Guidance to funds serving the PA Part II

Legal assistance paper

All reasonable efforts have been made to ensure the accuracy of this information at the time the advice was produced (please refer to the date produced below). However, the materials have been prepared for informational purposes only and may have been superseded by more recent developments. They do not constitute formal legal advice or create a lawyer-client relationship. You should seek legal advice to take account of your own interests. To the extent permitted any liability is excluded. Those consulting the database may wish to contact LRI for clarifications and an updated analysis.

Date produced: 09/05/2018

Based on your advice that the CMA may give guidance to the operating entities of the financial mechanism, does the MoU between the COP and the GEF Council (decision 12/CP.2 and decision 12/CP.3) require revision/amendments/clarifications? 


In our view, amendment to the memorandum of understanding is not technically required because, pursuant to the Convention, the financial mechanism remains under overall guidance of, and is accountable to, the COP (Article 11.1 of the Convention). This fundamental position has not been changed by the advent of the Paris Agreement (nor the Kyoto Protocol). Paragraph 61 of COP decision 1/CP.21, as discussed in our note, provides that the CMA may provide guidance to the financial mechanism for transmission by the COP. However, to our eyes, this decision is clear that such guidance may not be communicated directly but instead must go through the COP, so the COP retains its ultimate authority (at least in a formal sense) in relation to the financial mechanism.

That said, decision 1/CP.21 does appear, as discussed in our note, to put the CMA in a more authoritative position in relation to the provision of guidance to the financial mechanism than in other cases under UN conventions (for example the CMP as provided for in the Kyoto Protocol). It would be possible to modify the memorandum of understanding to refer to the transmission by the COP of guidance formulated/provided by the CMA in relation to the financial mechanism’s role under the Paris Agreement. This would clarify the relationship between the various bodies. A number of minor drafting changes would likely need to be decided upon, including references to the Paris Agreement and the CMA in the recitals and operative paragraphs (in particular “Purpose of arrangements” and “Determination and communication of guidance from the COP”). The annex would also need to be considered and inclusion of specific references to the Paris Agreement and the financial mechanism’s role thereunder might be beneficial. Any amendments to the memorandum of understanding would need agreement to be reached between the COP and the GEF. If this approach is followed, then presumably similar amendments would also need to be considered for the governing instrument of the Green Climate Fund (Decision 3/CP.17) and the arrangements between the COP and the GCF (Decision 7/CP.18).