural poverty alleviation through the strengthening of diverse and democratic structures in society and organizations with the aim to improve the organization and governance of society. The target group are organizations in local civil society. Lobby & advocacy A strategy for structural poverty alleviation with the aim to change local, national and international policy, processes and structures that sustain or worsen poverty and inequality. The target group are leaders and policy makers in the (international) community who strive for eradication of poverty.

Annual Report 2011

How does ICCO deal with Corporate Social Responsibility?

Photo: Edward Parker

Corporate Social Responsibility

Corporate Social Responsibility (CSR) is an integrated element of all we do in ICCO. In this chapter we distinguish the fields where CSR is practiced and preached.

3.1 Treasury A treasury statute was formulated in 2010, including criteria for sustainability in relationship with discretionary management, responsible investment policy, impact investment, long-term sustainability and risk limitation. The treasury statute is in full implementation. It was also a leading tool in our search for a professional external asset manager for ICCO’s investments. We chose ING Bank because of their profile, related to responsible investment criteria. On the instruction of ICCO, ING applies sustainable

ING sustainable criteria for ICCO Negative test: exclusion in industries of alcohol, bio-industry, fur, gambling, nuclear energy, non-sustainable agriculture, pornography, tobacco, weapons and in behavior related to corruption, discrimination, child labor (circumstances), human rights, environmental offenses, violation of social laws and other codes. Positive test: non-financial indicators related to social, societal and environmental sustainability (see treasury statute).

criteria (see BOX) when assessing if a company is suitable to be included in ICCO’s investment portfolio. The investment statute prescribes a desired distribution in the investment portfolio from 25% in equities and 75% in fixed income securities. By the end of 2011, the split is 20% to 80%.

ICCO reports on her investments and asset management in this annual report. In addition ICCO reports also in this report and tot The Netherlands Microfinance Platform about her programmatic financial services and modalities (loans, participations and guarantees – see chapter 6.4, page. 37 ). In 2011 ICCO signed the ‘‘Principles for Investors in Inclusive Finance’’, a set of seven principles amongst other things on products, client protection, fair treatment and balanced returns. These principles will be implemented and reported on during 2012.

Annual Report 2011

3.2 Governance and organization The principle of co-responsibility, as adhered to by ICCO, implies a sustainable way of sharing our power with parties in the southern countries. Also in 2011, the organization model was further reshaped and downsized in order to be more sustainable and to keep our overhead percentages Co-responsibility implies a as low as possible and sustainable way of sharing below the generally our power with parties in the accepted standards of southern countries. the VFI-aanbeveling kostentoerekening beheer en administratie as stated in our own business plan. We set the ICCO Alliance overhead at a maximum of 10.94%, but for organization downsizing during 2011 and 2012 we allow an exceptional higher percentage up to a maximum of 12.5%.

ICCO expects its suppliers to adhere to ethical and sustainability standards and asks them to adhere to several ethical, environmental and labor standards as well. We started a project at the end of 2011 to adapt procurement and tender policies and procedures that will be decided upon and implemented in 2012. Some banks or pension institutions dealing with ICCO are asked and sometimes questioned on their sustainable and responsible practices, such as PGGM and ING Bank during 2011.

3.3 Human resources

ICCO wants to be a responsible employer and aims to have a good and fair human resources policy. Staff development is encouraged and supported, as is diversity by nature of the decentralization realized, and gender equality practiced and possibilities for parental leave, informal care, etc. facilitated. Staff has the right to complain and to get the support of trusted representatives according to clear procedures and indicated incidences. At the same time the staff has to conform to several code of conducts, like the ACT Alliance Code of Good Practice, ACT Alliance Code of Conduct, International Code of Conduct for Humanitarian Aid (ICRC). In 2011, Regional Offices took an employee satisfaction. The survey showed rather high satisfaction on issues such as workload, colleagues,

Photo: Jaap de Jong

FairClimateFund compensates ICCO In 2011 FairClimateFund compensated ICCO for her carbon dioxide emissions in 2010 (= 1.160 tons) by selling certified, Gold Standard CO2 emission rights of 10, 50 Euros per ton. The total payment for ICCO was 14.494,20 Euros. The calculation of the emissions was done in 2009 by the company Ecofys. Striking aspects in the Ecofys report are that 79% of the emissions were caused by flights (Global Office, 2009). Heating of the Global Office contributed 12% and forensic traffic 7%.The revenues of the sold and numbered certificates benefit directly to households in townships in South Africa. FairClimateFund is supporting 40.000 household to adopt a new way of firing for cooking and heating, the so called Basa Mogogo method. The Basa Mogogo innovation saves CO2 emissions and is better for the health, climate and income of the poor communities in townships.

employee well-being, management (also when compared to a benchmark of sister organizations). There was less positive perception in comparison to the benchmark median on rewards, policies, interaction between Global and Regional Offices, and on staff participation. A follow up agenda was defined to try to improve on those issues.

3.4 Climate neutrality and sustainable purchasing

ICCO is renting space from the Services Organization of the Protestant Church in The Netherlands, which has

a responsible way of managing the building regarding energy-use and organic and fair trade of food and drinks, The building has neutral climate, agreeing with ICCOâ&#x20AC;&#x2122;s own policy. To compensate for the surplus of CO2 emission high standard CO2 credits were again bought from the FairClimateFund in 2011. ICCO tries to limit its travelling and discourages travel by air in Europe or by car in The Netherlands. All CO2 emissions related to ICCOâ&#x20AC;&#x2122;s travels are compensated.

3.5 Reporting

ICCO is transparent in its reporting about the results we are obtaining, as well as about the ones we are not. We inform about our financial ways in the annual report. Financing is our core business and we have to be open about it. We report about the salaries of our Executive Board members and about their outside activities and we make sure there are no situations of conflicted interests. We share our reports with many stakeholders, and the annual report are also totally accessible via website. To make the 2011 reporting even more transparent we made a the distinction between ICCO Alliance reporting and ICCO reporting.

3.6 Partnership and thematic policy

Our partnership policy was revised during 2011, and will be approved in 2012. It is based on three main values: justice, stewardship and compassion

and four operating principles: transparency, accountability, innovation and reliability. This policy is the framework for donor principles, codes of conduct, contractual conditions, complaint procedures and principles of audi alteram partem, rights and obligations of the partners, and also of ICCO itself. In the case of evaluations, investigations or audits, partners always have the right to react. ICCO will not make use of undisclosed information by third parties when assessing a partner. We believe in the autonomy of its partners and, by default, supports them institutionally. Questions about financial sustainability are part of the first assessment, and they are also part of the monitoring along the way. Partners receive feedback from ICCO at least once a year on their reporting. In 2011, we put extra focus on delivering our updated feedback to the partners in a conscious and timely way. Partners are encouraged to give feedback to ICCO through consultations, annual reports, program development sessions, etc. In relation to the private sector the code of conduct ICCOâ&#x20AC;&#x2122;s principles, criteria and procedures for cooperation with the private sector was formulated in 2009, based on responsible, fair and sustainable criteria. In 2011 a so-called business scan was developed in order to perform an assessment when entering into strategic partnerships with private companies. This tool will be implemented in 2012.

Annual Report 2011

How does ICCO help to create a strong and sustainable local economy?

Photo: Bernd Out

Private Sector Cooperation

ICCO has been cooperating for many years with both small, medium and large business partners. This is of vital importance for sustainable business chains and for the creation of a strong local economy. According to a baseline that we developed with support of the Partnerships Resource Centre, in 2011 we had 46 partnerships. Partnerships represent a wide spectrum of the private sector, from multinationals, like Unilever and H&M, to individual entrepreneurs; and from financial service providers to company foundations. The most important aims for these partnerships were: investing in capacity building (30%), integrating beneficiaries into global supply chains (28%) and creating new products, markets or services (26%).

4.1 Enabling environment

To stimulate sustainable trade, leverage attention to pro-poor innovations and to strengthen corporate accountability, ICCO communicates its vision to relevant political parties, and company forums, through the MVO (Corporate Social Responsibility) platform and through Partos. In 2011 ICCO shared its experience with private sector cooperation during a lunch event at the Ministry of Foreign Affairs, and cooperated in a study by the Ministry on this topic, titled Partnering for development cooperation. We co-organized a learning event together with PSO, PrC and Wageningen University about working with companies. To further integrate private sector cooperation into the WASH and Connect4Change Alliances ICCO contributed to the research and publication of two studies conducted by Hystra, together with Ericson and Orange, showing the possibilities for partnerships.

4.2 Business and Human Rights

The Protect, Respect and Remedy framework by Professor Dr. John Ruggie is a great push for ICCO to integrate our rights based approach with our Fair Economic Development program. To connect these two we organized a workshop on business and human rights with a focus on Ruggie. We had the participation of NGOs, the Dutch Ministry and certification organizations such as Social Accountability International (SAI) and Forest Stewards Council (FSC). This resulted in a partnership between ICCO and SAI for the development of a training for retailers and factories to implement Ruggie principles into their overseas supply chains. Through our partnership with the Fair Wear Foundation 490,000 workers in the textile supply chain of 54 Dutch companies are trained on how to gain their rights to good labor conditions and in Bangladesh they helped to increase the minimum wage by 80%.

The Ruggie framework is a great push for ICCO to integrate our rights based approach with our Fair and Economic Development program.

Annual Report 2011

4.3 Products and involvement strategies In 2011 ICCO developed a menu with products for the private sector, offering them various ways to add social value to the core of their business operation. This menu focuses on relevant aspects of different programs. The six products that we offer are: Co-financing, Co-creation, Social Performance, Business for BoP and Compensation.

Co-Financing

ICCO feels that access to affordable and fair loans and credit for local small and medium enterprises is the first step towards an independent business and a way out of poverty. Through co-financing we work together with companies to provide financial instruments. Here are some examples:

• Working with Jumbo who supported 50,000 entrepreneurs in Africa through our four years of collaboration on micro-credit loans with IMF partners of Terrafina Microfinance • The Amazone Alternative (TAA) organized the first speed dating event between six financial institutes and seven selected participating forest companies. As a direct result loans were approved to three of the seven companies for a total of USD 813,000. Since ICCO is the manager of the TAA program, access to finance was integrated in a program of IDH for the first time One of the aspects of Co-Financing is the so-called “missing middle”. For example, Africa Juice needed finances to start a company in Ethiopia and to bridge the difficult startup time with bottlenecks that can cause tremendous delays while investments are already made. Therefore, ICCO took a share of 5% in the Africa Juice Tibila Share Company in the name of the producers and gave a guarantee for a loan with Rabobank.

Co-Creation

With a northern entrepreneur we created together an economic and social business aimed to reduce poverty and we used this concept also for fundraising. In 2011, four projects were in the execution phase in Latin America and one in preparation. The Inter-American Development Bank is very interested in it, and we are preparing now impressive financial participation. Here are some examples:

• Together with QuaTerNes we established three buying center to improve the fresh fruits cooling in Brazil; and with the Canadian company Turiya we created the first CO2-neutral juice factory in the heart of the Upper Amazon region • In cooperation with Granular AB , Swedish entrepreneur Carl Ho’s company, we are introducing new varieties of stevia in Paraguay with higher productivity. Stevia is a good alternative to sugar to improve health and nutrition issues • Working with a Dutch entrepreneur we collaborated in the startup of a processing facility with VAR to turn the pits of the acai fruit into biomass, which will create jobs for waste collectors in Brazil ICCO used the knowledge and entrepreneurship of successful business people for these interventions, and they in turn were able to achieve their socioeconomic ambitions. Together we obtained between 1 up to 2 million Euros per initiative to invest in poor people become able to use their abilities. ICCO became member of the ANDE network in 2011. This United States based network links ICCO with NGOs and investors from America and Europe. In May 2011 ICCO hosted a meeting in Amsterdam in the head office of US Media, one of the co-creation participants.

Social Performance

Nowadays companies are valued not only by their economic value (profits) but also for their social value (care for people and for the planet), and because of that they follow and implement Corporate Social Responsibility (CSR) strategies. Through our support in capacity development of small producers, we pro-actively increase the supply of certified sustainable products like organic, Fair trade and Better Cotton, FSC timber and various food crops. This makes European companies able to source sustainable products and achieve their CSR ambitions. Besides this, we offer “community development”, a tool to invest in the social needs of the community that companies are sourcing from. These two aspects can help improve or maintain the social performance of a company. Local sustainable sourcing In 2011, with the IDH coalition for Better Cotton Initiative (BCI) we invested 4.5 million Euros together with the private sector to implement better agricultural practices as identified by BCI (less water/

less pesticides). This should result in a decrease of their input cost by 20-40% that we will see in 2013. Through our partnership in, and management of the TAA program in 2011, a total 476,507 forest hectares obtained FSC certification in Peru and Bolivia (five companies and six communities). In Brazil this process moves slowly, because there is no market incentive for certification of forest management. There the exchange rate is too high for export and the - very demanding and fast growing - internal market does not value certification. Being a strategic partner of stichting Max Havelaar we supported companies to boost the sales of Fair trade products in The Netherlands to 57%. Fifteen companies became new Fair trade licensee holders of Max Havelaar in 2011 from which supermarket “Plus” declared to purchase 100% Fair trade bananas. These two successes resulted in 1.4 million Euros Fair trade premium for farmers to re-invest in their business and community. ICCO continues to support the Fair trade model because we see good results in Europe as well as in South Africa, India and Brazil, where the market for organic and Fair trade products is growing. Two examples: Fair Trade Label South Africa (FLSA) managed to contribute to tripling of turnover to 1.4 million Euros through a media campaign and in India the Shop for Change sold certified products for 500,000 Euros. A small but important part of the success of Fair trade is also handicrafts. Kiej de la Bosques, our partner in Guatemala, supported and linked 1.200 woman to national and international markets.

Community Development The Ahold Foundation (AFH) is gaining ground because three new suppliers of Ahold joined the AFH (two in South Africa and one in Mali). This increases the total investment in community development of the supply chains of the supermarket chain Albert Heijn. ICCO advises on proper identification and sustainability of the projects, with the involvement of the workers, and manages the funds. In 2011, a meeting in Malawi with ICCO’s African Program Officers and a representative of Ahold, marked the first step to decentralize the management of the fund to the regions. Protista, a tissue paper company in Cuzco, Peru, was able to strengthen its corporate citizenship when ICCO partner CEDRO involved them and the local government, in a program to address the issues of

child labor and bringing children back to school. While working with a company can create opportunities, we also have the duty as a civil society organization to remain critical. For example, we manage AFH, but we do address child labor issues in the hazelnut paste industry through our membership with Stop Kinder Arbeid towards Ahold. Although playing both roles is challenging, we hear that companies value this role and need our guidance to help solve social issues.

Business for Bottom of Pyramid (BoP)

Market based innovate product development can be a solution for the basic needs of the largest and poorest group of people who are at the bottom of the pyramid. In 2011, the BoP Innovation Center (BoP Inc), to which ICCO is a founding and strategic partner, worked for the first full year. The center is “secretary” and provides assistance to the consortium ‘Ubora wa Dawa’ of DSM, ICCO and our African partner EPN, to develop and prepare the market introduction in Kenya of an innovative test kit for medicine quality. This project, with ICCO as pilot coordinator and EPN as local counterpart, enables DSM to explore new markets and to support their mission to make an impact by saving lives. In the Brazilian Amazon, BoP Inc. assisted ICCO and Grupa Orsa, a local company, to explore market based pro-poor innovation solutions for renewable energy instead of unsustainable philanthropy. The project offered important learning insights. The focus in 2012 is on up scaling this project. Along the same lines, TNO and ICCO, as part of a Dutch consortium, prepared a food security project to develop an innovative concept for breeding and creating a value chain of insects for human consumption in Kenya. The actual pilot will be presented for external funding in 2012.

The companies ICCO works with value our guidance to help solve social issues.

Compensation

ICCO’s FairClimateFund gives companies the opportunity to scan, reduce and compensate their carbon footprint. In return, the Fund invests in climate projects in developing countries to ensure that poor households gain access to clean energy, economic development, and the CO2 market. Since 2011 IMTECH, a Dutch technology company, and the company “Mijndomein” who leases CO2 neutral cars, compensate for the carbons which they cannot reduce through ICCO’s FairClimateFund . This resulted for example, in a more efficient cook stove for 21,500 families in India.

Annual Report 2011

How does ICCO involve the private sector in new forms of business oriented development cooperation?

Photo: Anne van Gelder / Max Havelaar

Fair & Sustainable Holding BV

The Fair & Sustainable Holding BV (F&S) founded in 2008, reflects the growing importance of the private sector related activities in the work of ICCO. The F&S Holding has made some good progress in 2011, mainly through its subsidiaries: F&S Advisory Services and the FairClimateFund. The total turnover was 1.9 million Euros resulting in a net result of 86,000 Euros. The growing involvement of private sector includes a number of different ambitions, such as: • A desire to be more business oriented and to have a wider range of options to support businesses and civil society building in developing countries • A wish to attract other types of funding by entering commercial parties • A desire to enable more cost-effective ways of funding initiatives • A will to strengthen cooperation with companies in developing activities • A wish to market specific capacities and expertise of the ICCO staff to clients These activities can be split into two main groups:

1. Those leading to a participation as shareholder in private sector initiatives, with a clear financial investment and risk component, and with income mainly expected from future dividends (F&S Participations) 2. Those involving mainly the provision of services to external stakeholders with primarily a direct cost element, and with income mainly expected from fees and other expenses charged to clients and external financiers

5.1 F&S Advisory Services BV

F&S Advisory Services had its first full year in 2011. The annual turnover was 1,217,893 Euros with a net profit of 105,383 Euros. Still most of the assignments (77%) were done for ICCO, but the number of other clients increased to fifteen. Most of them were development organizations, but also there were some private sector participants that decided to consult F&S Advisory Services for advice. The most prominent new clients were; Agriprofocus, the Dutch Red Cross, Fair Access to Quality, Yiriwa SA. and Textile Exchange. Most of these new clients start with small assignments, but so far our experience is that they come back for follow-up or new assignments, meaning that they are satisfied with the services delivered. The average score of 7.4 points received in the customer satisfaction survey shows this appreciation. We know that it takes time to build up a track record, get large assignments from new clients and to reduce the level of dependency from ICCO. Even though F&S Advisory Services succeeded to increase its

Annual Report 2011

external non-ICCO clientele from 12% in 2010 to 23% in 2011, the business plan target of 27, 5% was not reached yet. This happened also as a result of ICCO taking on a lot of additional assignments.

In a strategic planning session F&S Advisory Services decided to sharpen its focus more into becoming a “responsible business”. All services will be redefined to support development organizations and companies that want to engage in business activities in developing countries. In addition, F&S Advisory Services has decided to strengthen its local consultancy network in developing countries, also to invest in market research in order to identify the needs of the private sector, and to invest in internal capacity strengthening of some of the the F&S Advisory Services consultants, all of this decisions having the common objective of providing services that are demand driven, and that are of high quality and affordable.

The total number of staff increased to fourteen in 2011. An office manager was appointed and two new consultants were hired. Two consultants left F&S Advisory Services, one in the beginning of the year and one at the end, and promising new staff replaced both of them. In addition F&S Advisory worked with associated consultants on a number of assignments, either because of lack of capacity or to add specific expertise. F&S Advisory Services intensified its collaboration with F&S Ethiopia, where a new manager was appointed in June. F&S Advisory Services will support the growth of F&S Ethiopia to become an important Ethiopian consultancy company with 5-8 staff by the end of 2012. F&S Advisory Services will start a similar consultancy company in Mali in January 2012, and has already recruited the new managing consultant to run the company.

5.2 F&S Participations Interests BV F&S Participations has committed to a 5% participation in Africa Juice Tibila Share Company, a passion fruit farm including a fruit processing plant in Ethiopia. These shares purchased for a value of USD 505,000 will be transferred to a local cooperative of small passion fruit producers who deliver passion fruit to Africa Juice. The share transfer will take place as soon as the cooperative has sufficient capacity to become the owner,

something that is expected to happen in 2013. F&S Participations holds these shares on behalf of Rabobank Foundation and ICCO.

5.3 F&S do Brasil Ltd

Registered in 2010, the subsidiary F&S do Brasil, together with CTI in Brasilia, an ICCO partner, participated during 2011 in Fruta São, a fruit processing factory in Carolina. CTI supports the fruit collectors for collecting mainly bacuri and caja berries. All collection areas are within 100 km distance of Fruta São factory. The factory made considerable progress and the factory was refurbished, its client base was developed and the producers were organized. As Fruta São is located in a very remote area, there were some troubles in getting the qualified administrator for the administration and book keeping. In order to solve this problem, accounting services were hired to get everything in order.

F&S do Brasil is preparing an investment together with the VAR Brasil and World Wide Recycling in The Netherlands to set up a processing industry whereby carbon credits are generated by low-income people, doing so through the collection and processing of acai waste into an exportable biomass in Belem. By organizing the collection mainly through “catadores” (waste collectors), new income earning opportunities are created for a substantial number of disadvantaged people.

5.4 F&S Ethiopia Ltd

After the arrival of the new manager in June 2011 things started to move better in Ethiopia. We hired new staff and did a lot of networking and acquisition to attract new clients, which was quite successful. F&S Ethiopia works with ICCO, Agriprofocus, Scope Insight, Terrafina Microfinance, Share People, LEI, Wageningen University, Africa Juice and a dozen others. Many of these organizations are Dutch NGOs or companies. Since the Dutch business community takes a strong interest in Ethiopia, there are good opportunities for F&S Ethiopia to offer their services at a reasonable price. The net profit of F&S Ethiopia in 2010 was EBirr 7,045, which is approximately 320 Euros. The number of staff increased slightly: a part-time office manager was hired and two new consultants, as well as a number of associated consultants were

appointed. In addition, a number of associate consultants have been selected and engaged in specific projects or assignments. F&S Ethiopia also moved to a bigger office, situated in the same building.

