Decision B.09/03 of the Green Climate Fund Board extends the coverage of the GCF Policy on ethics and conflicts of interest for the Board beyond what is mandated in the GCF Board Rules of Procedure (in particular Rule 45) to Advisers of Board members and alternate members.
The GCF Secretariat has interpreted this Decision to imply that only advisers who are registered under that Policy and who as such have signed The Declaration of Impartiality and Confidentiality of members and alternate members of the Board of the Green Climate Fund and Advisers can accompany members/alternates into the Board room, regardless of whether the Board is in executive session or not.
Question: Is this interpretation, which appears to restrict Board meeting attendance beyond what is envisaged in Rule of Procedure 25, warranted?
Decision B.09/03 of the Green Climate Fund Board adopts the Policy on Ethics and Conflicts of Interest for the Board of the Green Climate Fund (the Policy). Under Para 5, members and alternate members of the Board, and their Advisers are required to sign the Declaration of Impartiality and Confidentiality in the format attached at Appendix 1 to the Policy. The issue raised by this question is whether the inclusion of Advisers is warranted, despite the fact that it appears to go beyond what is envisaged in the GCF Board Rules of Procedure (the Rules).
Section VIII of the Rules on Confidentiality and conflict of Interests specifically provides at para 45 ‘… that Board members, alternate members, and active observers are required to adhere to the Fund’s policies and standards on ethics and conflict of interest.’ Advisers are not mentioned. The issue is whether the inclusion of Advisers within the obligation under Para 5 of the Policy is an unwarranted extension of the requirements of para 45 of the Rules. We note that it was clearly intended that these Rules would be elaborated on: footnote 4 of Rule 45 specifically indicates that a separate Board policy on ethics and conflict of interest will be adopted by the Board.
Rule 25 of the Rules deals with attendance at Board meetings and provides that ‘In addition to Board members and alternate members, meetings of the Board, other than executive sessions, will be open to attendance by designated advisers of Board members and alternate members, Secretariat staff, representatives of the Trustee, active observers and other observers who have been accredited for participation in the meeting.’
Rule 28 covers executive sessions: In exceptional circumstances, the Board may conduct its business in closed executive session where, unless decided otherwise by the Board, only Board members and alternate members, the Executive Director, advisers, and such other persons authorized or requested by the Board to attend, may be present.
It may be useful for the purpose of the query to consider the authority under which the Decision and the Rules are developed and in particular their relationship with the Governing Instrument for the Green Climate Fund. The question arises in this context a) whether there exists a hierarchy of authority between the Rules and Board Decisions/whether the Board might be regarded as having acted ultra vires by extending the coverage of the GCF policy to advisers or b) whether the Board Decision may be read as a further elaboration of the rules on confidentiality and conflicts of interests which it was entitled to make or c) whether later Decisions may supersede the Rules to the extent that an irreconcilable conflict or discrepancy arise.
The Rules were adopted pursuant to paragraph 17 of the Governing Instrument for the Green Climate Fund, to supplement the procedural rules contained in that Instrument. The latter does not contain any detailed provisions relating to standards of conduct of the Board, but only general guidance which is set out in the Objectives and guiding principles section of the Instrument which states at para 3 that ‘The Fund will operate in a transparent and accountable manner guided by efficiency and effectiveness.’
Similarly the Policy on Ethics and Conflicts of Interest does not reference the Rules of Procedure in Section 1 concerning the Scope, Purpose and Applicability of the Policy but rather cites the overarching Governing Instrument as the mandate and basis for their elaboration. Para 2 of the Policy indicates: ‘The Policy is in furtherance of the general principle set out in the Governing Instrument for the Green Climate Fund that the Fund shall operate in a transparent and accountable manner guided by efficiency and effectiveness.’
It might be argued that, to the extent that they contradict each other, the Rules should rank in priority to the Policy as being specifically mandated by the Governing Instrument (para 17). However this does not necessarily follow, as the existence of the Rules does not preclude the further elaboration of the general principles of transparency and accountability indicated in the Governing Instrument. The Board in developing the Policy can legitimately be considered as acting in furtherance of its functions under the Governing Instrument in this respect. This is indeed envisaged by the Rules themselves in Para 45 at footnote 4 which, as previously mentioned, indicates that a separate Board policy on ethics and conflicts of interest will be adopted by the Board.
It is notable also that the Amendments section of the Rules at para 49 provides for their revision by the Board but expressly excludes amendment in this manner of any provisions that reproduce provisions from the Governing Instrument. Arguably, the Decision of the Board in adopting the Policy acts to modify earlier rules. Provided – as indicated in para 49 – that the Board Decision is reached in accordance with paras 41 – 44 (Decision-making and voting), there is no requirement that such amendments need to be formally identified as amendments for such amendment to be applicable. This suggests that the Decisions of the Board have equal status to the Rules of Procedure; both ranking equally under the Governing Instrument to which they are expressly made subordinate.
In conclusion and in answer to the questions raised at point 3 above: it appears that a hierarchy exists with the Governing Instrument taking precedence but with the Rules capable of being further elaborated and effectively amended (to the extent that they do not conform) by later Decisions of the Board. Accordingly, we are of the view that Decision B.09/03 should be regarded as a legitimate elaboration on the Rules, in particular Rule 45, and the inclusion of advisers in the GCF Policy on ethics and conflicts of interest does not constitute an unwarranted extension of the Rules.