Implementing entities and Adaptation Fund

Legal assistance paper

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Date produced: 13/06/2014

1. What is the meaning of “implementing entities” in the context of the Adaptation Fund, and is it already covered off by the other interests or organisations mentioned under paragraph 3 draft decision -/CMP9 (FCCC/SBI/2013/L.6) ?

2. What would be the effect of adding “[other]” before “implementing entities”?

Advice:

1. The meaning of “implementing entities”

Implementing entities are the national, regional and multilateral institutions accredited by the Adaptation Fund Board to receive direct financial transfers from the Fund in order to carry out adaptation projects and programmes. Kyoto Protocol Parties that are eligible to apply for funding must use either a national implementing entity (NIE), a regional implementing entity (RIE) or a multilateral implementing entity (MIE) to access the Adaptation Fund. In order to become accredited, entities are required to meet the legal and fiduciary standards adopted by the Board.[1]

Implementing entities are therefore distinct from the other interests mentioned in paragraph 3 of draft decision -/CMP9 (FCCC/SBI/2013/L.6) because they have been accredited by the Adaptation Fund Board and are eligible to submit applications for funding. This means that while implementing entities can be, for example, international organisations, like the Asian Development Bank,[2] they will only be considered “implementing entities” if accredited by the Adaptation Fund Board. Unlike the other interests mentioned in paragraph 3 (Parties, observer organisations, international organizations, stakeholders, and non-governmental organisations), implementing entities are required to meet fiduciary standards relating to financial integrity and management, institutional capacity, transparency and self- investigatory powers.

For more information about the accreditation process, please see the Adaptation Fund Board website at: https://www.adaptation-fund.org/page/accreditation-process. For more information about the Operational Policies and Guidelines for access to the Adaptation Fund, please see: https://www.adaptation-fund.org/sites/default/files/OPG%20amended%20in%20November%202013.pdf

2. The  effect of adding “other”

The current wording of paragraph 3 of draft decision -/CMP9 (FCCC/SBI/2013/L.6) is as follows:

“Invites Parties and observer organizations, as well as other interested international organizations, stakeholders and non-governmental organizations involved in the activities of the Adaptation Fund and implementing entities accredited by the Adaptation Fund Board to submit to the secretariat, by 26 March 2014, their views on the review of the Adaptation Fund based on the terms of reference contained in the annex to this decision.”

It should be noted that the COP came to a decision on this text in Decision 2/CMP.9, which, at paragraph 3 provides as follows:

“Invites Parties and observer organizations, as well as other interested international organizations, stakeholders and non-governmental organizations involved in the activities of the Adaptation Fund and implementing entities accredited by the Adaptation Fund Board[,] to submit to the secretariat, by 26 March 2014, their views on the review of the Adaptation Fund based on the terms of reference contained in the annex.”[3]

The Decision text therefore supersedes the draft language. It is also noted that the deadline of 26 March 2014 has expired.

Interpretation of paragraph 3 

There may be multiple interpretations of paragraph 3. One is implied by the query itself. Two alternative interpretations are suggested here.

First interpretation – the interpretation implied by the query

The query suggests that the paragraph can be interpreted as follows:

Those interests invited to submit views to the Secretariat are:

(1)   Parties and observer organisations;

(2)   As well as

  • Interested international organisations;
  • Stakeholders and non-governmental organisations involved in the activities of the Adaptation Fund; and
  • Implementing entities accredited by the Adaptation Fund Board.

The effect of adding “other” before “implementing entities” in this latter case would be to qualify the groups of interests in a. and b.   It would mean that “interested international organisations” and “stakeholders and non-governmental organisations” would have to fall into the category of “implementing entities”. The paragraph would effectively prevent any non-accredited stakeholders from submitting their views.  This appears to run contrary to the existing wording of the paragraph which envisages a wider range of contributors. We suggest that this is not the correct interpretation of paragraph three and that two alternative interpretations are preferred. These are set out below.

Second interpretation

The paragraph could be interpreted as follows:

Those interests invited to submit views to the Secretariat are:

(1)   Parties and observer organisations; as well as

(2)   Interested international organisations, stakeholders and non-governmental organisations – but only those which are involved in the activities of the Adaptation Fund and implementing entities accredited by the Adaptation Fund Board.

This leads to two observations. Firstly, the group of interests that are invited to submit views are in fact limited to those interests involved in the AF and implementing entities. It is not correct, under this interpretation, to say that all interested stakeholders, regardless of their connection to the AF and implementing entities, are invited to submit views. However, the qualifier is a strict one, since interested organisations and stakeholders must be involved in the AF and implementing entities.   Secondly, the addition of “other” before “implementing entities” would not make sense since it would imply that the Adaptation Fund is also an implementing entity.

The limitations of this interpretation are that only a narrow set of interests are able to contribute their views (although the majority of organisations and stakeholders involved in the Adaptation Fund are also likely to be involved with an implementing entity).

Third Interpretation

A third reading of the text might be that paragraph 3 reads as follows:

Those interests invited to submit views to the Secretariat are:

(1)   Parties and observer organisations;

(2)   Interested international organisations, stakeholders and non-governmental organisations involved in the activities of the Adaptation Fund; and

(3)   Implementing entities accredited by the Adaptation Fund Board.

This is a broader interpretation than the second one, requiring that international organisations, stakeholders and NGOs must at least be involved in the activities of the AF, but need not also be involved in implementing entities. The addition of “other” before “implementing entities” would be redundant.

It would appear from the Annex to Decision 2/CMP.9 that this interpretation may have been the intended interpretation of the drafters. Part III paragraph 3(a) of the Annex (‘Sources of Information’), states as follows:

The review shall draw upon, inter alia, the following sources of information: 

(a) Submissions from Parties to the Kyoto Protocol, observer organizations, as well as other interested international organizations, stakeholders and non-governmental organizations involved in the activities of the Adaptation Fund, and implementing entities accredited by the Adaptation Fund Board on their experiences regarding the Adaptation Fund;

 The additional comma after “Adaptation Fund” leads to the above interpretation (2) of paragraph (3).

There is, however, a difficulty with this interpretation. The subset of interests in paragraph (3) (“implementing entities”) will also be captured by paragraph (2). Therefore this interpretation would seem to render paragraph (3) redundant unless there are examples of implementing entities that could not submit their views as Parties, international organisations, stakeholders or NGOs.

3. Conclusion

 The first interpretation suggested by the query is, in our view, incorrect. The second and third interpretations are better, but they each have difficulties. The third interpretation appears to match the language of the Annex to Decision 2/CMP.9, but also raises questions about whether language pertaining to “implementing entities accredited by the Adaptation Fund Board” is necessary. Finally, in the second and third interpretations, the use of “other” is superfluous and will not have the effect of limiting the interests. At best the use of “other” in the third interpretation may imply that certain implementing entities which are not Parties, international organisations, stakeholders or NGOs, are also eligible to submit their views to the Secretariat.

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[1] https://www.adaptation-fund.org/page/implementing-entities

[2] https://www.adaptation-fund.org/entity/1337-asian-development-bank-adb

[3] http://unfccc.int/resource/docs/2013/cmp9/eng/09a01.pdf