5.5 FairClimateFund BV

It was a promising year for FairClimateFund. The most crucial condition for the subsidy of Schokland, a loan agreement with a commercial bank, was fulfilled in 2011 when ING signed a loan agreement for a total loan of 4.3 million Euros. The total fund size, with subsidy, amounts 11 million Euros, including ICCO and Kerk in Actie co-investments to work in three large projects that generate carbon credits. Contracts for carbon credits purchase are signed with NOVA, in South Africa, and with ADATS, in India. In 2011, a new contract was signed with Janara Samuha Mutual Benefit Trust (JSMBT) for implementation of 43,000 cook stoves. Small households reducing their CO2-emission produce these credits and generate extra income at the same time. FairClimateFund cooperates closely with the Fair Climate program of ICCO (see chapter 9), Kerk in Actie, WindunieTrading, Greenchoice, Beco, TNO and MilieuCentraal. 2011 was a crucial year for increasing the sales levels of pro-poor carbon credits. This was quite successful. Total income from sales of carbon credit sales was 358,000 Euros, as reported in the Financial Statements. The total sales volume contracted in 2011 was 530,000 Euros, compared to 20,000 Euros in 2010, resulting in a factor 25 increase of sales. Some carbon credits could not be delivered and paid due to of partners (118,000 Euros).

In total 64,000 tons of carbon credits were sold, compared to 1,800 in 2010. The majority, more than 58,000 ton, is sold to companies for contributing to their corporate social responsibility programs and also to intermediate resellers. Clients include Greenchoice, Good & Green Guides, Imtech, New Forsight/ForeFinance, De Veldkeuken, Initiatief Duurzame Handel, Balthazar Evenementen, Triade Party Rent, Wonderware Benelux, Hartgerink en Klomp, Verre Naasten, EED (Germany), Menz en Media, NedBank (South Africa), and NMZ (Germany), among others. Only 1 % of carbon credits were sold to private persons in The Netherlands. In total 17% of the turnover happened through Dutch clients (private, companies, NGOs), 43% to European clients and 40% to non-European clients.

The first Gold Standard credits from South Africa were delivered by NOVA to FairClimateFund. A new cooperation with Simgas was started, to test an innovative automated monitoring device, in joint cooperation with TNO. Simgas produces local prefab bio-digesters for households in rural and urban areas, and will organize the testing of this monitoring device in Tanzania. This innovative gas measurement device will enable carbon credit income for African biogas users.

FairClimateFund sold in 2011 64,000 tons carbon credits compared to 1,800 in 2010.

Annual Report 2011

How does ICCO connect poor people to value chains?

Photo: Christoph Pueschner / ACT Alliance

Fair Economic Development Program

Improving the situation of small producers, workers and local small and medium enterprises is at the center of our Fair Economic Development Program (FED). We support them to get an honest price for their products and we facilitate access to knowledge and experience, financial resources and to markets towards sustainable and socio-economic security.

6.1 INTRODUCTION ICCOâ&#x20AC;&#x2122;s model of connecting poor people to value chains has three important pillars:

1. We help small producers to get organized in producer organizations so they can obtain a stronger position in the value chain. We support the development of local entrepreneurship 2. We connect the far ends of the market (national and international companies) to producer organizations 3. We develop access to financial services. Such as medium and micro finance, insurance products and savings etc. through both capacity development of finance institutions and economic initiatives

Expenditures of intervention strategies in % * Civil society development

Lobby and advocacy

20%

52% 28%

Direct poverty alleviation

At the center of our Fair Economic Development program is the idea of improving the situation of small producers and workers and local small and medium enterprises.

* See page 21 for explantion of strategies.

Annual Report 2011

Core data Fair Economic Development Expenditures in 2011: Number of countries: Number of partners: Number of households reached:

â&#x201A;Ź 23,682,377 27, Africa (14), Asia (5) and Latin America (8) 257 2,800,000

It has been a challenging and interesting year for the FED program. ICCO had to make tough choices and keep only the most promising partnerships because of budget cuts. This was the second year that ICCO was fully decentralized all over the world, and it was a year to harvest some of the benefits of being closer to our partners, while at the same time overcoming the challenges of the distance between the Global and Regional Offices.

6.2 RURAL ENTREPRENEURSHIP AND PRODUCER ORGANIZATIONS

A stronger value chain focus of partners is the result of continuous expertise improvement of NGOs in providing value chain services as well as their increasing commitment to cooperate with others. Whereas in the past NGOs tended to market whatever products and whatever quality were produced by their target group, nowadays they select more promising value chains and focus on one or on a few. An increasing number of the partners are starting to charge fees for their services, a fact that indicates a more business minded approach as well as increasing quality of services. An important issue for ICCO and its partners, in the countries we work, is the capacity development for rural entrepreneurship and producer organizations. For some specialized roles we cooperate with northern organizations such as Fair Match Support, Taste, People for Earth and Textile Exchange. They specialize on building capacities of more advanced producer organizations to meet international standards and link to international buyers. An interesting example of a new FED program is the one Angola, It started at the end of 2010, but during 2011 it was able to make important progress by

connecting to other development organizations and focusing on promising value chains such as coffee and potatoes. So far, 8,000 cooperative members (25% women) have increased their income from the sales of these products by 7%.

6.3 INCLUSIVE VALUE CHAIN DEVELOPMENT

The Sustainable Trade Initiative (IDH) is an important partner in opening up markets for small producers. ICCO cooperates with IDH in projects for better cotton (BCI), forests (TAA) and is also working on a new initiative in fruits and vegetables. Also, through our partner Fair Match Support we are indirectly supporting the set-up of the cashew program.

Through our active participation in the Better Cotton Fast Track Program, our investment in cotton farmers (350,000 Euros) is more than ten times doubled by IDH and the private sector, with a total of 4.5 million Euros. This has been used to give the opportunity to implement better agricultural practices to 120,000 farmers in the supply chains of participating retailers. Textile Exchange created transparency for 140 organic cotton producer organizations profiling their business on the website which improves their marketing towards the textile industry. Organic seed production and improved communication between local certifiers and with the Indian certification body Apeda improved the integrity of organic cotton in India, through the collaboration between Textile Exchange, Solidaridad and ICCO. The cotton program of Chetna Organic in India linked to new markets both in India and abroad, in the fair trade segment. Some 10,000 farmers were involved in 2011, and according to a sample household study, average household incomes increased by 48%, migration dropped from 38 to 3%, and access to credit increased from 28% to 89%. Shop for Change, an Indian initiative focusing on a growing middle class in India, sold certified products (textiles but also mangos etc.) for 500,000 Euros.

6.4 FINANCIAL SERVICES

ICCO is a strategic financer, and grants are making place for other financial modalities such as, loans, guarantees and participations. Non-grant financial modalities have huge advantages, like being market

conformed, enhancing the self-esteem and ownership of the receiver, and involving the investor in the project.

The so-called LPG Fund, which was established in 1997 and is part of the financial services component of ICCO’s FED program manages loans, guarantees and participations. The Fund aims to leverage partners funding from social and commercial investors and banks, and serves primarily value chain development initiatives and finance institutions in rural areas. Partnerships have been established with international traders, NGOs, capacity builders, network/platform organizations and governmental organizations, focused mainly on East Africa and South America.

TERRAFINA MICROFINANCE In collaboration with Terrafina Microfinance, the African financial service program consisting of a collaboration between Oikocredit, Rabobank Foundation and ICCO, we held joint planning sessions in Mali and Rwanda. Furthermore, value chain initiatives are now at the center of the collaboration as anticipated from the change in composition of the joint portfolio going from microfinance to value chain initiatives. The collaboration will also result in better coordination of capacity building and technical assistance to joint partners.

ICCO makes use of its narrow collaborations with several specialized financial institutions, like Oikocredit, Triodos Sustainable Trade Fund, the Rabobank Foundation and various local banks in different developing countries in Africa, Asia and Latin America to provide financial services. In 2011, ICCO also signed the ‘‘Principles for Investors in Inclusive Finance’’, a set of seven principles on products, client protection, fair treatment and balanced returns. UNPRI hosted this initiative. During 2012, ICCO will look for active translations of these principles into its operations and reporting.

OIKOCREDIT

In 2011, ICCO and Oikocredit signed a renewed framework agreement covering the period 20112015 to make their collaboration more deliberate through the development of joint action agendas per country. They held joint planning sessions in Guatemala and Philippines. Exchange of data on the joint portfolio became technically operational through the so-called ”handshake” between the two databases of Oikocredit and ICCO. Exchange is done on a quarterly basis. During 2011, the handling of the Oikocredit guarantees has been decentralized to the Regional Offices. In 2011 ICCO Alliance partner Oikocredit continued working on capacity building interventions in the areas of social performance management, market coverage, product development (in particular agricultural value chain finance) and risk management. In total 98 interventions were supported and ICCO financed 76 of those.

Photo: Bernd Out

SCOPEinsight ICCO supported SCOPEinsight both financially and by linking it to its partners’ network. SCOPEinsight is an independent rating agency, that assesses the level of professionalism, reliability and creditwothiness of producer organizations. SCOPEinsight profiled 74 producer organizations to date, thereby reaching over 225,000 individuals in ten different countries in four different sectors, and many different crops, both cash and staple crops.

Annual Report 2011

GUARANTEES ICCO provides guarantees to leverage funding from commercial and social investors for our partners. ICCO provides guarantees to Oikocredit, western banks (such as Triodos Bank, ABN-AMRO Bank) as well as to local banks in a number of countries. Finance institutions, production and trade initiatives use loans issued by Oikocredit, western and local banks.

Table 2: Number of active guarantee projects

Oikocredit Western Banks Local Banks Total

2010

2011

-9,8%

16,7%

50,0%

106

102

-3,8%

Like in 2010, ICCO approved 29 new guarantees in 2011. Twenty with Oikocredit, six with western banks and three with local banks fot a total amount approved of 6,993,884 Euros. Due to these newly approved guarantees, new loans could be issued for 12.6 million Euros. This amount is significantly higher compared to previous years because of a substantial guarantee approved for the FairClimateFund.

Table 3: Loans outstanding related to the ICCO guarantees (in Euros) € Oikocredit Western Banks Local Banks Total

2010

2011

21,044,828

22,123,127

2,069,144

2,115,388

2,058,511

3,420,993

25,172,483

27,659,508

Total liability of the guarantee portfolio grew in from 10,568,800 Euros in 2010 to 11,013,937 Euros in 2011 (see Table 4), despite a decrease in the number of active guarantees (see Table 2). Table 4: Total liability (in Euros) €

2010

2011

Oikocredit

8,314,896

7,964,750

Western Banks

1,159,572

1,161,303

Local Banks

1,094,332

1,887,884

10,568,800

11,013,937

Total

The growth is explained by increasing averages of amounts committed by ICCO mainly in average guarantees to local and western banks and the amounts outstanding. Oikocredit remains the key partner of ICCO in the guarantee portfolio representing 72% of ICCO’s liability.

In 2011, ICCO issued guarantees for projects in 26 countries. Comparing to 2010, Rwanda was added to the list whereas Azerbaijan and Kazakhstan dropped from the list. A total of 70% of the projects, representing 80% of the guarantee portfolio falls into nine countries: Bolivia, Brazil, Ethiopia, Ghana, Madagascar, Mali, Peru, Philippines and worldwide projects. Brazil, Ethiopia, Ghana and the Philippines are among the growers. Bolivia and Peru show shrinking portfolios.

The capital at risk is the amount of money that ICCO may lose due to risks that ICCO is encountering. ICCO distinguishes between country risk and project risk. ICCO relies on the data that Oikocredit is using for their provisioning. Only if ICCO has good reason to deviate from the Oikocredit assessment, risk addition takes place. For assessing the guarantees to western and local banks, ICCO makes its assessment based on credit insurance company Coface. For the purpose of a solid and unified risk assessment base, a manual has been produced for the ICCO staff in 2011.

Table 5: Capital at risk (in Euros) € Oikocredit

2010

2011

Difference

1,317,338

2,108,459

791,122

Western Banks

343,826

576,848

233,022

Local Banks

356,718

678,790

322,073

2,017,881

3,364,097

1,346,097

Total

By the end of 2011, the capital at risk for guarantees has grown significantly to 3,364,097 Euros in 2011 from 2,017,881 Euros in 2010. This represents an increase from 19,1% to 30,5% of the portfolio. For 86% this increase can be explained by an increased amount of 890,400 Euros in provisioning on the portfolio by Oikocredit. Oikocredit assessed higher ris projects, which accounts for 80% of

the increased provision. ICCO also assessed the project risk higher, particularly in the portfolio with western banks. This increase is related to one specific project in Mali. Increased project risk explains for 57% of the increased provision on the guarantee portfolio.

Country risk increased in fourteen countries out of 26 countries, explaining 43% of the increase in provisioning. Risk increased in a number of countries with significant concentration of projects and funds involved (68% of ICCO’s portfolio), in particular Ethiopia, Bolivia, Brazil, Ghana, Mali, Peru and Philippines. Along with the increase in country risk in a number of countries with concentration of portfolio, also projects risk has increased for 25% of the projects in portfolio. The total risk involved in these 25 projects, represent 49% of ICCO’s portfolio under guarantees. A provision of 70% has been taken for ten projects whereas five projects (with four partners) have been provisioned for 100%. ICCO is well aware of this relative high capital at risk when compared to the portfolio size as part of its mission to provide capital to the emerging financial markets of developing countries thus stimulating confidence and track record for new players on these markets. Two guarantees being called for in 2011 have been paid in the total amount of 130,766 Euros.

LOANS

At the end of the year, ICCO’s own portfolio, excluding F&S Holding BV contained thirteen active loan projects (it contained 12 in 2010) with a total

amount outstanding of 6,192,956 Euros and 2.4 million Euros disbursed in 2011. One new loan project was approved for 150,000 Euros and partly repaid by trade house in Mali. Besides, there were the two subordinated loans to the FairClimateFund. The amount outstanding for these two loans (3,057,116 Euros) explains for the major part the difference in loans outstanding between 2011 and 2010. Two loans, to Savanna Farmers Marketing Company and Unseen Products respectively, have been converted into equity. For two partners, the amounts outstanding of 220,385 Euro have been written off in 2011. An estimated 1,918,403 Euros out of the 6,192,956 Euros outstanding is at risk, bringing ICCO’s loans average risk of default down to 31% compared to 54% in 2010.

EQUITY PARTICIPATIONS

The equity portfolio contains eight active equity projects with a total value of 1,248,570 Euros, five files less compared to 2010. In 2010 it was 1,972,738 Euros. Savanna Farmers Marketing Company was the one project added to the equity portfolio after conversion of the loan into equity. The major explanation for the reduction in portfolio is that ICCO incurred in some losses in the bankruptcy of Yiriwa in Mali and amounts partially written off in two other projects. The total loss for ICCO amounted to 976,611 Euros. The fund had a small currency gain of 7,107 Euros. ICCO holds minority shareholding positions in all cases. In the case of Unseen Products, ICCO holds 49% as was in the case in Yiriwa that was declared bankrupt on December 2011. The two positions ICCO holds in

Best practice Coldis - Madagascar In Madagascar, ICCO partners active in the clove value chain obtained substantial loans from three banks (total value exceeding 2 million Euros, and ICCO guarantee ranging from 25-50%) to fund the spice trade. This helped to boost the turnover of producer organization COLDIS, though sufficient capital remains a challenge, as the clove world market price is very high at the moment. Photo: Victor van der Linden

Annual Report 2011

finance banks in Bolivia (Banco FIE and Ecofuturo) resulted in modest dividend payments (together 18,273 Euros). Considering an estimated 311,282 Euros at risk out of the 1,248,570 Euros equity portfolio, the average risk of loss is 25%.

not come overnight. It means connecting different worlds of producer organizations, private enterprises and financial institutions each with their own objectives and cultures, and that takes time.

6.5 INVESTMENT FUND

By December 2011 an assignment was given to develop a business plan and to establish the Investment Fund of the ICCO Cooperative. This Fund creates a leverage to attract other sources of capital such as private equity funds, institutional funds, and other venture capital. The Investment Fund serves as a tool for southern and global alliances and coalitions that need venture capital for growth and expansion on the demand-side, and institutional, private and for other investors seeking investment opportunities with an attractive social and economic return on the supply-side. We expect decisions regarding the proposed set up of this ICCO Investment Fund during the course of 2012. These decisions will have influence on the existing financial services portfolio.

6.6 SUCCESSFUL

Women in Business The Women in Business Final Event was held in June 2011. Women in Business is a competition organized by the BiD-network and co-funded by ICCO and ING. The competition is open to women entrepreneurs of emerging countries who have created a business plan. Women in Business provides support, coaching, visibility and finance to over 200 women leading businesses in emerging countries. Out of 242 worldwide submissions, five finalists pitched their business plans. The winner was Nathalie Arsonillo, a female entrepreneur from the Philippines, with a business plan for a Mobile Cassava Processing Unit.

6.7 LESSONS WE HAVE LEARNT

In order to be effective, we need a programmatic approach because supporting isolated efforts not only means less impact but also more work to obtain the same results. The FED program has been shaped in such a way that the three objectives (mentioned above) and the three strategies (see Figure, page 35 .) support each other. To make this a reality does

Photo: Rieneke de Man

Best practice Africa Juice- Ethiopia Africa Juice is a Dutch company that produces passion juice for German and Middle East markets. They grow fifty percent of the passion fruit on their own plantation and small-scale farmers produce the other fifty percent. Currently Africa Juice and ICCO are uniting 500 farmers to produce passion fruit for the factory and they are planning to reach out to 1,300 farmers by 2015. Now farmers receive a guaranteed minimum price for their products, but Africa Juice is planning to get a fair trade certification in 2012. ICCO supported Africa Juice to organize the farmers in a cooperative. Together the farmers are producing more effectively by organizing water transport for irrigation, for example. Besides, they are saving money for investing in the plantation and creating a safety net. Currently close to 400 farmers have started growing passion fruit, while about 250 permanent and over 2,000 seasonal jobs (60% women) were created by the Africa Juice plantation and processing factory.

The gender and rights based approach can be more explicitly incorporated but we do not always get gender specific data. Furthermore, if partners do gather these data, they sometimes do not think in terms of the gender impact that their intervention has had.

The linking of financial services to value chains is a work in progress, and we know that we need more effort and coordination is needed to get the components fully integrated. Launching a joint financial product by different organizations, such as life micro insurance in Peru, is quite complex because each partner has its own systems and ways of working.

6.8 NETWORKING

ICCO partners cooperate with a lot of key companies through IDH, FSC, Textile Exchange, Max Havelaar, AgriProFocus and the BoP Inc. Also, ICCO works directly with companies like DSM, Albert Heijn, VAR, Granular and several local companies in developing countries, such as Peru, where local producer organizations collaborate with high

level gastronomic restaurants in several cities. ICCO partners with the BoP Inc. on products for households and producers at the base of the pyramid; these are the four billion people on our planet, of which a quarter lives off less than $2 per day. Current products under project are a test kit for antibiotics in Africa and rural electricity in remote areas in Brazil.

ICCO leads the Agri-hubs of AgriProFocus in Ethiopia and Rwanda, while in 2011 one was started in Mali. In other countries such as Uganda and Kenya, ICCO partners are members of the Agri-hubs as well. Agri-hubs focus on promoting multi-stakeholder initiatives on value chain development by promoting farmer entrepreneurship, gender inclusiveness and food security. In Rwanda the AgrProFocus cooperation played a strong role in the development of seven value chains, such as those of maize and rice. In Ethiopia, the cooperation in 2011 lead to a publication on experiences in supporting producer organizations, improving farmer productivity with improved seeds and promoting a gender inclusive approach in value chain development.

Annual Report 2011

How does ICCO empowers people so they can exercise their rights?

Photo: Nils Carstensen / ACT Alliance

conflict transformation and democratization

We address misuse of power, unjust power relationships and their consequences. We do so through local civil society organizations and coalitions in order to strengthen marginalized target groups. The focus lies on empowering these marginalized target groups so that they can exercise their rights and fully participate in and contribute to processes of conflict transformation and democratization.

7.1 Introduction Financial sustainability was a major issue for most partners in 2011, since their budgets were reduced as a consequence of the MFS2 decisions. Partner organizations are developing strategies for income diversification. Finding new donors who pay attention to this area has been quite challenging so far. ICCO paid much attention to present proposals to donor organizations and to react to fundraising calls in the area of conflict transformation and democratization.

Expenditures of intervention strategies in % * Direct poverty alleviation

Civil society development

43 %

26 % 31 %

Lobby & advocacy

* See page 21 for explantion of strategies.

Annual Report 2011

Core data Conflict Transformation and Democratization. Expenditures in 2011: € 12,549,567 Number of countries: 20 Africa (5), Asia (6), Latin America (8) and Middle East (1) Number of partners: 190 Number of households reached: 20,000* * Society as such or groups, but not individuals, is the target group of this program, The 20.000 relates to a specific project.

Empowerment for conflict transformation In 2011 we gave support to eight program coalitions and several partner organizations in Liberia, Occupied Palestinian Territory, Peru, Uganda and Zimbabwe. They empowered marginalized target groups, in particular women and youth, to contribute to conflict transformation. At community level, this comprised the creation of local institutions for conflict resolution and All people have a right to prevention, such as peace committees, and training a peaceful and dignified of the members of these existence. institutions. An example is the situation Zimbabwe, where two organizations, Masakhaneni Trust and the Peace-building and Capacity Development Foundation, built the capacity of more than a thousand citizens to function in Peace Committees responsible for promoting conflict transformation at community level in the Matebeleland and Manicaland Provinces.

