International mechanism on loss and damage

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Date produced: 09/08/2012

What does the term ‘international mechanism’ mean in order to address loss and damage associated with the adverse impacts of climate change as referred to in various UNFCCC documents (e.g. Decision 7/CP.17, Work programme on loss and damage, FCCC/CP/2011/9/Add.2, at para.5)?

There is no general definition of the term ‘international mechanism’ in public international law and its meaning may vary significantly depending on the context in which it is used. That being said, the term can broadly be described as a system operating at the international level established between parties to a treaty to, inter alia, provide financial resources, monitor compliance, for coordination, verification, dispute settlement, enforcement or to establish complaint procedures in relation to the treaty. The actual features of the ‘international mechanism’ will depend on what parties agree. However, based on existing international and UNFCCC precedents, the use of the term may suggest the operation of a system comprising an institutional framework which can act and formulate decisions, through organs or other entities with a degree of independence from the wider convention process.


There are two aspects to the term ‘international mechanism’. Firstly, the term ‘mechanism’ and secondly the term ‘international’ which qualifies the term ‘mechanism’.

In the context of the United Nations Framework Convention on Climate Change (UNFCCC) negotiations, the concept of an ‘international mechanism to address loss and damage associated with the adverse effects of climate change’ has arisen under the work of the Subsidiary Body on Implementation (SBI) – that is, its Work Programme on Loss and Damage associated with the adverse effects of climate change. This Work Programme was established by the Cancun decision (1/CP.16), the outcome of the work of the Ad-hoc Working Group on Long-term Cooperation, and is directed at climate change impacts in developing countries vulnerable to the adverse impacts of climate change. The activities under the Work Programme have been divided into three thematic areas (as initially agreed at SBI-34, June 2011, Bonn). Thematic area 2 centres on ‘a range of approaches to address loss and damage associated with the adverse effects of climate change, including impacts related to extreme weather events and slow onset events, taking into consideration experience at all levels’.

Durban Decision 7/CP.17 further elaborated the Work Programme with the Conference of the Parties (COP) requesting the SBI, as part of the Work Programme, to make recommendations to the COP for its consideration at COP-18 (Doha, 2012). Paragraph 5 of Decision 7/CP.17 provides that the COP recognises that there is a need to explore a range of possible approaches and mechanisms to address loss and damage, including an ‘international mechanism’.

The Oxford English Dictionary defines ‘mechanism’ as a ‘system of mutually adapted parts working together’. It defines ‘international’ to mean ‘existing, occurring, or carried on between nations’. Thus, the term ‘international’ may be taken to imply that the ‘mechanism’ is ‘state agreed’, and applying between parties to the relevant treaty.

A review of over fifty multilateral environmental agreements (MEAs) concluded between 1973 and 2001 indicates that the term ‘mechanism’ is used to describe processes that operate in a number of subject areas. The term can apply at domestic, regional or international levels. Some of the MEAs use the term ‘mechanism’ to describe systems and processes which implement the objectives of the MEA at the national level. For example, the term ‘mechanism’ can be used as a very broad domestic institutional framework to reduce barriers to access justice , manage protected areas or administer programmes for the support of indigenous and tribal peoples.

However, many of the MEAs, while not using the term ‘international mechanism’, but rather ‘mechanism’, ‘financial mechanism’ or ‘institutional mechanism’, describe a system that is established at the international level, that is between – and agreed to by – state parties to the agreement, to provide financial resources for the transfer of technology and other agreement purposes.

The UNFCCC and the Kyoto Protocol use the term ‘mechanism’ in a number of instances. Both agreements envisage the creation of mechanisms: a mechanism to provide financial resources under the UNFCCC and the Kyoto Protocol’s clean development mechanism (CDM), respectively. Moreover, the UN refers to the CDM in UN documents as an ‘international mechanism’. The Kyoto Protocol, in Article 11, also recognises the need for the financial mechanism to fund activities by developing country Parties. Article 18 of the Kyoto Protocol further provides for the establishment of effective procedures and mechanisms to determine and address cases of non-compliance.

In addition to providing guidance on the operation of the financial mechanism to the Global Environment Facility (GEF), treaty parties have subsequently established three special funds: the Special Climate Change Fund and Least Developed Countries Fund, under the Convention, and the Adaptation Fund under the Kyoto Protocol. In 2001, as part of the Marrakesh Accords, the parties also created a compliance committee to facilitate, promote and enforce compliance with the commitments under the Kyoto Protocol. The committee comprises a facilitative branch to provide advice and assistance to parties, and an enforcement branch whose mandate is to determine the consequences for parties that do not meet their commitments.

The term ‘international mechanism’ or use of the term ‘mechanism’ to describe a system agreed to by treaty parties operating at the international level has been used outside the MEAs reviewed in other areas of international law. For instance, in the international human rights context, the Human Rights Committee, set up under the International Covenant on Civil and Political Rights is a body of independent experts that monitors the implementation of the ICCPR. States are obliged to submit reports to the Committee on how rights are implemented and, separately from this, the Committee also hears inter-state and individual complaints. The Committee refers to itself as an ‘international mechanism’.

In the international foreign investment context, the International Centre for Settlement of Investment Disputes and the North American Free Trade Agreement have been described as ‘international mechanisms’ of dispute settlement. In the international trade law context, the Dispute Settlement Body (DSB) established under Article 2 in Annex 2 to the 1994 Agreement Establishing the World Trade Organisation is another example of an ‘international mechanism’. It has authority to establish expert panels to consider cases, and to accept or reject the panels’ findings or the results of an appeal. It monitors the implementation of the rulings and recommendations, and has power to authorize retaliation when a country does not comply with a ruling.

Thus, depending on the context and the object and purpose of the relevant treaty, an ‘international mechanism’ may be described as a system operating at the international level established between treaty parties to inter alia provide financial resources, to monitor, for coordination, verification, compliance, dispute settlement and enforcement and to establish complaint procedures. It is an institutional system or framework agreed to by parties for the purposes of accomplishing a result determined by the provisions of the treaty. It is able to act and formulate decisions, through organs or other entities with a degree of independence from the wider convention process. The actual features of the ‘international mechanism’ will depend on what parties agree.

In relation to the SBI’s Work Programme on Loss and Damage, an ‘international mechanism’ directed at addressing loss and damage from climate change impacts is one possible approach to addressing the issue. Some examples of what this mechanism might look like, that states have suggested, include ‘a fund for compensation and rehabilitation’ . An ‘international mechanism’ in this context might, for example, address impacts associating with climate change through providing for risk management, insurance, compensation and rehabilitation facilities.