Contributing to conflict transformation at community level also included initiatives to re-establish relations and dialogue between different parties involved in conflicts.

Human rights and rule of law

The fight against impunity In a wide range of countries, including Cambodia, El Salvador, India, Guatemala, Occupied Palestinian Territories and Zimbabwe our program coalitions and partner organizations took initiatives to promote

the rule of law, civil and political rights and/or human rights. The “Children at Risk program in Guatemala is one example of this. This program focused on the prevention and eradication of child labor and on promoting child rights. In 2011, we held workshops for children featuring topics as self-esteem, child labor, child-abuse, child rights, gender, violence against women, the importance of education. In rural communities we organized a campaign to prevent violence against women. One partner organization monitored whether companies complied with labor rights and whether they employed children. Workers were supported in their claims about violation of workers’ rights, such as in the case of the Alianza Fashion Company. In Zimbabwe, the Legal Resources Foundation provided access to legal justice on a pro-bono basis for 10,955 cases in the period between August 2010 and July 2011 for people from poor and marginalized communities who would have otherwise been denied justice. Of these cases, 7,594 were resolved. These cases set an important precedence of increasing public confidence in the legal system to protect the rights of marginalized groups. Human rights of marginalized groups Many organizations participate in lobby initiatives on human rights. Partner organizations in Paraguay played an important role in the design of a National Human Rights Action Plan. The National Human Rights Action Plan outlines the challenges that Paraguay faces on administration of justice and impunity, indigenous peoples and women’s rights, inequality and discrimination, economic, social and cultural rights, as well as in combating poverty.

Human rights defenders Besides, thirty partner organizations provided protection and support to human rights defenders. In Peru, for example, partner organizations supported more than sixty leaders, who were on trial for defending the rights of communities affected by the exploitation of natural resources, especially mining. Two of these leaders, whose cases were emblematic, were acquitted of the charges. However, five leaders are still on trial. Rights to land and other natural resources In several countries, such as Vietnam, Cambodia, Indonesia, India, Bolivia, Brazil, and Paraguay,

partner organizations took initiatives to empower marginalized target groups to claim their rights to land and other natural resources.

Gender

Women received special attention within the conflict transformation and democratization program. First, by supporting women and girls who were victims of sexual and gender based violence. This resulted in over 17,000 women receiving support in 2011, in amongst others Democratic Republic of Congo, Kenya, Uganda, Peru, Brazil, El Salvador and Nicaragua. ICCO considers United Nations Security Council Resolution (UNSCR) 1325 and 1820 as important instruments to fight sexual and genderbased violence and to strengthen female leadership and the socio-economic and political participation of women.

We supported 17,000 women and girls who were victims of sexual and gender based violence. Secondly partner organizations have also been active in trying to influence the design and implementation of national action plans on these resolutions in their own countries, by undertaking lobby initiatives and/or advocacy campaigns. Such initiatives were undertaken in amongst others Cambodia, Afghanistan, Burundi, DR Congo, Zimbabwe and Nicaragua.

Strengthening democratic society

We focused simultaneously on promoting participation of marginalized target groups in local decision making processes, and on improving the capacity of partner organizations and their target groups to demand accountability of local state players. In different countries, our partner organizations informed and educated marginalized target groups, in particular women and youth, about their rights and how to claim these rights. This included support to target groups to voice their needs and wishes in dialogue and interaction with local authorities. This can be illustrated by the following two examples in Kyrgyzstan:

Photo: Marcella Bos

best practice The land an forest coalition Five organizations are working together around rights to forestland in the Land and Forest Coalition in Vietnam. The coalition works to improve the situation of poor and marginalized communities, by supporting them to increase their access to, and control over, resources on which they depend. This coalition advocated with the government to allocate forestland, occupied by forest enterprises, to local communities in Thua Thien Hue and Lang Lang Son provinces. Forest land, approximately 1,925 hectares, was allocated to these local communities. Most important is the fact that the coalition was successful in building the awareness of poor communities on rights to land and other natural resources. For example, people in Na Lam village (Van Kieu ethnic group) started to claim their rights to land, which was traditionally used by them, but that is now under the ownership of a private company, with government institutions at community, district and provincial levels.

Annual Report 2011

• A federation of self-help groups was established among the internal migrants communities around the capital of Bishkek, • In rural areas a platform for migrants claimed their rights to establish interaction with the authorities. In the run up to the national elections, the Liberia Peace building and Democracy Program organized four electoral debates in different districts in Bong County. During these debates citizens had the opportunity to discuss with candidates to political positions on issues of governance. The participation of citizens in these debates was high: approximately 3,000 persons attended.

Democratic processes at grass root level, such as the self-help groups in Kyrgyzstan, often play an important role in enhancing democracy in countries. Enhancing grassroots participation is a strong mechanism to improve just and sustainable societies. Keeping duty bearers accountable is another important mechanism to do so.

7.2 Lesson we have learnt

We empowered women to contribute to conflict transformation and democratization. This included building the capacity of women in places such as Nepal, the Philippines and Brazil to participate actively in political decision-making processes at local, national and international level. Besides, over two hundred women in the Philippines, Peru and Nicaragua actively participated in political decisionmaking processes, by standing as a candidate for political bodies or by taking up other leadership positions, for example. The coalition “Art of Collaborative Leadership” in Nepal, initiated a few years ago by partner organizations, initially showed a lot of potential in making joint efforts towards peace building, but is dormant at this stage. There seem to be a number of reasons for this situation. One reason is that the partners are working in different settings and at different levels, and are therefore, quite spread out.

Another reason is that some partner organizations have less interest to participate in this coalition because they are already involved in many large networks with similar purposes. Some partner organizations are networks by themselves or they have initiated wide networks on their own. Our partner organization Women’s Rehabilitation Centre (WOREC) was active in 2011 in strengthening the National Alliance of Women Human Rights Defenders (NAWHRD). In 2012, the partners themselves need to make an assessment to see whether there is some value addition to re-forming the coalition Art of Collaborative Leadership.

7.3 Lobby and advocacy

Throughout the world, partners are confronted with shrinking political space, with threats coming from all sides. In 2011 ICCO informed the Dutch ambassador on Human Rights on several issues, preparing his trip to the Organization of American States (OAS). Through our Regional Offices in La Paz and Managua we received information on human rights violations and shared these with the ambassador, who furthermore coordinated with the local ICCO-staff in Nicaragua . The dialogue with embassies and the Ministry of Foreign Affairs in The Hague was continued. In The Netherlands the contacts with the “Breed Mensenrechtenoverleg” were improved and jointly comments were made to the new human rights policy of the Ministry of Foreign Affairs.

7.4 Networking

We help to connect people and organizations on local, national and international level in order to strengthen the impact of their individual activities through several networks. Such is the case with networks related to the defense of human rights. Here local organizations are facilitated to bring human rights cases to the national and international level, thus putting pressure on human rights abusers. Another example in 2011 relates to the right on land and natural resources: we co-financed a scientific seminar on land rights in Sussex. We helped exchange knowledge between scientists from the North and the South.

Annual Report 2011

What is at the core of our food and nutrition work?

Photo: Marieke Viergever

FOOd and nutrition security program

Every person on earth has the right to have access to adequate food. Improving the food and nutrition security of small-scale rural producers is at the core of our work. We support them to sustainably increase production for a better income and for better nutrition. In addition, we work with key partners from local to international level, to improve policy environments to ensure that our successes endure.

8.1 Introduction International attention to food and nutrition increased in 2011. Many players are looking at the link between agriculture and nutrition especially. ICCO, being a member of The Netherlands Working Group on Nutrition, has been involved in a desk review as well as in missions in Ethiopia and Bangladesh to investigate this link in bilateral programs. This resulted in an expert seminar with a large number of participants. The Dutch Ministries of Agriculture and Foreign Affairs were enthusiastic and recognized the knowledge and experience of ICCO in this area. In 2011, world food prices rose to new record heights. Drought in the Horn of Africa affected the food security and livelihoods of many people, especially in Ethiopia. Partner organizations had to reschedule their operations in 2011 to be able to address this emergency situation.

Expenditures of intervention strategies in % * Direct poverty alleviation

51 %

Civil society development

35 % 14 % Lobby & advocacy

* See page 21 for explantion of strategies.

Annual Report 2011

In several countries, special attention was given to try to link agricultural to nutrition. Home gardens Core data Food and were established and they served two purposes: Nutrition Security program. diversified diet for the family and increased income. In many other countries agricultural production Expenditures in 2011: â&#x201A;Ź 2,199,123 increased and diversified, most often making use of Number of countries: 14, Africa (8), Asia (5) and Latin agro-ecological or organic farming practices. America (1) Number of partners: 55 In India the impact of climate change on food security Number of households reached: 50,000* and related adaptation was investigated with the assistance of Wageningen University. The hypothesis * Only groups reached through direct poverty alleviation project. that detailed information on climate change and potential impact would be very helpful was not confirmed. Farmers still have many other pressing Related to international food governance, civil society factors to take into account, such as their access organized itself in the Civil Society Mechanism with to land and inputs. However, the climate change the objective of improving and strengthening its data proved to be an useful tool to inform about voice towards the UN World Committee on Food future livelihood options. Using Indiaâ&#x20AC;&#x2122;s experiences, Security. ICCO supports and is part of the Civil Society partners in Bangladesh started to debate the level of, Mechanism, and made attempts to link partners in and the need for, adaptation to climate change in the Eastern Africa with this mechanism, making use of food and nutrition security program. the African Right to Food Network, also supported by ICCO. The international movement to Scaling up Finally the issues of land, access to land and land grab Nutrition gained strength, although there is some are high on ICCOâ&#x20AC;&#x2122;s agenda and also in the agendas of criticism on the perceived focus on food fortification partners at regional and global level. This resulted and lack of accountability, some ICCO partners (esp. in strategic discussions with the Institute for Social in Mali) play a fore runners role, by stimulating Studies (ISS) by specialists to help guide ICCO in stronger government attention for nutrition the regions to deal with land grab. In countries such as South Africa, Indonesia, India and Madagascar In The Netherlands new partners actively advocate for access to land and land policy was defined for food reform. security. This triggered ICCO is convinced that hunger 8.2 Success (in progress) strong national attention Success with many new players, and malnutrition can only be In most focus countries women and female-headed especially companies. solved if industrialized and households are specifically targeted by the food and Counting with a presence developing countries combine nutrition programs. In Bangladesh thousands of and track record on this efforts. women were elected as members of the executive theme in several focal body of federations as a result of this focus. countries ICCO staff paid orientation visits to In progress embassies to find out where and how ICCO programs Partners are more and more enthusiastic in doing and activities could align with new Dutch policies. joint analysis, planning and evaluations, as well We also held brainstorming sessions with partners coordination among each other, but where it comes such as BoP Inc. and Nutreco, to look for options for to implementation, they tend to continue with their further co-operation. own projects. They see the implementation part of the joint program as something additional to their In line with the ongoing trend, ICCO strengthened own individual planning. the link between economic development, food and nutrition security within production oriented 8.3 Lessons we have learnt programs and demand supply mechanisms in places In 2011, our partners took a baseline survey defining such as Uganda (through the Agri-hub), Benin and the situation at the beginning of the program, as Madagascar.

Best practice

Photo: Johannes Odé

a starting point for measuring the results and impact of program interventions up to 2015. The implementation of the Household Food Insecurity Access Scale Outreach was a learning experience for most partners, and it was as well as a very useful and easy to implement tool for this purpose. It was the first time that we used such a large-scale household baseline survey for monitoring purposes. Despite some initial hesitance the tool proved to be very successful.

In the program evaluation one of the issues mentioned was the scale of interventions, in general projects are successful at a small scale, but the question that still remains is how to reach out to more people. In Bangladesh an effective combination of interventions and modalities reached over 200,000 households. We need to take lessons we learned in Bangladesh to other countries.

8.4 Networking

ICCO collaborated with Kerk in Actie and Prisma members ‘Dorcas’, ‘Woord en Daad’ in a programmatic approach in countries like Uganda, Burkina Faso, South Africa and India. In South Africa we collaborated in a strict way with a coordinator and in India we chose a more organic way to cooperate.

In Myanmar, where we noted slight improvements in the political environment for civil society organizations, our partners perceived the programmatic approach as a good means to leverage actions and activities, since the number of issues to be tackled in the new context is huge, and this can only be done effectively by joining forces.

Right to Food and Nutrition Watch To monitor worldwide progress towards the realization of the right to food, ICCO publishes the annual Right to Food and Nutrition Watch, in co-operation with FIAN International and German NGO ‘Brot für die Welt’. The Watch offers a learning platform for human rights activists and also reports on violations of food rights. It is an instrument to hold governments and other stakeholders accountable and it provides background information on hunger and malnutrition causes.

In 2011, an external evaluation was executed for the three-year program financially supported by the Turing Foundation in Mali. The Turing Foundation has invited ICCO to a new proposal and some interesting lessons generated from external evaluations and will be used in this project, such as the importance to include an organization that is specialized in nature conservation, when focusing on natural regeneration in a food security program. Partners relied too much on their own knowledge instead of making use of existing specialized knowledge. Working with partners also generates new ideas. ICCO works with TNO, Wageningen University and others towards inclusive innovations in Africa. We promote commercial rearing of crickets for human consumption, in order to increase availability of protein rich food at local markets and at the same time provide a source of income for small producers. During 2011, we identified competent and committed Kenyan partners and we developed concrete plans for specific consumer studies and we also created a technical pilot, to be carried out during 2012 to further strengthen the basis for resource mobilization and future up scaling.

Within the framework of the Amsterdam Initiative against Malnutrion (AIM), we work with Unilever, DSM, AkzoNobel, Wageningen University, Dutch Ministry of Foreign Affairs and others to find sustainable solutions for micronutrient deficiencies. Initially, in 2010 the focus was merely on fortification of food. However, during the course of 2011 the focus gradually shifted and now it also includes the promotion of well-balanced diets based on the concept of food baskets and consumer wants.

Annual Report 2011

What is the answer of ICCO to the unequal division of the carbon footprint?

Photo: Ton Koene

fair climate program

Every person on earth has the right to a fair share of the earthâ&#x20AC;&#x2122;s capacity. In other words every person has a right to an equal carbon footprint. ICCO is experienced in making carbon credits from projects work for the poor from a rights-based perspective. FairClimateFund, subsidiary of the Fair & Sustainable Holding BV., buys and sells the carbon credits.

9.1 Introduction. Vegetation, seas and oceans trap carbon dioxide. Yearly, about 12 billion tons are absorbed. Worldwide, this results in a carbon footprint per person, per year, of about two tons of carbon dioxide. This is the sustainability level. Nowadays, 28 billion tons of CO2 are produced yearly. This means that there is a surplus of 16 billion tons, which contributes to climate change. ICCOâ&#x20AC;&#x2122;s Climate program develops low/zero carbon projects (renewable energy, energy efficiency, carbon neutral value chains) and projects to increase carbon sinks (forestry, agro-forestry, low carbon farming and Redd+).

Expenditures of intervention strategies in % * Civil society development Direct poverty alleviation

15 %

70 % 15 % Lobby & advocacy

* See page 21 for explantion of strategies.

Annual Report 2011

enough bases for carbon development. This does not seems to be the case. The focus will probably Core data fair climate program swift towards fuel-efficient stoves. In Burkina Faso a consultancy study was financed and carried out Expenditures in 2011: € 2,965,742 to assess the possibility to generate carbon credits Number of countries: 15, Africa (7), Asia (4) and Latin on the basis of CO2-sequestration in Jatropha plants which are intercropped with food crops by 12,000 America (4) farmers. The results look promising. Number of partners: 31 Number of households reached: 150,000 In Central America, different alliances, federations and associations of forest communities are working on REDD+ initiatives that are based on the rights of From the beginning of 2011, we implemented the local communities and will ultimately benefit them. program in six regions in specific countries each with Two projects are on the way to registration. a thematic focus. For example, in Central and South 9.2 Innovation America and Southeast Asia the program focuses on Poor families who participate in carbon projects ‘‘Reducing Emissions from Deforestation and Forest should benefit as much as possible through the sales Degradation in Developing Countries’’(REDD+). Our of the credits. However, entrepreneurs increasingly programmatic approach brings together society want to use this income to finance their operations, entities in networks that are or will be supported saying that this will ultimately mean an expansion by carbon credit development teams. These teams of the carbon mode. The Climate program and help member organizations to set up projects whose the FairClimateFund, in cooperation with the Max implementation is financed through the generation Havelaar Foundation and the International Fairtrade and sale of carbon credits. The carbon credits are or Labeling Organization (FLO) are developing a fair will be sold to our FairClimateFund, which buys and trade standard for carbon credits, in order to deal sells the carbon credits generated by these projects with this issue. In 2011, a feasibility study was done on the voluntary Dutch and European markets. to assess the possibilities for such a standard. It was well received by the Executive Board of the FLO and In South Asia a total of will be worked out in 2012. 24 NGOs are developing “As citizens in rich countries 34 Clean Development 9.3 Success (in progress) Mechanism / Voluntary are protected against the Success Emission Reductions negative consequences, the Good progress has been made with the (CDM/VER) projects. poor and vulnerable in the programmatic approach in South Asia, the Horn Five CDM projects are world have to deal every day of Africa, Southern Africa and Central America. registered, two are under with the reality of climate Networks are functioning in these regions. A carbon validation and four are team is available in South Asia. The approach in the stage of project change”, Desmond Tutu. receives ample interests from other organizations design document writing. that results in broader coalitions than originally Additionally there is an envisaged. afforestation/reforestation CDM project that has been registered. This is a major milestone for the In progress carbon credit development teams and the network. In the four other regions, where ICCO is present – West Africa, Central America, South America In South Africa, the number of households benefiting and Southeast Asia – progress has been less from using energy efficiency devices has increased substantial due to the complexity of the approach, from 43,000 to 54,511 in 2011. The project, the lack of knowledge among Program Officers and implemented by partner NOVA, succeeded in 2011 organizations about the way the carbon market can in getting Gold Standard registration. In Ghana, work for the poor, and the controversy which is still research has been carried out to find out whether inherent to this market based approach. the intended focus for the region - REDD+ - provides

9.4 Lessons we have learnt Climate is an important program from the perspective of gender. The position of women, and also children, is dramatically improved through the three projects from which the FairClimateFund is buying the carbon credits. Photo: Haran Kunar

Best practice Biogas stoves for 18,000 Indian families ICCO’s partner, the Agricultural Development and Training Society (ADATS) is presently building an alternative cooking method with 18,000 biogas stoves in the Kolar District in India. Moreover, a carbon credit component was developed by a team of carbon experts and made available to the network by ICCO. Currently, FairClimateFund is providing pre-funding to implement.

Best practice A climate-neutral Ethiopian coffee value chain Coffee-roasting companies in Europe and the US are becoming increasingly interested in the carbon footprint of their commodity. Some of them seek an opportunity to reduce carbon emissions in their value chain. ICCO participates in the design of a climateneutral coffee value chain project that offers Ethiopian coffee farmers the possibility to generate carbon credits. The Southwest of Ethiopia is the region where Cafea Arabica originates and where wild coffee still grows in the forests. The area is very much under pressure because of deforestation, as the coffee farmers need wood in order to cook their food. The project aims at setting up a REDD+ initiative and introducing renewable energy possibilities for cooking.. This project was established in cooperation with the Dutch Fair trade Max Havelaar Foundation.

Up till now, the Climate program has especially focused on mitigation, because of the importance of the development opportunities via the carbon market and because of the niche ICCO sees for itself compared to the niches of other sister organizations. However, it has become increasingly clear that mitigation and adaptation can’t and shouldn’t be separated so strictly. Both aspects are intertwined. The carbon reservoir of forest e.g. is negatively influenced by temperature increase and this requires adaptation measures. But forests also contribute to mitigation by sequestrating CO2. This will be taken into account .

9.5 Lobby and advocacy

ICCO delegated in December a specialist on climate change, a member of the Executive Board and a fundraiser to the international climate change negotiations in Durban. Lots of new contacts were made, some of them with fundraising opportunities. ICCO could as a member the ACT Alliance and Aprodev rely on these international networks, which we supported in the lobby on an international level. The outcome of the conference according to Aprodev was a ’diplomatic victory’ for civil society, because the European Union played a far more constructive role than during previous years. Durban resulted in a new mandate to negotiate a global agreement with all countries, including the bigger emitters like the US and China. The second commitment period of the Kyoto Protocol also resulted in an agreement among some parties, including the EU, to sign a second commitment period. With a lot more to be done on the content this leaves room for progress, which will be followed closely by Aprodev.

Annual Report 2011

What was the input of ICCO in basic services and disaster management in 2011?

Photo: Paul Jeffry / ACT Alliance

other programs

In previous chapters from 6 till 9 described program results that are at the core of the ICCO organization. In this chapter, we mention the other programs that ICCO implements together with other members of the ICCO Alliance.

10.1 Basic Health & HIV/Aids Prisma, an ICCO Alliance partner, coordinates this program. The objectives are: â&#x20AC;˘ Well-established accountability mechanisms in which civil society effectively calls the health system into account for the delivery of equally accessible basic health care â&#x20AC;˘ Capacitated change agents for civil society to promote effective prevention of SRH problems, HIV transmission and disabilities â&#x20AC;˘ Well-established human resources for health policies, strategies & activities that sustain the quality, accessibility and sustainability of the health system through civil society participation.

expenditures of intervention strategies in % * Direct poverty alleviation

56 %

Civil society development

33 % 11 % Lobby & advocacy

* See page 21 for explantion of strategies.

Annual Report 2011

Core data basic health and hiv/aids program Expenditures in 2011: Number of countries: Number of partners: Number of households reached:

â&#x201A;Ź 113,024 3, (Africa and to reagents) 21 89.000

Due to budget cuts on MFS2 the program had to reduce the number of countries from 22 to 16. ICCO is present in three countries and two regions: Angola, Malawi, South Africa, West Africa, strongly linked to the education program, and South America. The drop in funding is a big challenge for partners. They seek closer collaboration with relevant stakeholders like governments. Baseline surveys have been implemented in 2011. The client satisfaction instrument has proven to be a good tool to get the opinion of beneficiaries on the table about the delivered services and to adjust programs accordingly. The tool is being used in Malawi and will be extended to Bangladesh, Zimbabwe and South Africa. Radio programs contributed to the result that people living with HIV, who used to receive ARV drugs from the district hospital, are now accessing the drug at their local health center. The Uchembere Network in Malawi experienced that when people are better informed on maternal health issues, they also demand more for information related to reproductive health. This Network counts nineteen different organizations, ranging from district hospitals to community-based organizations working towards the improvement of maternal health. These complementarities have reinforced each otherâ&#x20AC;&#x2122;s role and results.

When people are better informed they also demand more for information related to reproductive health.

A weighty issue for ICCO is that of gender in basic health and HIV. Our international partners EHAIA

and INERELA+ strongly believe that discussions on sexual minorities need to be preceded by discussions on gender. There is a strong gender component in the newly published SAVE toolkit, developed by INERELA+ in 2011. It was observed that gender issues are considered in the composition of staff teams and management committees, but they are not well thought through in project strategy designs. Experiences have shown, for example in South Africa, that for organizations to be able to translate gender into their programs, their staff needs to understand the concept of gender and its impact on life of men and women and on their development. In 2012, gender is being put on the agenda of all face-to-face meetings.

Success (in progress)

Success More than fifty partner organizations are working with change agents, mostly at community level but sometimes also at district or even national level. The coalitions have almost all been active in capacitating health committees, change agents and/or interest groups at community level.

In progress Religious leaders are being perceived by ICCO as important change agents; however reaching them effectively poses challenges sometimes. The program in Angola is able to reach and train the program coordinators of faith-based organizations but it is a real challenge to get religious leaders actively involved. Here we should seek further collaboration with EHAIA and INERELA+.

Networking

ICCO supports both its own policy development as well as policy influencing in The Netherlands through active participation in different networks. In early 2011 we had a constructive meeting with representatives of the Ministry of Foreign Affairs and the aids ambassador. We presented the program with special attention for how we cooperate with faithbased organizations and religious leaders. ICCO is represented in the core group of different platforms and networks, such as like Share-net and Health Insurance for the Poor (HIP). The newly developed monitoring and evaluation model created to measure the impact of health insurance in low-income countries will be distributed and tested.

We have worked with Stop Aids Now (SAN) in 2011 on combined knowledge development, implementation of projects, lobby and advocacy and fundraising (750,000 Euros). Collaboration and completion with Cordaid has been particularly around our work with religious leaders, with faith-based health providers in Malawi. We support the Ecumenical Advocacy Alliance (EAA), EHAIA, INERELA and Strategies for Hope internationally to reach religious leaders and communities. Also we collaborate with Christian health institutions, e.g. Ecumenical Pharmaceutical Network (EPN). Other important strategic partners are the Women’s Global Network on Reproductive Rights, the Access to Medicine Foundation and the Dutch Coalition on Disability & Development.

expenditures of intervention strategies in % *

Direct poverty alleviation

Civil society development

26%

61% 13%

Lobby & advocacy

10.2 Basic Education

* See page 21 for explantion of strategies.

Edukans, an ICCO Alliance partner, coordinates this program. The overall goal is that partners and their networks in fourteen countries cooperate with governments and hold them accountable for delivering equal learning opportunities and the right of citizens to education. ICCO is especially involved in programs in Burkina Faso, Mali, Senegal and South Sudan.

Core data education program.

The objectives are: • Achievement of enhanced quality and relevance of education for pupils, particularly girls resulting in higher completion rates and better learning outcomes

• Increased and equitable access for children, youth and adults in primary education, vocational and skills training, and functional literacy courses.

The Netherlands government changed its policy in 2010, and education is no longer spearheaded. Budgets for basic education programs have been cut. However, education is still considered as a prerequisite for development in general, and therefore needs ample attention in programs (to be developed) on sexual, reproductive health and rights, food security, water, and economic development. The Netherlands chapter of the Global Campaign for Education has started lobbying on these issues. In 2011, a baseline survey was carried out and a lot of information was generated about the current situation

Expenditures in 2011: Number of countries: Number of partners: Number of households reached:

€ 1.276.880 4, (Africa) 21 6.000

in many education programs. The data collected were much more uniform than in the years before 2011, and comparability over the partner organizations and over the countries.

Lessons we have learnt

Gender is still a weak issue in the country education programs, so it needs more attention in the coming year. Some projects and programs specifically target girls or young women. There is not a consistent approach on gender. Partner Educaids pays attention to gender. In the project “World Start With Me”, an interactive curriculum on sexual, reproductive health and rights, and gender issues are incorporated. “World Start With Me” is implemented in Uganda and Ethiopia.

Annual Report 2011

ICCO decentralized the responsibilities and activities to Regional Offices and specialized partners in the developing countries. However, for post-conflict areas getting competent staff for the Basic Education program has been difficult. This is the case for South Sudan and DR Congo.

ICCO and Kerk in Actie are not able to be active everywhere in the world. That is why we collaborate with the international network ACT Alliance. The ACT Alliance coordinates all the initiatives of its members working in disaster-affected regions.

Most country programs and projects have been evaluated during the implementation period for MFS1 between 2007 and 2011. In 2011, an overall evaluation of the MFS1 Basic Education program started in order to get an overview of the program results. The report will be available in spring 2012.

The Center for Development Innovation of Wageningen University organized a training workshop on multi-stakeholder processes. Staff members of the ICCO Alliance have participated in the workshop. Ideas, tools and skills for program development workshops were designed and practiced. An example of a tool is the P-scan. This is a quick-scan for programmatic cooperation. Staff members tested this tool on their program coalitions.

Photo: Paul Jeffrey / ACT Alliance

Success (in progress)

Success On 18 November 2011, an Education Conference was held in The Hague, organized by the Global Campaign of Education. More than a hundred participants were present. The conference elaborated an agenda for 2015, with ten action-points for increasing access and improving education quality, particularly for girls, through better teacher training and improved parentsâ&#x20AC;&#x2122; participation. Also skillsâ&#x20AC;&#x2122; training needs more emphasis in cooperation with governments and local organizations. In progress Program development in South Sudan has been rather slow during 2011, due to staff changes and the challenging working context in the country.

10.3 Disaster Management

ICCO and Kerk in Actie jointly facilitate the program on Disaster Management. We work together with local organizations, that are actively involved in bettering society even before disasters hit the areas.. Disaster management aims to support victims of floods, earthquakes, wars, conflicts, droughts, and sometimes a combination some of these.

haiti scrambles up Directly after the earthquake in Haiti in January 2010, ICCO and Kerk in Actie started their support, through and with the local partner organizations and in close coordination with the network of the ACT Alliance. Support for rehabilitation soon followed the rapid response aid. New earthquake and hurricane resistant schools were built in the villages around Leogane and in Petit and Grand Goave destroyed school were repaired. ITECA improved the water supply in Gressier and built new houses with the villagers. The rehabilitation is still hampered by the politically unstable situation and the bad socio-economic circumstances in the country. ICCO and Kerk in Actie are working together with the Vereniging van Nederlandse Gemeenten (VNG) at strengthening local governments in cities.

Local organizations are experts in giving solutions to problems in order to obtain an effective support. They know the area, and they can operate without attracting too much attention. An example of this is shown in our work in Kyrgyzstan, where local partners could give a lot of support in a very insecure situation. By driving in the cars that they have always used, they could keep a low-profile without anyone noticing that they transported emergency aid (food). On the other hand, international agencies transports were attacked.

Local organizations are experts in giving solutions to problems in order to obtain an effective support.

Lessons we have learnt

are prepared for disasters as much as possible. Through the ACT Alliance and also in coordination with our own local partners we contribute to strengthening the resilience of the partners and the communities they work with. The ACT Alliance facilitated a capacity development program where the recommended improvements are being implemented. This may be improving the bookkeeping, inventorying faster and better the state of affairs after a disaster, and also learning to coordinate better with other aid organizations.

10.4 Impulsis

ICCO and Alliance members Edukans and Kerk in Actie operate the joint program Impulsis, supporting Dutch civil society initiatives that are engaged in small scale projects of development cooperation. Impulsis offers advice, brokering and opportunities for capacity building, as well as co-financing of smallscale projects.

One of the most important lessons we have learnt over the years, is that the voice and opinion of the victims are most important tool to assess if our support has been effective or not. This is also one of the reasons why it was mainly the victims that were interviewed by the ACT Alliance concerning an evaluation of disaster support in Haiti. In general terms people were satisfied. However as ACT Alliance we reached the conclusion we could have coordinated better and work more efficiently in the area.

As a result of the MFS2 program (2011-2015) Impulsis has reduced its interventions to 21 focus countries and to 16 countries with a limited scale of action. The 2011 project budget was just over 2.5 million Euros and bound to MFS2 criteria. However within the framework of Kerk in Actie criteria and through agreements with three municipalities some additional options exist in a few countries. From 2011 onwards, Impulsis established to co-finance a maximum of one third of the contract budget, resulting in a total (multi-annual) support of 2.66 million Euros.

It is of great importance that the local partner organizations and the victims they work with,

Impulsis’ website was completely renewed in 2011 and has become apt for more interaction with other digital tools and platforms. In cooperation with AKVO, new tools were developed for Impulsis partners to collect specific technical know-how on

In 2010 and 2011 the Samenwerkende Hulp Organisaties organized fundraising actions for Haiti, Pakistan and the Horn of Africa. When large aid campaigns like these take place, the funds for other disasters diminish dramatically. This means that a lot of victims affected by other disasters are not mentioned in the media - they belong to the so-called “forgotten disasters”- and/or are supported less. ICCO and Kerk in Actie have supported organizations in Ghana, Kyrgyzstan, Liberia, DR Congo, Ethiopia, Sudan and Lebanon with funds for the “smaller” disasters.

2011 was part of a transition period with the phasing out of many partnerships from 2010 and before, implementing programs within MFS2 criteria and, last but not least, the start to search for new perspectives and opportunities at medium-term for the post MFS2 era. Because of that Impulsis started to revise its vision and strategy in connection with core programs of ICCO, Edukans and Kerk in Actie. The result is expected halfway 2012.

Annual Report 2011

water and sanitation as well as on education, health and entrepreneurship. Impulsis was represented at 44 events, lectures, trainings and network meetings, coming into contact with over 6,000 persons. Direct support to of local civil society initiatives with partners became more important in 2011, and it is a new approach that requires tuning with the work of Regional Offices. Civil society initiatives-proposals on Fair Economic Development, Food and Nutrition Security, Climate, which are ICCO priority themes, are still rather limited, but often interesting. For example, Guacamaya is a successful pioneer in establishing a forestry project in Guatemala, including bamboo techniques and organic farming. These themes are rather new for Impulsis, and because of that specific policy papers were elaborated for civil society and made available on the Impulsis website.

10.5 WASH Alliance

ICCO is member of the WASH Alliance, formed by six Dutch civil society organizations with extensive experience in water, sanitation and hygiene. Other members are Simavi, the leading agency, AKVO, AMREF, RAIN and WASTE. They have acquired MFS2 funding from the Ministry of Foreign Affairs for the period of years from 2011 to 2015. WASH cooperates with six thematic partners: Wetlands International, IRC (International Water and Sanitation Centre), WaterAid, Both ENDS, PRACTICA Foundation and ETC. The Alliance has currently close to seventy southern partners in eight countries: Bangladesh, Nepal, Ethiopia, Uganda, Kenya, Mali, Benin and Ghana. The main objective of the WASH Alliance is to achieve increased sustainable access to and use of safe water and sanitation services and to improved hygiene practices for women and marginalized groups. Members work with their country program partners through a multi-stakeholder approach. True integration throughout the program is achieved, covering the entire WASH chain from water supply to sanitation and hygiene promotion on community to international level.

In 2011 ICCO realized a lot of preparatory work to build the foundation of the program. Eleven partnerships with local NGOs were concluded that all focused on reaching sustainable access to services in the whole WASH chain.

10.6 Connect4Change Alliance

ICCO is a member of Connect4Change. This Alliance is made by various organizations such as AKVO, Cordaid, Edukans and lead agency IICD and has obtained MFS2 funding for 2011 – 2015 from the Ministry of Foreign Affairs. The Alliance program supports activities being carried out together with preferred partner Text to Change in sectors such as education, health and economic development.

Connect4Change’s mission is to strengthen civil society organizations and their beneficiaries in the use of ICT to achieve their development goals in the above-mentioned sectors. ICCO coordinates the program “ICT for economic development” of Connect4Change. Their strategic objective is to improve the income and employment opportunities of small-scale farmers and entrepreneurs through better access to markets and financial services and to improved productivity using ICT. In Ethiopia, Kenya and Peru the program introduced ICT components to a selection of long time ICCO partners. In Bolivia, Burkina Faso and Mali, both (former) IICD partners, and ICCO partners have been selected to work with. 2011 was a start-up year for the programs. Partners were introduced in the domain of ICT for economic development through country roundtable workshops. Project ideas that surfaced during the workshops were elaborated with advisory support of IICD technical advisors and country managers, and ICCO Program Officers. Towards the end of the year nineteen partnerships between ICCO and local NGOs were concluded. Key areas for support are: access to and distribution of price information and other market related information; strengthening of producer organizations and ICT skills of producer organization leaders; staff and civil society organizations involved in fair economic development.

Annual Report 2011

How does ICCO brand its programs and how are funds mobilized?

Photo: Reuters / Chaiwat Subprasom

communications and fundraising

At the beginning of 2011 ICCO was faced with a totally new situation for its communication and fundraising work. In the past, publications, advocacy campaigns and sponsoring had been covered by the budget for public support, as part of MFS1. The government canceled this budget and ICCO had to reconsider its objectives at a high speed. Altogether 2011 was a transit year, and in it we created more cohesion between communications and fundraising, sought new strategies to brand ICCO, put more emphasis on fundraising an diversified resources.

11.1 Communications In our almost fifty years of existence ICCO built a worldwide large network of partners and put great interest in cooperation with strategic stakeholders. Although reputed the ICCO brand is not very visible in The Netherlands. In order to get ICCO better into the minds and hearts of the audience, in 2011 we decided to put more focus on themes and programs to obtain a clearer profile. Specific target groups were chosen to build prolonged relations.

From its origin ICCO was not active as a public fundraiser, but instead applied particularly for state and institutional donor money. ICCO continues in this direction, but it also markets its effective selling points towards companies and major private donors. In particular, we pay attention to fair economic development. ICCO presents its brand promise around this theme.

Communication strategy

The communication strategy works towards conversation, content and collaboration in the core business to bring the effective selling point and promise for the limelight. Products and services were designed in 2011 for the private sector and wealthy persons that want to invest in sustainable economic programs. They can participate in Donations, Co-creation, Co-financing, Social performance, Compensation and Business for BoP (see also Chapter 4).

The new ICCO branding required also another website setup. It needed to change from a traditional, static and corporate site to a modern, open and specific site with content circling around the brand promise. A striking feature is an e-book with extensive descriptions of projects. The website is only one step in improving ICCOâ&#x20AC;&#x2122;s presentation in new and social media. The Dutch site was launched in February 2012 and it was followed-up by building new international and connected sites of the Regional Offices. The online field of corporate social responsibility has been explored in order to let ICCOâ&#x20AC;&#x2122;s specialists present themselves to potential business partners and to gather information on the new target groups.

Annual Report 2011

ICCO’s corporate identity did not meet the standard of the new brand promise and target groups any longer, and because of that it was necessary to make adjustments to achieve a more businesslike profile, less formative, more progressive, and ready for the future. The process to adapt the corporate identity started in 2011 and was finalized in February 2012.

Media

It was necessary to achieve a more businesslike profile, less formative, more progressive and ready for the future.

In 2011 ICCO gained a lot of media coverage in written press; it appeared on 305 articles, both local and national. The campaign for the victims of the famine in the Horn of Africa by the SHO was important for our presence in the media since ICCO was chairperson of the coalition. The TV-program EenVandaag covered a trip with Marinus Verweij, chairperson of ICCO’s Executive Board, to drought-stricken Ethiopia in two broadcasts. ICCO also gained a lot of attention by its persistence supporting the website of Electronic Intifada for the Palestinians and the objection of the Ministry of Foreign Affairs to that. In November ICCO was in the news because of our partnership with supermarket Albert Heijn in the national newspapers NRC Handelsblad and de Volkskrant. In relation to the United Nations Climate Conference in Durban (COP17) national newspapers Trouw and Reformatorisch Dagblad published some large articles on our biogasinstallation projects in South-Africa. ICCO sponsored a TV-production about a Spang Makandra, a co-creation project in Suriname. It was several times broadcasted on RTL7 and Wim Hart, member of the Executive Board, was interviewed in the studio.

Communication in the regions

Communication and fundraising work is also practiced and growing in the regions. Regional Offices seek visibility and develop step-by-step relationships with stakeholders. The work in the regions is presented in alliance with Kerk in Actie. For this purpose a joint international corporate identity was designed. This identity combines the logos of ICCO and Kerk in Actie. In The Netherlands both brands complement each other, but in the regions they share a joint profile.

Four young communications experts were trained in 2011 and they traveled on a one-year assignment to the Regional Offices in Central America, Central and Eastern Africa, Southern Africa and Southeast Asia. Their task was twofold: first support the communication and fundraising needs of Global Office for ICCO and Kerk in Actie and second develop and implement a regional communication strategy. The

presence of the young communicators gave a big boost to the information flow from and within the regions.

Internal communication

The internal communication of ICCO includes contact between Global Office and the seven Regional Offices. Intranet, e-mail and meetings were used for a constant flow of program, management and “nice to know” information. With video messages, clips and Skype connections regional staff was able to participated in meetings in Utrecht. ICCO also produces an internal Newsletter that was issued six times in 2011. One of the challenges of internal communication is to create the feeling of one team, one ICCO.

11.2 Fundraising

2011 was a critical year in terms of fundraising. The roles and responsibilities were well formulated and fundraising was set in the heart of the organization. Fundraising is not only an activity to gather money, but also the last link in a chain of interaction with partners and donors outside our organization. Fundraising is every day more urgent for ICCO and ICCO is preparing itself for the period post-2015, when MFS2 subsidy ends. Part of the funds of ICCO in 2011 was used for fundraising and mobilizing other resources, as stated in the financial statements. In 2011 the total fundraising costs as percentage of our total income was 1,6%. This percentage is relatively low, because of the fact that a large part of our income is related to the MFS2 grant. To make fundraising possible the Regional Offices are equipped with “Regional Funding Officers”. Fundraising with institutional donors has become an integral part of the mission of the Regional Offices and all ICCO programs need a fundraising plan. We have set the first steps to make contacts with foundations, enterprises and wealthy persons on the Dutch market. It is amazing to see the potential and the possibilities offered there.

Fundraising strategy

As the urgency and necessity of the use of funds for match funding and levering will increase in the coming years, in 2011 targets have been developed for 2015. ICCO developed for its fundraising strategy six products: Donation, Co-financing, Co-creation, Social Performance, Business for BoP and Compensate. A product is an interaction model with the private

sector or donors. Every product has its own rules and conditions. In chapter 4 we report on the products with the private sector in which fundraising is only one and not always the element. Here we focus on Donation and Co-financing.

The applications for funding to institutional donors in the regions tripled compared with the previous year Donation ICCO receives donations based on trust, good relation, information and good examples. They are modest in size - 240,190 Euros - because ICCO does not invest in public fundraising except for special agreements with major donors. ICCO and Kerk in Actie raise in special campaigns funds for specific aims. The revenues are allocated to Kerk in Actie for joint projects.

Some examples in 2011 are the following ones: • In spring, EO Metterdaad, a program of the broadcasting station EO, showed on Dutch TV short documentaries on our Food and Nutrition Security program for ultra poor women in Bangladesh • In July and August ICCO and Kerk in Actie were the lead agencies for the SHO campaign for the drought victims in the Horn of Africa. In Somalia a famine occurred. This national campaign raised 25 million Euros and 2.8 million Euros were channeled through ICCO and Kerk in Actie. Partners in Ethiopia, Kenya and Somalia who were involved in humanitarian aid were able to extend their programs

Co-Financing

European Union We work together with the European Union and other institutions. These cooperations lead to common activities with financial results and they are becoming a core businesses for the Regional Offices. In March ICCO organized her first Regional Funding Officers week. As a result of the investments in regional fundraising the applications for funding to institutional donors in the regions tripled compared with the previous year. The Regional Office Central Asia was successful in applying to the “Instrument for Stability of the European Union” for her peace building and

Photo: Petterik Wiggers

drought horn of africa Through their partners ICCO and Kerk in Actie have supported Somalian refugees with food, water, toilets, tents and basic articles, such as plastic floor cloth, blankets, jerry cans, sleeping mats, mosquito nets and soap. They have also supported people in Somalia (in the regions of Banadir and Lower-Shabelle), also in Kenya in the Dadaab refugee camps and in Ethiopia in the Dolo Ado camps. In Ethiopia and Kenya food and water was also distributed to the most vulnerable people in the districts. In some cases it was possible to facilitate food-for-work programs. Besides, in Ethiopia and Kenya we facilitated activities to let people take up again their own livelihoods. An example was the distribution of tools, but also new cattle was given out, already present cattle were vaccinated against several diseases.

democratization program in the region. The Regional Office Central America & Haiti was successful in applying to the “Non State Actors” budget line of the European Union as well as to the United States based funds for the Climate program. Although a diversification process started successfully, EuropeAid - e.g. food security for ultra poor women in Bangladesh and ECHO, TBBC in Thailand and Dipecho programs in Madagascar - remains an important and stable corner stone for ICCO’s fundraising strategies worldwide. In order to improve the performance and accountability to donors, ICCO started in 2011 a process to update its procedures on procurement and internal control which will result in new procurement

Annual Report 2011

guidelines for ICCO, the Regional Offices and our partners. A training program for staff and partners will follow the adoption of these guidelines in 2012.

Others

The Turing Foundation is a committed and reliable funding partner for the Food and Nutrition Security Program and in the future maybe Basic Education program in West Africa.

11.3 Togetthere

Togetthere is the international youth program (16 – 23 years old) of ICCO and Kerk in Actie. In 2011 Togetthere started with the Changemaker program to keep the participants in its programs committed after their return, and to offer them perspectives for concrete action. Here we refer to the parts of the portfolio of Togetthere where ICCO is involved.

Volunteers

In 2011, eleven young people, between 19 and 32 years old, were sent to different partner organizations in South America (Peru, Paraguay and Bolivia), Africa (Ghana, Ethiopia), the Middle East (Israel and the Palestine Territories) and Asia (China, Bangladesh, Nepal and Indonesia). All volunteers attended a preparation training. In addition, eleven volunteers returned to The Netherlands. They followed a re-entry training to reflect on their stay abroad. The volunteers contributed to various articles in regional and local newspapers, as well as in thematic magazines and newsletters of local church communities. The volunteers also posted regularly on their blogs.

Professionals

In 2011 different young professional deployment modalities were developed and implemented. Four Communication Officers were recruited (see 11.2). Kerk in Actie funded the deployments. As part of a learning program of the ICCO Alliance five junior action research positions were deployed. The action researchers investigate whether the programmatic approach is fulfilling the assumptions. In addition, Togetthere was responsible for five other deployments. Seven Dutch young professionals ended their field work in 2011. They involved people ”at home” in their experiences. The PSO funding program for young professional deployments will cease to exist at the end of 2012. In 2011, Togetthere prepared a strategic paper on the future of opportunities for young professionals.

National Postcode Lottery In 2011 ICCO received its annual contribution of 900,000 Euros from the National Postcode Lottery. The Postcode Lottery was founded in 1989 as a way to raise funds for good causes working on a more fair and greener world. ICCO has been one of those good causes and a beneficiary of the Lottery since 2008. The concept of the Postcode Lottery has proven to be very successful in fundraising, raising more money for charity every year. In 2011, a total amount of 384 million Euros has been raised. In addition to funds the cooperation with the Postcode Lottery provides ICCO opportunities for publicity among a broad Dutch audience. In 2011, for example, one of our projects in Kyrgyzstan was the subject of a Lottery advertisement in a major Dutch newspaper, and in a TV-show a short clip about our project in Uganda was broadcasted. Also two young special ambassadors of the Postcode Lottery visited a co-creation project in Belem, Brazil.

Changemaker Netherlands Changemaker Netherlands is a collaboration between Togetthere, Edukans and World Servants. Changemaker gives young people the possibility for traineeships and the means to follow-up on their stay abroad. In September 2011 the Changemaker festival was held in Heino. Around 650 young people attended. The festival was featured on a national radio program, in a regional newspaper and on some websites. At the end of October the first round of traineeships started.

Annual Report 2011

How did ICCO react to new realities in 2011?

Photo: Armando Aquirre Arce

internal organization

The organization had to adapt itself to sudden new realities in 2011. ICCO underwent a process of renewal in all sections of the international organization. We saw the need for more intensive cooperation with Alliance partners and other stakeholders, and the need for clearer positioning of our mission and expertise. At the same time, we had to take into consideration financial setbacks.

12.1 Administration costs As stated in other chapters, the organization model was further reshaped and downsized in order to be more sustainable and affordable. We have targets to keep our overhead percentages as low as possible and below the standards of the ‘‘VFI-aanbeveling kostentoerekening beheer en administratie’’ and as stated in our own business plan. Our overhead was planned to be 10.94%, but in relation to downsizing of the organization for 2011 and 2012 an exceptional higher percentage is allowed till a maximum of 12.5%. In 2011 we concluded the year with an overhead percentage of 12.5%. See the table below and see the Financial Statements for further specifications. Table 6: Administration costs (in Euros)

Actual 2011

Budget 2011

Total Execution Costs

16,817,222

11,279,269

less: Direct Execution Costs

-3,782,677

-1,748,724

Indirect Execution costs

13,034,545

9,530,545

less: Revenues, by taxes and other income

-1,569,579

Costs internal organization (A)

11,464,966

9,530,545

Total project payments (B)

80,614,542

77,905,649

12.5 %

10.9%

Execution costs % = A / (A + B)

12.2 Employees The downsize of the organization had major consequences for programs and staff. We decided to diminish personnel mostly in the Global Office in Utrecht and to hold on as much as possible to the newly build up Regional Offices. According to Dutch law a new Social Plan MFS2 was negotiated with the labor unions. Most of the reduction of staff got implemented in April 2011 and about 25 persons were dismissed. The impact on the working atmosphere was huge. On January 1st 2011 170,85 FTEs had a position at the Global Office, but on December 31st 2011 this figure was 120,63 FTEs (Table 7). Interviews with a career coach, training and

Annual Report 2011

Table 7: Formation Global Office Staffing as of 31-12-2011

FTE

Total number of employees

120,63

100

Total number of employees

139

100

Permanent staff in number

116

Temporary staff in number

Employees in

103

Employees out

Table 8: Formation gender division Global Office Male Executive Board

Management

Middle Management

Female

total

100

Staff

126

Total

139

Table 9: Formation Regional Offices Staffing as of 31-12-2011

FTE

Total number of employees

155

95,6

Regional Managers Total

workshops were organized for the people who lost their job, to prepare them as much as possible on a future outside of ICCO. This was done by our Mobility Center. At the end of 2011 53 people left ICCO after a mobility trajectory. Of these people, 31 people found a new job, 22 people had to be dismissed according to Social Plan and four out of those had serious contacts about a new job. Also Regional Offices needed to cut down on budgets, and were also forced to diminish the amount of FTEs. In total 162 FTEs were working at Regional Offices at the end of 2011 (Table 9).

However these reductions were not enough changes to face the future. The organization needed to look for more opportunities to cut down costs and to adjust the work to the new structure and smaller formation. An external consultancy agency was asked to give more insight in all working processes to help us and work on a more â&#x20AC;&#x153;lean and meanâ&#x20AC;? organization (see chapter 12.3). It was clear from the beginning that

4,4

162

100

this could have consequences for positions again. On the timeline between 2011 and 2014 the amount of FTEs must be diminished with about 13 FTEs by redundancy and we have to find other ways to finance these positions, maybe ending temporary contracts.

Other important changes within the offices were that two Regional Managers in Mali and India left. We also had to make the decision to appoint just one Regional Manager to be responsible for two Regional Offices: Bishkek and India. Other changes were the relocations of Regional Offices, from Delhi to Kathmandu; and from Malawi to Pretoria, South Africa (2012) and the increase of country representatives. Illness in 2011 was 3,49% (Table 10). This percentage can be distorted by the employees of ICCO who were exempted from work and focusing on a new job outside of ICCO due to the reorganizations in 2011 and years before.

Table 10: Absenteeisn Global Office % as per 31-12-2011 3.49%

Short term

medium term

long term

very long term

total

22.1

22.06

46.7

9.14

100%

An introduction course was organized again in Utrecht for regional employees. Meeting colleagues from all over the world and exchanging experiences on different topics turned out to be of enormous added value. We also offered financial trainings in Regional Offices, given by staff from the Global Office. At the end of 2011 an employee survey was done in the Regional Offices on different topics. The goal was to get more insight on what staff working in the regions thought about what we are doing: what are we doing well, what do we need to change or what do we need to do more, in order to make ICCO a rewarding place to work.

12.3 Improving working processes

The organizational changes and the budget cuts in 2010 of MFS2, made it necessary to improve working processes and to prepare the organization for the period towards, and after 2015. ICCO is a broad organization, working in an alliance, with complex decision lines. This makes necessary to streamline and standardize matters. The so-called Energy@Work process started in early 2011. Clarity on essential priorities, targets, procedures and agreements was needed. The improvement program Energy@Work had three pillars: 1 Process improvements within departments as well as between departments and clients 2 The control model 3 Pro-active leadership and behavior

In the search towards a more efficient and effective organization, the Energy@Work process helped to go back to the ICCOâ&#x20AC;&#x2122;s core business and the way the primary processes are organized. Based on collected data, we produced improvement charts and constraint matrixes, we established chain improvement teams and took decisions about where to shape, where to reorganize and where to smoothen procedures. As a result, a renewed organizational chart was drafted, starting with the

departments and offices related to the primary process and supported by service departments and business units. This restructuring helps to make the organization more transparent; and improves tasks such as resource mobilization, set-up of a common and corporate agenda and a clear IT-agenda.

12.4 Quality control

In 2011, ICCO managed to secure ISO 9001:2008 certification for all our Regional Offices, less than a year after the youngest office was opened. In preparation for this all eight offices were audited internally. Our ISO audit firm, SGS, audited externally three Regional Offices as a sample. In May 2011 ICCO received the so-called multi-site certificate, which is valid for our office in Utrecht and all seven Regional Offices. In addition internal audits were implemented on the procedure to close projects, on legitimacy of project payments and on legal aspects of cooperation and board participations. The selection of an audit subject was based on a risk analysis session. ICCO also verified the effectiveness of follow-up of recommendations from previous audits. Did follow-up actions have the intended result? The conclusion was that follow-up actions tend to be effective but slow. This is understandable in a year of major reorganization, but it needs to be improved in 2012. Some ongoing activities were the monitoring of high-risk partners, renewal of our project contract conditions and activities to ensure compliance with back donor regulations. Furthermore, a legal framework was developed for our Regional Offices to ensure that they continue to comply with excising and changing local laws and regulations.

The project Dynamics in Control visualizes strengthening the controls in Dynamics, to satisfy the demands from the new decentralized organization and MFS2, as well as to improve user friendliness.

Annual Report 2011

In 2011, ICCO managed to secure ISO 9001:2008 certification for all our Regional Offices, less than a year after the youngest office was opened.

In 2011 the Dynamics in Control program focused on the Project module and CRM module. During 2012, further improvements will be realized. We expect to complete the Dynamics in Control project during the course of 2012.

In 2011, ICCO applied for the CBF seal for beneficiary obtaining moneys from a gaming license holder. This seal was provided to ICCO January 1st , 2012, External supervision is exercised by the CBF (in cooperation with ISO).

12.5 Security

ICCO takes safety and security aspects very serious. As an international operating organization we need to be prepared and well trained. Security responsibilities are being transferred to the Regional Offices. In 2011 country security plans were updated, upgraded and translated to English. The Centre for Safety and Development (CSD) provided trainings in The Netherlands for staff members working at Global Office and for staff preparing for overseas assignments of ICCO, Kerk in Actie and Terrafina Microfinance. Training was also provided by the Security Advisor in collaboration with CSD in Regional and Country Offices, both for ICCO and Kerk in Actie staff and, for staff of sister organizations. In total 272 employees attended one to five days’ trainings. One of the bigger security management trainings took place in Pakistan and Afghanistan.

Incident response

A total of 24 incidents were reported formally to the Security Desk of ICCO and Kerk in Actie, 43% less than in 2010. One reason for this decrease is that minor reports are now handled at the level of the Regional Office. The following conclusions may be drawn after analyzing the reported incidents: • 50 % of the reported incidents happened in Central & Eastern Africa • Robberies, assaults and thefts were the main type of incidents reported, followed by death threats and political unrest, such as in the Middle-East (Arab spring), Moluccas (religious tensions), Mali (Tuaregs) and other countries The most threatening and dangerous incident was an armed assault on the Juba compound of ICCO in

South Sudan that was fortunately fenced off in time by the alerted guards. Two serious traffic accidents took place, one in Mali, where one staff member and five villagers died, and two villagers were injured. The second accident happened in South Sudan, where one regional staff member had minor injuries on the face, and another international staff member got very seriously injured. Medical evacuation to Nairobi was necessary, followed by a repatriation to The Netherlands for a spine operation. Both victims have recovered well.

Networks

ICCO participates in national (DSN) and international networks (EISF). In these positions knowledge is enlarged and shared. We actively participated in the Security Working Group of the ACT Alliance. This group organized an international ACT Safety and Security Awareness week in May 2011. ICCO Global and Regional Offices participated through posters, leaflets, video and an e-learning DVD “Introduction to NGO Security”. The ACT Alliance set up a joint training for members, ACT Forums and local security focal points in “high-risk” countries.

12.6 Information and Technology

2011 was an eventful year for Information and Technology (IT) due to firm budget cuts. A number of developments have been put “on-hold” and others have been delayed, such as; • Developing the concept of an IT-design for the Regional Offices • Cleaning up the data and implementation of a new data structure • Developing an ICCO Portal Given the future developments concerning cooperation with the Services Organization of the Protestant Church, we are making preparations for the creation of a Shared Service Centre.

Improving Microsoft Dynamics AX system was a continuous process in 2011. ICCO focuses on improving quality through optimization the different modules (project, finance, authorization and CRM). These are the main components of the project “MS Dynamics in Control” which aims to achieve this optimization. This project will be completed mid-2012. In addition, a separate tool is developed for the monitoring of programs. Regarding Office Automation, the Back Office (servers, SAN, switches and cabling) is renewed and/or modified and

upgraded in accordance with current IT standards. Replacing or customizing the front-end has also started.

12.7 Works Council

At the end of 2010, the Executive Board sent the request for advice “Inrichtingsplan ICCO Global Office 2011” to the Works Council. This request contained plans for the reorganization made necessary by the reduction in government funding (MFS2). The Works Council spent the first months of 2011 discussing these plans with the Executive Board and the staff of the Global Office and an advice was given in February.

The Works Council was also present during the negotiations with the trade unions on the Social Plan MFS2. The most important result for the Works Council was that the proposed cut back in support staff, financial officers and secretaries, was postponed until the end of the year. Still, about thirty people lost their jobs in April. The Executive Board engaged an external bureau, ProExc, to analyze and improve ICCO’s internal

processes and management culture. The Works Council was also asked for advice. She spoke with staff from ProExc and was present during a number of meetings from the steering group and the project group. Yet more cut backs in staff were necessary to balance the budget. The Works Council advised the Executive Board not to proceed with the implementation of the Progress document, but this advice was largely ignored. In July, the Works Council and the Executive Board signed a Memorandum of Understanding on the International Works Council. In the spirit of ProCoDe, all ICCO employees from the Regional Offices will be included in discussions on organizational and policy issues with the Executive Board. In September, the first elections for the International Works Council were held. During the summer, the Works Council was informed for the first time about the plans for the ICCO Cooperative. In September, a staff meeting was held on the subject. The Cooperative has been on the agenda for every meeting between Works Council and Executive Board.

Annual Report 2011

Consolidated Financial Statements 2011 13.1 C onsolidated Balance Sheet as at December 31st 2011 (after appropriation of result) 31 December 2011 ASSETS

€

31 December 2010 €

€

Fixed assets Tangible fixed assets

766,623

Financial fixed assets

2,905,999

1,141,096 2,134,909 3,672,622

3,276,005

Current assets Inventories

2,717,654

1,138,294

Accounts receivable and accrued income

38,852,037

79,870,531

Securities

5,496,014

5,264,791

Cash and cash equivalents

18,430,476

TOTAL ASSETS

LIABILITIES

€

9,127,066 65,496,181

95,400,682

69,168,803

98,676,687

€

Reserves and funds Reserves

Foundation capital

Continuity Reserve

4,694,546

6,321,548

Appropriation Reserve

1,703,831

1,677,052 6,398,422

Funds

Appropriation fund projects

3,784,841

2,269,896

Appropriation fund guarantees

7,759,634

8,550,919

Appropriation fund loans and participations

2,343,679

1,593,284

Appropriation fund Voluntary Emission Reduction rights

2,954,199

1,532,126

Appropriation fund MFS interest

195,220

Appropriation fund MSD

142,670

332,630 17,180,243

14,278,855

Provisions

7,184,315

8,707,136

Long-term liabilities

3,753,959

17,243,320

Current liabilities

34,651,864

50,448,731

69,168,803

98,676,687

TOTAL LIABILITIES

7,998,645

13.2 Consolidated Statement of Income and Expenditure 2011 Actual 2011 € Income

Budget 2011 €

€

Actual 2010 €

€

Government grants

62,572,752

70,563,000

94,134,930

Income from third parties

5,954,305

5,700,000

6,757,683

Other income

1,298,962

1,615,323

1,860,505

Income from investments

270,617

489,619

Income from own fundraising activities

240,190

Total income

70,336,826

239,457 77,878,323

103,482,194

Expenses Spent on objectives

64,525,753

73,377,653

Fundraising costs

1,083,721

952,239

238,168

Management and Administration

3,426,188

3,575,758

4,433,045

Total expenses Result

€

100,379,085

69,035,662

77,905,649

105,050,298

1,301,164

-27,326

-1,568,104

€

Appropriation of net result transferred to / from: Continuity Reserve

-1,627,002

26,779

712,057

-189,960

Appropriation fund Voluntary Emission Reduction rights

1,422,073

1,532,126

Appropriation fund projects

1,514,944

1,480,488

-791,285

1,086,646

750,395

-271,683

195,220

Appropriation reserve Appropriation fund MSD

Appropriation fund guarantees Appropriation fund loans and participations Appropriation fund MFS interest Result

1,301,164

-830,000

-5,087,778 -1,568,104

Annual Report 2011

13.3 Consolidated Cash Flow Statement 2011 2011 €

2010 €

€

Cash flow from operational activities Result

1,301,164

-1,568,104

Unrealized result securities

-99,358

-358,914

Change in other provisions

-1,522,821

1,598,559

Depreciation Change of grants receivables Change of other receivables Change of project obligations Change of inventory Change of other liabilities

526,742

458,728

41,799,535

17,126,435

-781,041

-883,721

-28,293,476

-25,374,613

-1,579,360

-1,138,294

-992,752

-228,191 10,358,633

Cash flow from operational activities

-10,368,115

Investments in tangible fixed assets

-152,268

-446,328

Investments in financial fixed assets

-771,090

-269,942

Investments in securities on balance

-131,865

Cash flow from operational activities

Total

955,231 -1,055,223

238,961

9,303,410

-10,129,154

Changes in cash and cash equivalents Cash and cash equivalents at the end of the financial year

18,430,476

9,127,066

Cash and cash equivalents at the start of the financial year

9,127,066

19,256,220

Changes in cash and cash equivalents

9,303,410

-10,129,154

13.4 Explanatory Notes to the Consolidated Financial Statements 2011 General basic principles for preparation of the financial statements and principal activities The financial statements of Stichting ICCO, “Interchurch Organization for Development Co-operation”, consist of the consolidated financial statements of Stichting ICCO and its subsidiaries (“ICCO” or “the Group”) and the foundation financial statements of Stichting ICCO (“the Foundation”). Stichting ICCO has its legal statutory seat in Utrecht.

The financial statements are prepared in accordance with Guideline 650 for Fundraising Institutions in The Netherlands. The financial year coincides with the calendar year. The applied basic principles for the valuation of assets and liabilities and the result determination are based on historical costs, unless indicated otherwise. Income and expenditure are attributed to the period to which they pertain. The group is primarily involved in the reduction of poverty through development programs in the themes: Fair Economic Development, Fair Climate, Conflict Transformation & Democratization, Basic Education, Food and Nutrition Security, Basic Health and HIV, Water and ICT for Development.

Transactions in foreign currency Transactions in foreign currency are converted according to the exchange rate applying on the transaction date. Monetary assets and liabilities that are denominated in foreign currency are converted into the functional currency according to the exchange rate applying on that day. Non-monetary assets and liabilities in foreign currency that are included at their historical cost price are converted to Euros according to the exchange rate applicable on the transaction date.

Use of estimates

The drawing up of the financial statements requires the Executive Board to form opinions and make estimates and assumptions that influence the basic principles and the reported value of assets and liabilities, and of income and expenditure. The actual outcomes may differ from these estimates.

The estimates and underlying assumptions are continuously assessed. Revisions of estimates are included in the period in which the estimate is revised and in future periods for which the revision has consequences. Estimates are especially applied regarding the valuation of the portfolio of loans, participations and guarantees and regarding the provisions for reorganization.

Basic principles for consolidation

The consolidated financial statements contain the financial details of the foundation, its group companies and other legal entities over which the foundation exercises predominant control, or with whose central management the foundation has been charged. Group companies are subsidiaries in which the foundation has a controlling interest, or on the management of which it can exercise decisive influence. In determining whether decisive influence can be exercised on the management, financial instruments that involve potential voting rights and can be exercised directly are taken into account. Participating interests held in order to be disposed of will not be consolidated. Newly acquired participating interests will be included in the consolidation from the moment the decisive influence can be exercised on the management. Divested holdings are included in the consolidation until the time this influence comes to an end. In the consolidated financial statements, the mutual debts, claims and transactions have been eliminated, including the results achieved within the group. The group companies are fully consolidated, while the minority interest of third parties (if any) has been reflected separately. For an overview of the consolidated group companies, please refer to the explanatory notes to the foundation financial statements.

Financial instruments

Financial instruments include investments in shares and securities, trade and other receivables, cash items, loans and other financing commitments, and trade and other payables. Financial instruments are initially recognized at fair value. After initial recognition, financial instruments are valued as described below.

Annual Report 2011

Financial instruments that are held for trading Financial instruments (assets and liabilities) that are held for trading are valued at fair value and changes in that fair value are accounted for in the statement of income and expenditure. In the first period of recognition, attributable transaction costs are included in the statement of income and expenditure as expenditure.

Securities ICCO has a treasury policy stating the responsibilities and controls regarding management of securities and savings. The portfolio has to meet a set of sustainability criteria that measure the level of effort invested in achieving results regarding their social and environmental policies. ICCOâ&#x20AC;&#x2122;s treasury strategy is to have 25% shares (minimum of 15% and maximum of 35%) and 75% euro denominated bonds (minimum of 65% and maximum of 85%). To the extent that these are listed on a stock exchange, loans and bonds are valued at fair value. Changes in that fair value are accounted for in the statement of income and expenditure. Loans and bonds that are not listed on a stock exchange will be valued at their amortized cost price on the basis of the effective interest method, less extraordinary depreciation loss. Securities are used for the purpose of investments.

Provided loans Provided loans will be valued at their amortized cost price on the basis of the effective interest method, less impairment losses.

Tangible fixed assets

The tangible fixed assets are valued at their acquisition price less the cumulative depreciations and impairment losses. The depreciations will be calculated as a percentage of the acquisition price according to the linear method on the basis of the economic lifespan, taking into account the residual value, if any. The depreciation percentages applied are: Inventory and installations: 10% or 20% Hardware and software â&#x20AC;&#x201C; general: 33% Hardware and software â&#x20AC;&#x201C; ERP system: 20%

All tangible fixed assets are used for organizational purposes.

Financial fixed assets Subsidiaries in which significant influence can be exercised on the business and financial policy are valued according to the equity method on the basis of the net asset value. The valuation principles of the foundation will be used to determine the net asset value. Holdings with a negative net asset value will be valued at nil and ICCO will make a provision for its share in the negative equity capital of these subsidiaries in case of liabilities for debts of the subsidiary.

Subsidiaries in which no significant influence can be exercised are valued at their acquisition price or their permanently lower going-concern value. Dividends are accounted for in the period in which they are made payable. Interest income is accounted for in the period in which it is achieved, taking into account the effective interest rate of the relevant asset. Profits and losses, if any, are accounted for under financial income and expenditure. The financial fixed assets are presented net from the provisions for losses in the portfolio of loans and participations.

Loans and participations are related to the objectives and not used for organizational or investment purposes.

Inventories

Inventories consist of carbon credits held in stock at FairClimateFund B.V. Inventories are stated at the lower of cost price and net realizable value. Cost includes the purchase price and expenditure incurred in acquiring the inventories. Inventories also include prepayments made to the suppliers of carbon credits to enable them to deliver the credits in the future. All inventory is held in stock for purposes related to the objectives.

Reserves

Continuity reserve The continuity reserve has been created to safeguard the continuity in case of (temporary) highly disappointing income. The amount reserved is found to be sufficient to cover for liabilities from third parties, liabilities from personnel and other short term risks. This is in accordance to the VFI guidelines for Financial Management.

Appropriation reserve The appropriation reserve has been created with funding acquired from the Nationale Postcode Loterij. The limited deployment options of the appropriation reserve have been determined by the Executive Board and are not an obligation. The Executive Board can lift these limitations itself.

Funds

Appropriation funds Appropriation funds are those funds with a specific purpose, as indicated by third parties. It concerns the following funds: • Project appropriation fund: concerns funding received from a specific project appropriation as indicated by third parties • Guarantee appropriation fund (pertaining to ICCO’s program objectives): concerns a fund to cover the guarantee obligations which exceed the level of the guarantee provisions made • Voluntary Emission Reduction rights appropriation fund: concerns a fund to cover inventories and provided loans to partners investing in Voluntary Emission Reduction rights • Loans and participating interests appropriation fund (pertaining to ICCO’s program objectives): concerns a fund to cover provided loans and participating interests above the level of the risk provisions taken for loans and participating interests • MFS interest appropriation fund: concerns interest received on MFS funds that, pursuant to the grant scheme will be fully spent on the MFS objectives in the future • Appropriation fund MSD: In 2006, an appropriation fund was set up for the purchase and implementation of the ERP system, which was put to use in 2007. As of 1 October 2007, there will be a withdrawal for a period of 5 years.

Provisions

Provisions are measured at nominal value.

Guarantee obligations provision ICCO provides guarantees to (bank) institutions, which use this to provide loans to third parties. A provision has been recognized for the guarantees provided by ICCO, which is based on a risk assessment of country risk, project risk and global economy risk. In calculating the provision, the payment behavior of the relevant partner is also taken into account.

Reorganization provision In 2009, within the framework of the reorganization process, ProCoDe, a Redundancy Package for the employees who were redundant at the Utrecht office was agreed upon. In addition, within the framework of the reorganization process under MFS II, another Redundancy Package for the employees who were made redundant at the Utrecht office was agreed upon. The calculated provisions have been based on the number of redundant FTEs and the expected cost of termination and dismissal. Employee benefits/pensions (pledged contribution scheme) Liabilities related to contributions to pension schemes on the basis of pledged contributions are included in the statement of income and expenditure in the period in to which the contributions refer.

Income

Government grants Government grants are credited to the statement of income and expenditure of the year in which the subsidized deployment takes place.

For guarantees, loans, participating interests and inventories and loans concerning the Voluntary Emission Reduction rights, the amounts that are added to the risk provisions and the residual part of the amounts pursuant to provided principals and guarantees are accounted for as income and be appropriated to the guarantees appropriation fund, the loans and participating interests appropriation fund or the Voluntary Emission Reduction rights appropriation fund through result appropriation. Income from our own fundraising activities/Income from third-party campaigns This income is credited to the statement of income and expenditure in the year in which the income is received or pledged.

Income from investments This income is credited to the statement of income and expenditure in accordance with the abovementioned valuation principles of financial instruments. Income out of interest from cash and cash equivalents is included in the statement of income and expenditure of the year to which it pertains. Interest received on the bank account that is specifically used for income and payments related to

Annual Report 2011

the MFS program are added to the MFS appropriation fund through result appropriation.

Expenditure

In the statement of income and expenditure, the costs of ICCO’s own activities are subdivided as follows: spent on objectives, fundraising costs and management and administration costs. The allocation principles used by ICCO and the allocation methods to determine this subdivision have been detailed in the explanatory notes to the financial statements.

Spent on objectives These expenditures consist of grants to third parties, contributions and execution costs. The expenditure due to grants to third parties is charged to the statement of income and expenditure in the year in which ICCO agrees to the grants and/or makes the contribution.

In 2011 a new contract condition was added for MFS funded projects which states that after the first year only confirmed funds are considered unconditional commitments. In 2011 the MFS commitments for 2012 were confirmed, and therefore the amounts planned for 2013 and further were not included in the project commitments. This has consequences for income, expenditure, receivables and payables with MFS funds. The expenditure and income related to MFS2 grant in the financial statements therefore consist of both: • The expenditure due to grants to third parties, ICCO’s share of the grant, charged to the statement of income and expenditure in the year in which ICCO agrees to the grants and/or makes the contribution and the funds are confirmed and • the expenditure for the liability resulting from the budget allocated to the Alliance members charged to the statement of income and expenditure in the year in which ICCO receives the MFS2 budget from the Ministry of Foreign Affairs. The following applies specifically to the guarantees provided by ICCO: ICCO will designate an amount pertaining to the risk of the relevant guarantee, actually leading to expenditure as an expenditure in the year in which the guarantee is provided. In ICCO’s balance sheet, the possible liabilities that arise from the provided guarantees are reflected in

the guarantee obligations provision. The financial consequences of changes in the risks pertaining to the provided guarantees and/or the amount in guarantees provided lead to an adjustment of the provision in the year in which the change occurs. Additions to and/or deductions from the guarantee obligations provision are processed through the “Spent on objectives” item in the statement of income and expenditure. The following applies specifically to the payments made by ICCO related to loans and participating interests: ICCO will designate an amount pertaining to the risk of value depreciation of the relevant asset as expenditure in the year in which the value depreciation occurs. In ICCO’s balance sheet, the possible value depreciations are reflected in the loans and participating interests provision (this provision is balanced against the level of the loans and participating interests). The financial effect of changes in the risks and/or the amount of outstanding loans and participating interests leads to an adjustment of the provision in the year in which the change occurs. Additions to and/or deductions from the loans and participating interests provision are processed through the “Spent on objectives” item in the statement of income and expenditure. The execution costs are charged to the statement of income and expenditure in the year to which they pertain. Fundraising costs These costs are charged to the statement of income and expenditure in the year to which they pertain. Management and administration costs These costs are charged to the statement of income and expenditure in the year to which they pertain.

Cash Flow Statement

The cash flow statement was drawn up on the basis of the indirect method. Cash flows in foreign currency were converted to Euros, using the weighted average conversion rates for the relevant periods. Cash and cash equivalents consist of current accounts in The Netherlands and for the Regional Offices, saving accounts and cash held at the global or Regional Offices. The bank balance of the Investment account is classified as cash and cash equivalents.

EXplanatory notes to the items on the consolidated balance sheet

1 tangible fixed assets The movement of this item is as follows:

Book value as per 1-1-2011 Acquisitions Depreciation

hard- and software ERP system

hard- and software general

inventory and installations

company cars

Total

€

156,853

340,698

541,382

102,163

1,141,096

35,036

41,037

40,223

35,973

152,269

191,889

381,735

581,605

138,136

1,293,365

43,955

160,760

269,720

52,307

526,742

Book value as per 31-12-2011

147,934

220,975

311,885

85,829

766,623

Cumulative acquisition value

979,392

1,019,899

1,386,402

157,592

3,543,285

Cumulative depreciation and other impairment

-831,458

-798,924

-1,074,517

-71,763

-2,776,662

Book value as per 31-12-2011

147,934

220,975

311,885

85,829

766,623

2 FINANCIAL FIXED ASSETS The movement of this item, excluding the provision for loans and participating interests, is as follows: 31 december 2011

Balance as per 1 January Provided

31 december 2010

€

4,780,148

3,625,008

1,577,740

1,219,310

6,357,888

4,844,318

Repayments

-108,260

64,170

Devaluation

-1,113,912

Balance as per 31 December

5,135,716

4,780,148

The movement of provision for the financial fixed assets is as follows: 31 december 2011

Balance as per 1 January Movements in provision

Balance of loans and participations interests including provision

The devaluation in 2011 mainly relates to diluted shares of participating interests. The provision for the financial fixed assets is based on a risk assessment of country risk, project risk and global economy risk.

31 december 2010

€

2,645,239

1,760,041

-415,522

885,198

2,229,717

2,645,239

2,905,999

2,134,909

Annual Report 2011

3 inventories The return consists of the following components:

Inventories

31 december 2011

31 december 2010

€

86,145

227,092

Prepayment Inventories

2,631,509

911,202

Total

2,717,654

1,138,294

Inventories consist of Voluntary Emission Reduction rights (VER’s), owned by FairClimateFund BV. The value of stocks as per December 31st , 2011 is 86,145 Euros. An amount of 2,631,509 Euros in VER’s is paid in advance and will be delivered by the partners directly after generation in the coming eight years at agreed purchase prices. No impairment was recorded as at December 31st , 2011.

4 accounts receivable and accrued income 31 december 2011

31 december 2010

€

36,384,993

78,184,528

282,598

190,059

Receivables of employees

45,531

58,151

Other receivables, prepayments and accrued income

2,138,915

1,437,793

38,852,037

79,870,531

Donors Income from securities and interest

Total

donors This item concerns the amounts to be received from the Ministry of Foreign Affairs concerning MFS grants and other amounts to be received based on the approval given by EU, DGIS and third parties concerning special project grants. The amounts to be received from the Ministry of Foreign Affairs concerning MFS grants, concerns amounts which will be used after 2011 to finance payments resulting from project commitments, provisions and allocation of the appropriation funds guarantees, loans and participations as stated in the balance sheet at December 31st , 2011. ICCO is of the opinion that this full amount can be claimed from the Ministry. Therefore, the amount has been included as a full claim under the item “Donors”. The accounts receivable from donors are significantly lower in 2011 due to a lower MFS subsidy and also due to revised conditions related to the conditionality of commitments after 2012, as explained above.

5 securities 2011

2011

2010

€

ING stock deposit

1,101,730

20%

1,296,270

25%

ING bond deposit

4,329,465

79%

3,904,950

74%

64,819

63,571

5,496,014

100%

5,264,791

100%

Oikocredit participation Balance as per 31 December

bonds and subordinated loans

stocks

Bookvalue as per 1 January Acquisitions

Value changes of the share price as a result of valuation Bookvalue as per 31 December

total

€

1,296,270

3,904,950

63,571

5,264,791

144,563

1,500,000

1,644,563

1,248

1,440,833

5,404,950

64,819

6,910,601

Dividend payment in participating interests Sales and repayments

participation oikocredit

-235,502

-1,278,445

1,205,331

4,126,506

64,819

-1,513,946 5,396,655

-103,601

202,960

99,358

1,101,730

4,329,465

64,819

5,496,014

Shares, bonds and subordinated loans The shares, bonds and subordinated loans have been valued at the current share price at the end of the year under review. The value changes are accounted for under “Income from investments”. At the end of 2011, the nominal value of the bonds amounts to 3,950,000 Euros.

Oikocredit participating interest

The Oikocredit participating interest is included at historical costs. The return consists of the following components:

dividend and interest

unrealised profit

realised profit

total

€

ING stock deposit

28,061

-103,604

2,446

-73,098

ING bond deposit

143,791

202,960

-25,134

321,617

173,111

99,355

-22,688

249,779

Interest cash and cash equivalents

20,838

Total income from investments

270,617

Participating interest

€

1,259

€

1,259

The securities are at the disposal of the foundation. The bank balance on the Investment account is registered under Cash and Cash equivalents since 2010.

Annual Report 2011

6 cash and cash equivalents 31 december 2011 €

31 december 2010 €

Banks for the purpose of projects

€

17,733,042

Bank

€ 7,493,565

600,760

1,530,496

Investment account

65,156

77,591

Cash

31,518

25,414

ICCO balances Total

697,434

1,633,501

18,430,476

9,127,066

The balance of cash and cash equivalents 31-12-2011

Blocked amount

31-12-2010

€

5,589,334

6,271,935

The ING Bank has blocked this amount for outstanding guarantees arising from loans, participations and guarantees but also from donors such as EU.

7 reserves Continuity reserve

Balance as at 1 January

31-12-2011

31-12-2010

€

6,321,548

7,151,548

Less/plus: from appropriation of results

-1,627,002

-830,000

Balance as per 31 December

4,694,546

6,321,548

appropriation reserve

Balance as at 1 January Less/plus: from appropriation of results Balance as at 31 December

31-12-2011

31-12-2010

€

1,677,052

964,995

26,779

712,057

1,703,831

1,677,052

The appropriation of results to the Continuity reserve relate to increase in the provision for reorganization MFS2 and the negative result of the Fair & Sustainable group.

This appropriation reserve as at December 31st, 2011 includes the funds received from the Nationale Postcode Loterij, for which the Executive Board has determined a specific purpose. With the remaining balance a loan of 650,000 Euros was provided to FairClimateFund BV in 2010. The loan serves as starting capital for the trade in carbon credits and the compensation of CO2 emission. The remainder was reserved by the Executive Board to enable ICCO to financially invest in innovative entrepreneurial initiatives. With this fund, ICCO can provide necessary start-up investments which in turn will attract entrepreneurs and other investors also to participate. So far, ICCO has been working on developing the concept of co-creation and likeminded entrepreneurial initiatives, which is the reason the funds have not been spent in 2011. It is planned that in 2012 spending will be made out of these funds.

8 funds Appropriation funds concern funding received for a specific purpose as indicated by third parties. The movement of the appropriation funds is as follows: project appropriation fund

31-12-2011

31-12-2010

€

Balance as at 1 January

2,269,896

789,407

Less/plus: from appropriation of results

1,514,945

1,480,489

Balance as per 31 December

3,784,841

2,269,896

The appropriation fund projects consists of several contributions from third parties (non-governmental) which can only be used for specific purposes as specified by these parties. GUARAntee appropriation fund

31-12-2011

Balance as at 1 January Less/plus: from appropriation of results Balance as at 31 December Loans and participating interests appropriation fund

31-12-2010

€

8,550,919

7,464,273

-791,285

1,086,646

7,759,634

8,550,919

31-12-2011

Balance as at 1 January Less/plus: from appropriation of results Balance as at 31 December Appropriation fund Voluntary Emission Reduction Rights

31-12-2010

€

1,593,284

1,864,967

750,395

-271,683

2,343,679

1,593,284

31-12-2011

€

Balance as at 1 January

1,532,126

Less/plus: from appropriation of results

1,422,073

1,532,126

Balance as at 31 December

2,954,199

1,532,126

appropriation fund mfs interest

31-12-2011

31-12-2010

€

Balance as at 1 January

5,087,778

Less/plus: from appropriation of results

195,220

-5,087,778

Balance as at 31 December

195,220

appropriation fund MSD

31-12-2011

The Appropriation fund Voluntary Emission Reduction Rights has increased with the amount that was pre-paid with the Schokland fund to partners for VERs in 2011. Furthermore an amount of 298,234 Euros was charged to the fund as organizational costs of FairClimateFund BV which are related to the purpose of the Schokland fund.

31-12-2010

Balance as at 1 January

332,630

522,590

Less/plus: from appropriation of results

-189,960

Balance as at 31 December

142,670

332,630

Annual Report 2011

9 provisions provisions

Reorganization provision ProCoDe Social Plan MFS2 provision Guarantee obligations

31-12-2011

€

2,929,775

5,234,255

890,442

1,400,000

3,364,098

2,017,881

Other total

31-12-2010

55,000

7,184,315

8,707,136

An amount of approximately 2,768,000 Euros is due after one year.

Reorganization provision ProCoDe

In 2009, a provision was made for the costs of the Redundancy Package agreed upon for the ICCO employees who were redundant at the Utrecht office. 2.3 million Euros is spent in 2011. Based on recalculation of the expected expenditure it was not necessary to make any additional provisions.

Social Plan MFS2 provision

In 2010, a provision is made for the reorganization which resulted from the severe cut of government grant. Based on the Redundancy Package agreed upon for the ICCO employees, an amount of 659,558 Euros was spent in 2011. The provision was recalculated and an amount of 150,000 Euros was added to the provision.

Guarantee obligations provision

This provision is determined on the basis of an assessment of the risk of a guarantee being called in, on the basis of earlier experience figures. In these figures, the risk per country is taken into account, where necessary increased with the risk per partner, based on the partner’s payment behavior. On December 31st 2011, ICCO guarantees payment of an amount of 11,013,937 Euros (2010: 10,568,800 Euros). The risk assessment consists of country risk, project risk and global economy risk. The total risk of the portfolio amounts to 30% (2010: 19.1%). Changes in the provision go through the statement of income and expenditure.

10 long-term liabilities long-term liabilities

31-12-2011

31-12-2010

€

2012

13,067,658

2013

2,502,768

4,175,662

2014 and further

1,251,191

total

3,753,959

17,243,320

The long-term liabilities are significantly lower than in 2010 due to the lower MFS subsidy and the correction related to the conditionality of MFS commitments after 2012, as explained in the explanatory notes to the consolidated financial statements..

11 current liabilities current liabilities

Project commitments

31-12-2011

31-12-2010

€

31,500,460

46,085,603

Project related commitments

685,671

904,643

Accounts payable

942,165

330,425

Security contributions

406,833

889,076

Reservation for holiday allowance

243,730

355,113

Provision for holidays

280,538

336,068

Amounts owed to staff

71,783

104,842

Other liabilities

575,222

881,972

Accruals and deferred income

-54,538

560,989

34,651,864

50,448,731

total

Related Parties Besides her Participating interests in group companies, ICCO has not identified other related parties.

In a limited number of cases ICCO has a seat in the board of organizations in which ICCO has a participation, ICCO has no significant influence to these parties. The participations held by ICCO are related to the objectives.

Liabilities not included in the balance sheet

Multiannual financial liabilities Rental agreement Protestant Church in The Netherlands On June 9th, 2011, a new rental agreement was entered into with the Protestant Church (PKN), for a period of five years. ICCO and Kerk in Actie jointly rent 1,858 m2. As of 2012 the annual rent amounts to 904,748 Euros. There is annual indexation of the rent. It has been stipulated in the agreement that the parties will make a new agreement in 2012 on a gradual decrease of the number of square meters to be rented. Purchase commitments Voluntary Emission Reductions rights As per balance date, FairClimateFund BV has commitments from purchase contracts for Voluntary Emission Reductions rights. FairClimateFund BV has entered into three longterm purchase agreements to obtain carbon credits

for a total purchase price of 9.9 million Euros. The carbon credits delivered and prepayments are recorded as inventory. As at December 31st, 2011 the total remaining commitments under the purchase agreements amounts 7,372,529 Euros if the contractual conditions are met by the suppliers of the carbon credits. For one of the agreements the purchase price is in Indian Rupees, as a result FairClimateFund BV is exposed to currency risk for an amount of Indian Rupees 107 million (1.6 million Euros).

The long-term purchase commitments can become a potential financial risk in case of unfavorable price changes or slow demand for VER’s in the coming years. Depending on the contract form, these risks might generate losses and negative cash flows on the contracts.

Loan and Guarantee ING In 2011 a loan facility was signed between FairClimateFund BV and the ING Bank, for a total amount of 4,300,000 Euros with a 50% guarantee from ICCO. Some of the conditions to make the loan facility effective were not yet met in 2011 and therefore the loan is expected to become effective in 2012. When the loan becomes effective ICCO will include the loan and the guarantee in its financial statements. The loan facility is provided to make (advance) payments for the purchase of carbon credits from emission reduction projects approved by the ING Bank and for general corporate purposes of FairClimateFund BV.

Annual Report 2011

comply with the conditions for the MFS2 grant ICCO can be hold responsible for repayment of the grant. At present there is no reason to believe that this will be the case.

Liabilities to subsidize liabilities of third parties Issued bank guarantees As at December 31st 2011, ICCO has issued bank guarantees for an amount of 5,589,334 Euros. An amount of 2,950,460 Euros of this pertains to guarantees contained in the amount of provided guarantees of 11,013,937 Euros as included in explanation number 9 to these financial statements. The remaining 2,638,874 Euros concerns the value of bank guarantees for liabilities that were not included in the balance sheet.

Conditional project commitments As mentioned before, a new contract condition was added to the MFS funded project contracts through which all commitments after the first calendar year were made conditional to confirmation of ICCO. In 2011 the MFS commitments for 2012 were confirmed but commitments for 2013 and further are conditional and therefore not included in the financial statements of 2011. The commitments as per December 31st , 2011 are:

Liability for ICCO Alliance partners ICCO is the lead organization for the ICCO Alliance, and therefore responsible and liable for the whole alliance. If one of the alliance partners will not Conditional project commitments

2013

ICCO Alliance WASH Alliance Connect4Change Alliance total

Assets not included in the balance sheet VAT ICCO is in the middle of a procedure for a VAT tax refund for the years 2006-2011. It is unclear whether this procedure actually leads to a tax refund. More clarity from the tax authorities is expected in the second quarter of 2012.

Counter-guarantees For some of the guarantees provided by ICCO a (partial) counter-guarantee is given by a third party. These are not included in the financial statements, however in the event of a claim of the guarantee ICCO can call the counter-guarantee from this third party. The amount of counter-guarantees is 666,667 Euros.

2014 and further

total

€

11,150,038

8,012,164

19,162,202

25,000

63,712

88,712

824,502

480,000

1,304,502

11,999,540

8,555,876

20,555,416

explanatory notes to the items on the consolidated statement of income and expenditure

12 income ACTUAL 2011 €

ACTUAL 2010 €

€

subsidies of governments BUZA MFS - ICCO Alliance

51,448,370

86,033,305

- Connect for Change Alliance

2,355,474

- WASH Alliance

1,619,402

DGIS - special projects

2,659,338

2,176,110

814,126

624,463

58,896,710

88,833,878

3,676,042

5,301,052

PSO Total Dutch government EU subsidies

Income from third party campaigns

62,572,752

94,134,930

5,954,305

6,757,683

Other income/ interest MFS Interest cash and cash equivalents MFS

195,220

192,007

Income L&G&P

216,018

620,056

Other income

887,724

1,048,442 1,298,962

1,860,505

Investments income Result investments Interest cash and cash equivalents

Income from own fundraising activities Total income

249,779

497,115

20,838

-7,496 270,617

489,619

240,190

239,457

70,336,826

103,482,194

Annual Report 2011

General The recognized income includes any organizational costs.

Government grants

The income from grants is composed by income from the Dutch governmentâ&#x20AC;&#x2122;s co-financing program (MFS2), income from PSO, DGIS and the EU.

Within the MFS2 program ICCO participates in three Alliances: the ICCO Alliance (as lead agent), the WASH Alliance and the Connect4Change Alliance. In 2011, an amount of 69,307,052 Euros was pledged for the ICCO Alliance. This represents a decrease in grant of 52%. To enable the ICCO Alliance to adapt to this significant decrease a frontloading of 9 million Euros was received in 2011 which will be deducted from the pledge for the years 2012-2015. An amount of 51,448,370 Euros was recognized as income for ICCO as a result of new project commitments and organizational costs. As of 2011 the MFS funds transferred to our ICCO Alliance partners are recognized as income (and expenditure). In 2011 this represents an addition of income of 13,511,280 Euros.

For the WASH and Connect4Change Alliances ICCO recognized respectively 1,619,402 Euros and 2,355,474 Euros as income. An amount of 3,676,042 Euros was recognized as income from the European Union as a result of new project commitments approved by the EU.

Income from our own fundraising activities This amount includes the estates received for the benefit of ICCO, as well as other fundraising income, such as donations, legacies and contributions. In 2011, there were no fundraising activities in the private sector for ICCO funds alone.

Income from third party campaigns

Income from third party campaigns includes funds received from Stop Aids Now!, Nationale Postcode Loterij, Rabobank Foundation, Albert Heijn Foundation and others. The amounts pledged by Stop Aids Now! and Nationale Postcode Loterij in 2011 are respectively 794,842 Euros and 900,000 Euros.

13 expenditure main themes

ACTUAl 2011 €

ACTUAl 2010 €

€

Fair Economic Development Program Costs

19,244,306

25,839,831

Execution costs

4,438,071

4,504,737 23,682,377

30,344,568

Fair Climate Program Costs

1,215,701

1,225,024

Execution costs

1,750,042

222,239 2,965,742

1,447,263

Conflict Transformation & Democratization Program Costs

9,723,632

18,375,600

Execution costs

2,825,935

3,406,317 12,549,567

21,781,917

Basic Education Program Costs

928,268

2,077,799

Execution costs

348,613

435,680 1,276,880

2,513,479

Food and Nutrition Security Program Costs

1,502,181

8,988,067

Execution costs

696,942

1,742,619 2,199,123

10,730,687

Basic Health & HIV/Aids Program Costs

-75,254

7,703,371

Execution costs

188,278

1,667,921 113,024

9,371,292

Water Program Costs

1,233,303

1,381,324

Execution costs

323,905

314,938 1,557,208

1,696,262

1,320,352

ICT for Economic Development Program Costs

1,067,800

Execution costs

252,552

table continues on page 94

Annual Report 2011

main themes

ACTUAl 2011 €

ACTUAl 2010 €

€

Planning, Monitoring and Evaluation Program Costs

2,118,183

Execution costs

580,230 2,698,413

Other (not main themes as per business plan 2011-2015) Program Costs

1,749,040

17,382,018

Execution costs

902,746

5,111,599 2,651,786

22,493,617

Alliance Partners Program Costs

13,511,280

Execution costs 13,511,280 Program Costs

52,218,440

82,973,034

Execution costs

12,307,313

17,406,051

Total spent on the objectives

64,525,753

100,379,085

Payments in the financial year

80,614,542

107,993,033

Changes in the project commitments to partners, reorganization provision, guarantee provision, loans provision and participating interests and execution costs

-16,088,789

-7,613,948

Total

64,525,753

100,379,085

The “Other” item relates to expenditure incurred in 2011 that could not be linked to an objective according to the classification method of the 2011-2015 business plan. The expenditure under “Other” in 2010 is high due to a change in objectives in the new business plan as compared to the business plan 2007-2010. Programs such as Capacity Building, Modernization and Lobby which were funded with MFS1 until 2010 are no longer part of the business plan 2011-2015 with MFS2 funds.

Expenditure on Rapid Response and Rehabilitation The expenditure on Rapid Response and Rehabilitation projects is not presented as a separate theme but is spread over the themes they relate to. The total expenditure that can be classified as Rapid Response and Rehabilitation 4,524,147 Euros. Expenditure Utilization Rate

actual 2011

budget 2011

€

aactual 2010

€

Total spent on objectives

64,525,753

73,377,653

100,379,085

Total expenses

69,035,662

77,905,649

105,050,298

Expenditure utilization rate

93%

94%

96%

Income Utilization Rate

actual 2011

budget 2011

€

aactual 2010

€

Total spent on objectives

64,525,753

73,377,653

100,379,085

Total income

70,336,826

77,878,323

103,482,194

Income utilization rate

92%

94%

97%

The expenditure utilization rate was determined by dividing the total amount spent on the objectives by the total expenditure.

he income utilization rate was determined by T dividing the total amount spent on the objectives by the total income. In both rates the costs for provisions on loans, participations and guarantees are included in the total amount spent on the objectives. Any repayments are included in the provision.

14 fundraising The costs for fundraising include costs made to obtain subsidies and income from third party campaigns. No costs were made for fundraising among private persons.

Annual Report 2011

Explanation of the expenditure allocation / list c (all amounts * € 1.000) The division of expenditure between Management & Administration (M&A), costs for fundraising and the themes is based on the FTEs and the grant amounts spent on each theme. A separate analysis was made per cost centre of the applicable percentages that can be allocated to each theme, M&A and fundraising. The allocation method used for division of expenditure among the themes, M&A and fundraising is in accordance with the VFI guidelines. The M&A costs as a percentage of total expenditure is 5% (2010: 4.7%). objectives

health hiv / aids

education

Climate

fed

food

€

928

-75

9,724

1,216

19,244

1,502

x € 1.000

Expenditure objectives

CT&D

Publicity and Communication

121

Personnel costs

245

153

1,921

1,100

2,661

514

Direct costs

-5

215

503

Housing costs

-3

171

343

Office- and general costs

359

407

698

Depreciations and interest

112

349

188

2,826

1,750

4,438

697

1,277

113

12,550

2,966

23,682

2,199

Execution Costs Total expenses

objectives

Ict

water

Publicity and Communication

alliance partners

pme

total objectives

€

1,068

1,233

1,749

2,118

13,511

52,218

x € 1.000

Expenditure objectives

other

297

Personnel costs

146

198

773

410

8,122

Direct costs

977

Housing costs

722

Office- and general costs

1,781

Depreciations and interest

Execution Costs Total expenses

409

253

324

903

580

12,307

1,320

1,557

2,652

2,698

13,511

64,526

Fundraising Costs third party cAMPaigns x € 1.000

Expenditure objectives Publicity and Communication Personnel costs Direct costs Housing costs Office- and general costs Depreciations and interest

C1 C2 C3 C4 C5 C6

m&a

total 2011

budget 2011

total 2010

subsidies

€

52,218

64,777

82,973

133

144

331

905

772

638

231

521

2,456

11,331

8,752

16,732

-7

980

1,015

1,723

161

883

866

1,305

383

2,191

1,332

1,221

102

527

391

459

Execution Costs

391

693

3,426

16,817

13,128

22,077

Total expenses

391

693

3,426

69,036

77,906

105,050

c1 Publicity and Communication Costs actual 2011

€

budget 2011

€

Communication costs

890,162

768,810

Documentation costs

14,988

2,780

Total

actual 2010

€

624,043 13,812

905,150

771,590

637,855

c2 personnel costs actual 2011

€ Salaries

budget 2011

€

actual 2010

€

11,157,947

8,635,966

12,268,467

Holiday allowance and year-end bonus

1,413,917

974,632

1,595,569

Social security charges

1,403,475

997,055

1,730,735

Pension contributions

1,138,223

754,738

1,271,335

Staff costs

15,113,563

11,362,391

16,866,106

Hiring of staff

703,732

12,849

1,080,511

Compensations according with employment conditions

215,038

235,790

394,107

Recruitment and selection

110,293

41,610

37,130

Education and training

265,001

240,401

281,305

Other direct staff costs

265,119

Direct staff costs

190,891 1,559,183

€

230,191 721,541

2,023,244

Outplacement and addition to reorganization provision Occupational health and safety service, prevention and safety Other indirect staff costs Indirect staff costs

706,143

24,000

2,322,266

26,388

26,755

47,914

109,966

261,455

261,158

842,497

312,210

2,631,338

Total staff costs

17,515,243

12,396,142

21,520,688

Less: settlement with projects and partners

-2,043,051

-3,299,060

-2,911,921

Less: withdrawal provision reorganization

-2,964,038

-1,395,745

Less: charged on to third parties

-1,177,207

-344,699

-481,111

11,330,947

8,752,383

16,731,911

TOTAL

Annual Report 2011

personnel costs At the end of 2011, 283 FTE were employed at ICCO of which 121 in the Global Office in Utrecht, 145 (2010: 167) at the Regional Offices and 17 at Fair & Sustainable group. In 2011, the average total staffing amounted to 308 FTE. In 2011, the average cost per FTE for salaries, social charges and pensions was 44,218 Euros (in 2010: 40,080 Euros).

Hiring personnel Replacement in the event of illness is considerably lower than budgeted for, as a large proportion of the absence has been solved within the departments themselves. However the costs for hiring temporary workers (not related to sickness) is significantly higher than budgeted. The difference is related to the charges of personnel of PKN to ICCO which were budgeted otherwise and hired assistance for the reorganization. The latter were charged to the provision for reorganization but the full amount is presented here.

Compensations related to employment conditions This item contains compensation paid to employees as laid down in the employment conditions. This includes: commuting allowance, anniversary bonuses, relocation allowances, childcare, the company savings scheme and the fixed expense allowance. Outplacement Costs of outplacement are presented in this table but are charged to the provision as stated in the line “withdrawal provision reorganization”.

Settlements with projects, partners and third parties This item includes the costs transferred to the PKN, NPM, MicroNed, Terrafina Microfinance, IDH and others. The personnel expenses are accounted for in the respective budget line and subsequently transferred.

c3 Direct costs

actual 2011

budget 2011

€ Travel- and accomodation expenses

€

actual 2010

€

1,210,009

796,865

1,451,897

External advisors

318,715

101,263

585,890

Other direct costs

146,339

186,582

Passed on to projects and partners TOTAL

€

412,658

1,675,062

1,084,710

-694,567

-70,000

2,450,445 -727,605

980,495

1,014,710

1,722,840

actual 2011

budget 2011

actual 2010

€

882,874

866,096

1,304,637

Costs passed on to projects and partners. These costs refer to settlements of direct costs with partners such as NPM, Microned, UCP and PKN.

c4 housing costs

TOTAL

The housing expenses pertain to the rented office spaces for the Global Office, those of the Regional Offices worldwide and of Fair & Sustainable Holding BV. Part of the costs is transferred to subtenants

c5 Office and general costs actual 2011

budget 2011

€

actual 2010

€

Office costs

660,300

468,659

739,464

Costs of computerization

381,154

454,120

439,112

Accountants and consultancy costs

285,861

217,159

357,498

Legal and organizational advice

917,653

138,889

165,365

Supervisory Board and Regional Councils

68,847

16,871

Partnerships

80,298

6,965

60,128

Other indirect costs

148,652

46,564

Passed on to projects and partners TOTAL

€

40,672

2,542,765

1,332,356

-351,750

1,819,110 -597,818

2,191,015

1,332,356

1,221,292

office and general costs Office costs This item accounts for the costs of general printed matter, telephone, postal charges and other costs charged by the PKN Services Organization.

Legal and organizational advice In 2011 ICCO hired a consultancy firm named ProExc to reassess the internal procedures and possibilities for efficiency improvement. This was necessary due to a considerably lower subsidy and there was the need to cut costs in a responsible way. This lead to an increase of

the costs for external advisors compared to the budget of 577,150 Euros. Costs for advice are also higher than in 2010 because of additional legal advice necessary for the reorganization and organizational advice for the Fair & Sustainable group. Costs passed on to projects and partners These costs refer to office and general costs passed on to Alliance partners (121,050 Euros) and costs charged to other partners such as PKN, Microned, NPM and United Civilian for Peace (UCP).

c6 Depreciation tangible fixed assets actual 2011

€ Inventory and installations

budget 2011

€

actual 2010

€

43,955

11,584

45,315

Hardware and software - general

160,760

122,321

137,571

Hardware and software - ERP system

269,720

227,167

260,419

52,307

29,984

Company cars TOTAL

526,742

€

15,423 391,056

458,728

Annual Report 2011

Foundation’s Financial Statements 2011 14.1 Foundation’s Balance Sheet as at December 31st 2011 (after appropriation of result) 31 December 2011 ASSETS

€

31 December 2010 €

€

Fixed assets Tangible fixed assets Financial fixed assets

754,493 1

1,125,096

5,211,841

3,464,274 5,966,334

4,589,370

Current assets Accounts receivable and accrued income Securities Cash and cash equivalents

39,836,075

79,862,781

5,496,014

5,264,791

17,408,465

8,841,306

TOTAL ASSETS

LIABILITIES

€

62,740,554

93,968,878

68,706,888

98,558,248

€

Reserves Foundation capital

Continuity Reserve

4,694,546

6,321,548

Appropriation Reserve

1,703,831

1,677,052 6,398,422

7,998,645

Funds Appropriation fund projects

3,784,841

2,269,897

Appropriation fund guarantees

7,759,634

8,550,919

Appropriation fund loans and participations

2,282,521

1,532,126

Appropriation fund Voluntary Emission Reduction rights

3,015,357

1,593,284

Appropriation fund MFS interest

195,220

Appropriation fund MSD

142,670

332,630 17,180,243

Provisions

14,278,856

7,556,219

8,994,720

3,131,496

17,243,320

Current liabilities

34,440,508

50,042,707

TOTAL LIABILITIES

68,706,888

98,558,248

Long-term liabilities

100

14.2 Foundation’s Statement of Income and Expenditure 2011 actual 2011

€

budget 2011

€

actual 2010

€

Income Government grants

62,572,752

70,563,000

94,134,930

5,954,305

5,700,000

5,945,058

Other income

950,711

1,750,553

Income from investments

270,617

497,114

Income from own fundraising activities

240,190

239,457

Income from third parties

Total income

69,988,575

76,263,000

102,567,112

Expenses Spent on objectives

64,410,995

72,063,533

Fundraising costs

1,083,721

952,239

238,168

Management and Administration

3,115,692

3,247,228

3,604,163

Total expenses Results of subsidiaries Result

€

100,300,104

68,610,408

76,263,000

104,142,435

1,378,167

-1,575,323

-77,003

-27,326

7,219

1,301,164

-27,326

-1,568,104

€

Appropriation of net result Transferred to / from: Continuity Reserve

-1,627,002

26,779

712,057

-189,960

Appropriation fund Voluntary Emission Reduction rights

1,422,073

1,532,126

Appropriation fund projects

1,514,944

1,480,488

-791,285

1,086,646

Appropriation fund loans and participations

750,395

-271,683

Appropriation fund MFS interest

195,220

-5,087,778

1,301,164

-1,568,104

Appropriation reserve Appropriation fund MSD

Appropriation fund guarantees

Result

-830,000

101

Annual Report 2011

14.3 Explanatory notes to the foundation’s Financial Statements 2011 General For the applied principles for the valuation of assets and liabilities and the determination of the result, we refer to the explanatory notes accompanying the consolidated financial statements.

1 FINANCIAL FIXED ASSETS 2011

2010

€

Intercompany loans

3,226,481

1,819,365

Loans and non-consolidated participating interests

1,985,360

1,644,909

TOTAL

5,211,841

3,464,274

Participating interests in group companies

Participating interests in group companies The item “Participating interests in group companies” consists of the following interests: Name Interest Fair & Sustainable Holding BV, having its registered office in Utrecht - 100%. Fair & Sustainable Advisory Services BV, having its registered office in Utrecht - 100%. Fair Climate Fund BV, having its registered office in Utrecht - 100%. Fair & Sustainable Participating Interests BV, having its registered office in Utrecht -100%. Fair & Sustainable Ethiopia Ltd, having its registered office in Addis Ababa - 100%. Fair & Sustainable Brasil Ltd, having its registered office in São Paulo - 100%.

2 provisions

31-12-2011

Reorganization provision ProCoDe Social Plan MFS2 provision Guarantee obligations Provision on practicipating interests Other TOTAL

102

The aim of the Fair & Sustainable group is to empower vulnerable people in poor areas, through trade in carbon credits and participations in producer organizations. F&S Advisory Services provides consultancy and advice services to NGOs and companies. The F&S group has one Director under supervision of ICCO as sole shareholder.

In 2011, the Fair & Sustainable group achieved a negative result of 77,003 Euros. This result has been included in the participating interest provision. As at December 31st ,2011, the foundation has an intercompany receivable amount of 1,176,339 Euros. The intercompany position concerns subordinated loans provided to the Fair & Sustainable group in 2011.

31-12-2010

€

2,929,775

5,234,255

890,442

1,400,000

3,364,098

2,017,881

371,904

287,584

55,000

7,556,219

8,994,720

he provision on participating interests T consists of the negative equity capital of the Fair & Sustainable group including the results of 2011, registered according to the equity method.

REMUNERATION EXECUTIVE BOARD AND SUPERVISORY BOARD In 2011, the organization was managed by an Executive Board consisting of two directors, a chairman and a member. The Supervisory Board considers the employment conditions of the Name position

Executive Board to be in accordance with the ICCO policy on remuneration of the Executive Board. Furthermore the remuneration meets the requirements of the Ministry of Foreign affairs for assignment of MFS2 grants.

Marinus verweij chairman

Wim hart Member

employment conditions

Nature Number of hours Part-time percentage Period

Define

100

1/1-31/12

remuneration

Gross wages

126,975

108,736

Social charges

7,492

5,794

Taxable reimbursements

5,345

5,803

18,445

10,561

Other compensations

Benefits regarding termination of contract

total remuneration 2011

158,257

130,894

total remuneration 2010

25,737

100,000

Pension charges (employer part)

The remunerations of the chairman of the Supervisory Board and the chairman of the audit committee amount to 3,000 Euros, and that of the other members of the Supervisory Board 1,500 Euros.

As per December 31st , 2011 there are no loans, advances or guarantees provided to the members of the Executive and Supervisory Boards. Utrecht, 23 April 2012 Executive Board: M. Verweij, Chairman W.D. Hart Supervisory Board: D. Terpstra, Chairman R. Veenstra H. van Boggelen G. Mohebbi G. van Dijk B. Meyer

103

Annual Report 2011

other information

15.1 Independent auditor’s report on financial statements To: the Supervisory Board and the Executive Board of Stichting Interkerkelijke Organisatie voor Ontwikkelingssamenwerking, ICCO in Utrecht.

Report on the financial statements

We have audited the accompanying financial statements 2011 of Stichting Interkerkelijke Organisatie voor Ontwikkelingssamenwerking, ICCO, Utrecht, as set out on pages 76 until 103, which comprise the consolidated and foundation’s balance sheet as at 31 December 2011, the consolidated and foundation’s statement of income and expenditure for the year then ended and the notes comprising a summary of the accounting policies and other explanatory information.

The Executive Board’s responsibility The Executive Board is responsible for the preparation and fair presentation of the financial statements and for the preparation of the Report of the Executive Board, both in accordance with the Fundraising Institutions Accounting Guideline (RJ650) of the Dutch Accounting Standards Board. Furthermore, the Executive Board is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch Law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Executive Board, as well as evaluating the overall presentation of the financial statements.

104

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements give a true and fair view of the financial position of Stichting Interkerkelijke Organisatie voor Ontwikkelingssamenwerking, ICCO as at 31 December 2011 and of its result for the year then ended in accordance with the Fundraising Institutions Accounting Guideline (RJ650) of the Dutch Accounting Standards Board.

Report on Report of the Executive Board

We have no deficiencies to report as a result of our examination whether the Report of the Executive Board, to the extent we can assess, has been prepared in accordance with the Fundraising Institutions Accounting Guideline (RJ650) of the Dutch Accounting Standards Board. Further, we report that the Report of the Executive Board, to the extent we can assess, is consistent with the financial statements. The Hague, 23 April 2012

KPMG ACCOUNTANTS N.V. J.A.A.M. Vermeeren RA

15.2 appropriation of net result 2011 appropriation of net result. tRansferred to/from: â&#x201A;Ź Continuity Reserve Appropriation reserve Appropriation fund MSD

-1,627,002 26,779 -189,960

Appropriation fund Voluntary Emission Reduction rights

1,422,073

Appropriation fund projects

1,514,944

Appropriation guarantees Appropriation loans and participations Appropriation fund MFS interest Result

-791,285 750,395 195,220 1,301,164

This proposal has been included in the financial statements.

105

Annual Report 2011

15.3 C omposition of the Executive Board and the Supervisory Board Task of the Executive Board - To govern the stichting ICCO under supervision of the Supervisory Board. - To serve the interest of ICCO in relationship to the societal function of the foundation, and to develop policies whereby the interests of all stakeholders are balanced. - To be aware of the responsibility, the society position and the example of the Executive Board, and to act correspondingly, desisting from all acts that could damage ICCO’s reputation. To stimulate that the staff of ICCO behaves according to the same norm. The task division within the Executive Board Chair of the Executive Board: acts as chair, is figurehead, is responsible for all external, corporate communication and he/she is first responsible for all the acting of ICCO. Besides, the chair has his/her own portfolio as agreed between the members of the Executive Board. Member of the Executive Board: given his/her competence and mandate, has to be responsible for the complete internal management in the Global Office and the Regional Offices. In case of absence of the chair replacing the chair.

Members of the Executive Board are appointed by the Supervisory Board.

106

An audit and a remuneration commission supports the Supervisory Board. Members of the Supervisory Board are appointed by the Supervisory Board.

Composition of the Executive Board Drs. M. Verweij – Chairman (until October 30th , 2014)

Ancillary positions: Chairman of the International Christian Medical and Dental Association Trust (ICMDA) in UK Chairman of Centrum Mondiaal, a cooperative association of fifteen importers of Fair trade products in Culemborg Member of the Supervisory Board of “LuciVer”, a catholic organization for elderly care in Wijchen Chairman of the Foundation Ministerium Medici Missionare, a small fund for medical development work Board member of the Forestry Stewardship Council Netherlands in Utrecht W.D. Hart RA – Member

(until December 31st , 2014)

Ancillary positions: Member of the Board of Foundation GBYH Member of the Supervisory Board of B&C International BV Member of the Board of the Foundation Holland Moldova Member of the Advisory Board of Figlo Group B.V.

Composition of the Supervisory Board

Task of the Supervisory board

D. Terpstra – Chairman

- To supervise ex ante and ex post the governance of ICCO in three areas: 1) Aim and objective. 2) Expenses and use of resources. 3) ICCO functioning. To advice the Executive Board (solicited and unsolicited advice). - To test if the Executive Board, when developing policies, is focused on the interests of ICCO in relationship to its society function whereby the interests of all stakeholders are balanced. - To appoint, suspend and dismiss members of the Executive Board. - To be responsible for the functioning quality of the Supervisory Board.

(until July 1st, 2012)

Chairman Executive Board Hogeschool Inholland Ancillary positions: Member of the Supervisory Board of Public Broadcasting Member of the Supervisory Board of Grontmij Member of the Foundation Board of Sustainable Higher Education Member of the Supervisory Board of Unilever Member of the Supervisory Board of the Chamber of Commerce Netherlands Chairman of the Royal Dutch Skating Federation (KNSB) Member of World Connectors (www. worldconnectors.nl)

R. Veenstra Member and Chairman of the Audit Committee (until July 1st , 2012)

President and General Director of Sport Club Heerenveen Ancillary positions: Chairman of the Supervisory Board of Caparis (WSW and integration company) Chairman of the Society Department Friesland Member of the Governing Board of Stichting Behear Provinsjale and Buma Bibliotheek Member of the Advisory Board of Franklin Covey Benelux H. van Boggelen Member and chairman remuneration committee (until July 1st , 2012)

Owner of Bert van Boggelen Consultancy Ancillary positions: CSR Netherlands, quartermaster employers Platform “De Noormaalste Zaak” Member of the consultation committee of daily newspaper Trouw Dr. B. Böhler

Member (until July 27th , 2011)

Lawyer of Böhler Franken Koppe Wijngaarden, Lawyers, Amsterdam Ancillary positions: Member of the Dutch Senate for the political party Groen Links Member Advisory Board Nexus Institute Mrs. G. Mohebbi Member and Member Remuneration Committee (until July 1st, 2012)

Director Relationship ProRail Ancillary positions: Initiator of the action www.houdenvandewereld.nl Member of the Supervisory Board of Amsterdamse Steunpunt Wonen (ASW)

Prof. Dr. Ir. G. van Dijk Member and Member of the Audit Committee (until July 1st, 2012)

Professor (Cooperative) Financial services in developing countries, Nyenrode Business University Professor Social Venturing & Cooperative Entrepreneurship TIAS Nimbas, Universiteit van Tilburg Visiting professor Agribusiness Management, International Center for Advanced Mediterrenean Agronomic Studies (Chania, Greece) Ancillary positions: Chairman of the Supervisory Board of ABZ BV (Aardbeien uit Zaad) Chairman of the Supervisory Board of Van de Haar Group BV Member of the Advisory Board of BergToys BV Member of the Governing Board of Metgezel Beheer BV Member of the Governing Board of the Dutch Trade Board Chairman of the foundation Gelders Erfgoed Member of the Advisory Board of the Stichting Het Groene Woudt Member of the Advisory Board of Schuiteman Accountants Chairman of the Committee Property Society and Wealth Chairman of the Members’ Council of PGGM Member of the Board of the Veterinary Authority Member of the Advisory Board of the Foundation Energy Transition Netherlands Prof. Dr. B. Meyer Member and Member of the Remuneration Committee (until July 1st 2012)

Professor Religion Science, University Utrecht Ancillary positions: Vice-Chairman of the International African Institute (IAI), London Editor of the journal Material Religion

107

Annual Report 2011

appendix I Map of countries

GLOBAL OFFICE

CENTRAL AND SOUTH ASIAN REGION

UTRECHT

KATHMANDU, NEPAL

MIDDLE EAST REGION OFFICE: UTRECHT

CENTRAL AMERICAN & HAITI REGION MANAGUA, NICARAGUA

WEST AFRICAN REGION BAMAKO, MALI

CENTRAL AND EAST AFRICAN REGION KAMPALA, UGANDA

SOUTHEAST ASIAN REGION DENPASSAR, INDONESIA

SOUTH AMERICAN REGION LA PAZ, BOLIVIA

SOUTHERN AFRICAN REGION REGIONAL OFFICE COUNTRYOFFICE COUNTRIES

108

PRETORIA, SOUTHERN AFRICA

appendix I Map of programs COUNTRY

CT&D

FED

FNS

COUNTRY

CT&D

REGION : Central & Eastern Africa

REGION : CENTRAL AMERICA & HAITI

Burundi

El Salvador

DR Congo

Guatemala

Ethiopia

Haiti

Kenya

Honduras

Rwanda

Nicaragua

Sudan

Paraguay

Uganda

Bolivia

Angola

Brazil

Madagascar

Peru

Malawi

Suriname

South Africa

Ecuador

Tanzania Region : Western Africa Benin Burkina Faso Ghana Liberia

FED

FNS

Region : South AMerica

Region : Southern Africa

Zimbabwe

region : Central & South Asia Kyrgyzstan Tajikistan Afghanistan Bangladesh

India Nepal

Mali Senegal Cameroon

Region : Southeast Asia

Cambodia Indonesia

Region : global Palestine (+Israel) Nederland

Myanmar Papua New Guinea

Philippines Viet Nam Explanation of abbreviations in map: FC = Fair Climate CT&D = Conflict Transformation & Democratization BE = Basic Education FED = Fair and Economic Development FNS = Food and Nutrition Security BH = Basic Health & HIV/Aids

109

Annual Report 2011

appendix II Organization chart*

Supervisory Board

International Advisory Council

Works Council

Executive Board Support Office

Executive Board

Audit Unit

Regional Councils

Fair & Sustainable Holding

Icco Foundation

Regional Offices

Global Office

Central America & Haiti

Policy & Development

South America

Communiciations & Fundraising

West Africa

International Program

Southern Africa

Facts

Central & Eastern Africa

ICT

Southeast Asia & Pacific

Human Resources

South & Central Asia

* This is the internal organogram of the ICCO Foundation. ICCO is also secretary of the ICCO Alliance in which it cooperates with Edukans, Sharepeople, Kerk in Actie, Yenthe, ZZg, and Prisma

110

Fair & sustainable participations Brasil

Fair & Sustainable Participations

Fair & Sustainable Advisory Services

FairClimate Fund

Fair & Sustainable Ethiopia

appendix III Legal structure

Primary institution

Legal form

ICCO

Foundation

Explanation

Secondary institutions

F&S Holding

Limited company

ICCO full owner

F&S Advisory Services

Limited company

ICCO full owner

Fair Climate Fund

Limited company

ICCO full owner

Participations

Limited company

ICCO full owner

Ethiopia

Limited company

ICCO full owner

Brazil

Limited company

ICCO full owner

India

Trust for profit

ICCO full owner

From the 1st of Nov. Regional Offices

Status

Southeast Asia

NGO

Country offices

Status

Explanation

Under articles of Association of ICCO

Denpasar, Bali South Asia India

Collaboration agreement with FMSF until 1st of Nov.

Nepal

NGO

Central Asia

NGO

Under articles of Association of ICCO

NGO

Under articles of Association of ICCO

Kyrgyzstan West Africa Mali Central and Eastern Africa

NGO

Uganda

Southern Africa

NGO

Under articles of Association of ICCO

South Sudan

NGO

Under articles of Association of ICCO

Madagascar

NGO

Under articles of Association of ICCO

Haiti

Registration in progress

NGO

Malawi Central America

Congo

NGO

Nicaragua South America Bolivia

Limited company/NGO

Till the 1st of Sept. Limited company under the articles of Association of ICCO. After the 1 st Sept. Als NGO, ICCO owner.

111

Annual Report 2011

appendix Iv Accountability Statement CBF

This declaration elaborates principles of good governance for charitable organizations with regard to the separation of managing, executing and monitoring (as formulated in the Code Wijffels) in three parts:

1. Separation of monitoring, management and execution

In our statutes of ICCO, the following model was selected for the management of the foundation. In this model the Executive Board is responsible for the functioning of the organization (the foundation) and the realizing of the (strategic) objectives, while the Supervisory Board monitors the functioning of the Executive Board (the executed policy and the substantive and financial results). The principle of good governance from the Code Wijffels is the guiding principle.

The statutes provide for an Audit Committee to support the Supervisory Board. Furthermore, the Supervisory Board has set up a Remuneration Committee from its midst. Regulations have been established for both committees. The Audit Committee oversees the financial affairs of the Foundation in general and also assesses the functioning of the internal administrative organization control. The Remuneration Committee makes proposals to the Supervisory Board with respect to the policy for remuneration of the members of the Executive Board, as well as proposals for its application in individual cases. Regulations have been established for the Executive Board and the Supervisory Board. The Executive Board is advised by an International Advisory Board (members are appointed by the Supervisory Board) and eight Regional Councils in three continents with respect to the strategic choices of the organization and also about the preparation and evaluation of the (regional) annual plans. These Regional Councils are composed of people from the region who are independent and have expertise in one or more areas of the organization. The Executive Board consists of two directors, a chairman and a member. The Executive

112

Board oversees the Global Office (Utrecht) and the seven Regional Offices.

The Supervisory Board consists of seven people, originating from the grassroots and the network of ICCO. The composition of the Supervisory Board shall be such that there is a balance in gender, age, expertise and origin. The Supervisory Board meets at least four times per year. Statutory rules to prevent conflicts of interest apply to both the Executive Board and the Supervisory Board. Annually, the general lines of the executed policy of the Executive Board are discussed in a joint meeting with the Supervisory Board. For further information, please see our Report of the Executive Board and Report of the Supervisory Board.

2. Optimal spending of funds

ICCO is leading partner of the ICCO Alliance. In that context a strategic policy is developed for the years 2011-2015. Accordingly, annual plans are deducted from this policy that guides the various levels within the organization, in the Global Office in Utrecht and in the various Regional Offices. ICCO has several instruments to determine the effectiveness of the organization. - The Balanced Score Card This overview of the organizationâ&#x20AC;&#x2122;s performance combines financial and program-content issues. The overview is published annually and includes the following areas: 1. From a financial/operational perspective: expenses and salaries, realization scores. 2. From a customer perspective: satisfaction of customers, staff, stakeholders and the general public. 3. From an organizational perspective: management processes such as HR management, auditorâ&#x20AC;&#x2122;s report, ISO certificate etc. 4. From an innovation and improvement perspective: the progress of the ProCoDe process (Programmatic approach, Co-responsibility and Decentralization). The monitoring protocol The PMEL methodology which is applied by ICCO and its Alliance members is based on a monitoring

protocol. This document provides guidance on planning, monitoring and evaluation of the Alliance Business Plan. Goals and objectives are monitored by means of indicators at various levels and for the three intervention strategies. Each year the PMEL system delivers outcomes on which the thematic annual plans are further completed. Mid-term review of the Business Plan ICCO has commissioned a mid-term review to revise the alteration program of the Business Plan 20072010 and will have a mid-term review during this Business Plan (2011-2015). The opportunities and challenges for ICCO have become clear from the analysis. It provides insight into the realization of goals in the Business Plan. The final report indicates that ICCO has closely anticipated external developments. One of the recommendations was to pay attention to the translation of the innovation agenda in implementing programs, such as the transfer to Regional Offices, alignment of financial and administrative processes. This has been integrated into the formulation of the Multi Annual Strategic Plan which will be finalized by mid-2012.

ISO 9001:2008 certification ICCO annually organizes an internal ISO audit in which a number of operational, both financial and administrative, proceedings are investigated. The audit results in a series of recommendations regarding adjustments in work processes and/or instructions. Furthermore, the audit regularly points out the closely monitoring of procedures. Moreover, every year an external ISO audit takes place and the ISO handbook is regularly updated. ICCO has been integrally certified by ISO in 2011. ICCO has identified its financial indicators, including budget control and the financial indicators are monitored monthly. Current figures, on monthly and annual basis, are compared to budget figures. These are further analyzed and provided with recommendations. Reports are discussed in the Executive Board and the Management Team and taken into account for the strategic and annual plan, annual report and financial monthly reports. In connection with the approval of the CBF seal for beneficiary obtaining moneys from a gaming license holder on January 1st 2012, external supervision is also exercised by the CBF (in cooperation with ISO).

3. Optimal relations with stakeholders ICCO strives for optimal relations with stakeholders, focusing on disclosure and on intake and processing of requests, questions and complaints. The stakeholders of ICCO are the donors, the Alliance partners, the partner organizations, entrepreneurs and companies that cooperate with ICCO, the Ministry of Foreign Affairs and the Dutch public (taxpayer).

The stakeholders are provided with information in various ways. Public information is provided via the website www.icco.nl and www.icco-international. com (English), through sub-sites of the seven Regional Offices abroad (and their antennae), by the ICCO e-zines (Dutch and English), the annual report of ICCO and the abbreviated annual account of ICCO. The annual report is sent to the Ministry of Foreign Affairs, the European Union (English version), Alliance partners and its affiliates. The annual account is sent to the grassroots support of ICCO (e-magazine readers, entrepreneurs and other stakeholders). Additionally, donors receive (including Ministries and the EU) reports of the programs and projects to which they contribute, entrepreneurs receive reports of projects in which they participate, etc. Communication with the grassroots support runs through leaflets and social media like Twitter and Facebook. ICCO demands that information in its publications is accurate, complete, accessible and transparent. Image use is important and illustrates the information with atmosphere and color. ICCO communicates in English. General information about projects, activities and campaigns is provided in Dutch to Dutch readers. ICCO is open to ideas, comments, requests and complaints from stakeholders. These reach ICCO through various ways. Through the staff and the Executive Board, through info@icco.nl, via a response form on the website or via the Service Desk. Suggestions and requests are incorporated internally and handled by the relevant employee for that topic.

ICCO has a complaints and appeals system which is accessible via the website. The Chairman of the Executive Board decides on objections from partner organizations, the Regional Offices fulfill an important place in the handling of objections.

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appendix v List of abbreviations ACT Alliance Action by Churches Together Alliance

ADATS Agricultural Development and Training AFH

AIM

Society (India)

Ahold Foundation

Amsterdam Initiative against Malnutrition

AKVO Akvo means ‘water’ in the Esperanto language

ANDE Aspen Network of Development

IEPC

International Ecumenical Peace Convocation

Initiative Sustainable Trade

IICD International Institute for Communication and Development

IMF International Monetary Fund

INERELA International network of religious leaders living with, or personally affected by HIV

ISS Institute of Social Studies

Export Development Authority

MFI Micro Finance Institution

Aprodev Association of Protestant Development Organizations in the Europe antiretroviral

BCI Better Cotton Initiative

LEI Agronomic Institute of Wageningen University MSF1 Co-financing system of the Dutch government for the period 2007 – 2010

MFS2 Co-financing system development for the period 2011 – 2015

BiD Business in Development

NCDO Dutch expertise and advisory centre for citizenship and

CBF Central Bureau on Fundraising

NGO Non-Governmental Organization

COP

Partos Dutch platform for NGOs in Development Cooperation

BoP Inc Base of the Pyramid Innovation Center CDM

Clean Development Mechanism

CSD

Centre for Safety and Development

CSR

C4C

Conference of Parties (to the UN) Corporate Social Responsibility Connect for Change

DGIS Directorate General International DSN

EAA

Cooperation of the Ministry of Foreign Affairs Dutch Security Network

Ecumenical Advocacy Alliance

ECHO Humanitarian Aid and Civil Protection of the

EED EHAIA

EISF EU FED FIAN

Netherlands Platform for Micofinance

PEN Poverty Eradication Network (Kenya)

PKN Protestant Church in The Netherlands

PMEL Planning, Monitoring, Evaluation and Learning ProCoDe Programmatic working, Co-responsibility and Decentralization

PSO Association for Capacity Building in Developing Counties REDD Reducing Emissions from Deforestation and Forest Degradation in Developing Countries

development organizations on Education and

SCOPE SCoring of Organizational PErformance

HIV

Evangelische Entwicklungs Dienst (Germany)

SAI Social Accountability International

SHO National Dutch coalition of NGOs for joint fundraising in case of a major disaster

The Ecumenical HIV/AIDS Initiative in Africa

SME’s Small and Medium Enterprises

European Union

TAA The Amazon Alternative

European Interagency Security Forum Fair Economic Development

Food First Information and Action Network

FSC

Fellowship Stewardship Council

F&S

Fair & Sustainable Holding BV

IAC

NPM

SAN Stop Aids Now!

FLO Fair Trade Label Organization FTE

international cooperation

European Commission

Educaids Network of Protestant-Christian

Full-time Equivalents

International Advisory Committee (ICCO)

ICCO Interchurch organization for development cooperation

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International Committee of the Red Cross

IDH

Entrepreneurs

APEDA Agricultural and Processed Food Products

ARV drugs

ICRC

SRHR Sexual and reproductive Health and Rights TBBC Thailand Burma Border Consortium

TNO Netherlands Organization for Applied Scientific Research UCP United Civilians for Peace

UNPRI United Nations Principles for Responsible Investors VER Voluntary Emission Rights

VFI (Dutch) Association of Fundraising Institutions VNG Association of Dutch Municipalities

WASH Water, Sanitation and Hygiene Alliance WCC World Council of Churches

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More information: PO Box 8190 3503 RD Utrecht The Netherlands info@icco.nl www.icco-international.com www.icco.nl TWITTER @iccotweet FACEBOOK facebook.com/iccopage LINKEDIN linkedin.com/company/icco

Partner to enterprising people

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Member of the