Privileges and Immunities of the Green Climate Fund

Legal assistance paper

All reasonable efforts have been made to ensure the accuracy of this information at the time the advice was produced. However, the materials have been prepared for informational purposes only and may have been superseded by more recent developments.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. To the extent permitted any liability is excluded. Those consulting the database may wish to contact LRI for clarifications and an updated analysis.

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Date produced: 17/12/2019

  1. What are the privileges and immunities awarded to an international organisation such as the Green Climate Fund, its assets and staff? What are some of the legal consequences of these privileges and immunities?
  2. How are such privileges and immunities awarded or granted?
  3. What do the constitutional documents of the Green Climate Fund say about the behaviour of its staff and in which instances can they be subject to disciplinary action?
  4. In what ways do privileges and immunities impact the Green Climate Fund’s work?
  5. What would be the benefits of an official link with the UN?

 

Advice:

1. What are the privileges and immunities awarded to an international organisation such as the Green Climate Fund, its assets and staff? What are some of the legal consequences of these privileges and immunities?

In this context, the phrase “privileges and immunities” refers to the special legal rights that may be conferred on an international organisation to avoid being subject to certain elements of the law in the countries in which it operates. The conferral of privileges and immunities allows an international organisation to avoid the risk that legal action is taken against it, its assets or personnel, whilst undertaking official functions (subject to certain limited exceptions). Thus, privileges and immunities are meant to protect the independent functioning of an international organisation from the purview of national courts.

The importance of privileges and immunities to ensure the effective, efficient and independent operationalisation of the Green Climate Fund (“GCF”), had been recognised by the GCF in its Eighth Report to the Conference of the Parties (“COP”) to the United Nations Framework Convention on Climate Change (“UNFCCC”).[1] The legal framework governing the privileges and immunities of international organisations is substantially treaty-based.

A legally independent institution, the GCF has its own secretariat and the World Bank as its interim trustee. As an operating entity of the financial mechanism of the UNFCCC, the GCF is “accountable to and function[s] under the guidance of the COP”.[2] The GCF’s Governing Instrument (“Governing Instrument”) sets out that the GCF “will possess juridical personality and will have such legal capacity as is necessary for the exercise of its functions and the protection of its interests.”[3] Further, Article 8 sets out that the GCF, as well as its officials, will enjoy such privileges and immunities as are necessary for the independent exercise of their official functions in connection with the GCF.

A key characteristic of the treaty regime governing privileges and immunities is that it gives rise to legal obligations that directly engage core elements of the sovereign state, such as customs, fiscal and security matters. Privileges and immunities establish a formal, high-level, political relationship with host countries. These relationships serve as a powerful risk mitigation mechanism, not just for the GCF but also for members of the GCF’s board and officials. In particular, without privileges and immunities, there is an increased risk that legal action may be taken against the GCF, its board members and officials, especially in the context of projects/programmes implemented by entities who might themselves be protected by privileges and immunities.[4]

Typically, conferral of privileges and immunities prevent third parties from being able to institute claims against the GCF and/or its staff members, in the national courts of those countries that have entered into agreement conferring privileges and immunities. The effect of such an agreement is that the GCF’s board members and staff cannot personally be held liable for the effect of any decisions taken by them in the exercise of the GCF’s functions. Further, the GCF’s assets are protected from claims in national courts.

To enable the effective operation of the GCF, it is important that the GCF is not subject to the jurisdiction of all the countries where it is operating. To that end, it needs to be ensured that immunity of jurisdiction and other privileges (e.g. privilege of communication) and immunities (e.g. immunity of assets and archives), and exemptions (e.g. exemption of taxation) are extended to the GCF in the countries where it is operating. Appropriate action would also need to be taken to ensure that the board members, consultants and other persons associated with the GCF were covered by privileges and immunities.[5]

2. How are such privileges and immunities awarded or granted?

The legal frameworks awarding or granting privileges and immunities tend to vary by international organisation. Privileges and immunities are usually established by way of legal agreements between international organisations and countries. The GCF has been seeking to establish relationships, which grant the GCF such privileges and immunities through bilateral agreements with countries. The GCF has produced a template for such bilateral agreements,[6] which sets out the various rights of immunity from legal process and other privileges which the GCF, its assets and its staff (‘representatives serving on constituted bodies of the Green Climate Fund’) have. The GCF’s template is modelled on the General Convention but reflects a slightly lower standard than that which is applicable under the General Convention.

The legal frameworks for privileges and immunities for a few international organisations/ bodies are,[7] by way of example, set out below:

·       The United Nations (“UN”),[8] the specialised agencies and the International Atomic Energy Agency apply either the Convention on the Privileges and Immunities of the United Nations, 1946 (“General Convention”) or the Convention on the Privileges  and Immunities of the Specialised Agencies, 1947 (“Specialised Agencies Convention”);

·       For organisations that do no benefit from the Generation Convention or Specialised Agencies Convention regimes, such as the International Tribunal for the Law of the Sea and the World Trade Organisation, privileges and immunities tend to be included in their constituent instruments, often supplemented by multilateral agreements;

·       Organisations that do not enjoy the regime of the General Convention or the Specialised Agencies Convention and do not have privileges and immunities conferred upon them by multilateral agreements or their constituent instruments, are forced to rely solely on their headquarters agreements and host country agreements. Such organisations include the bodies established by environmental agreements, including the UNFCCC, the Global Environment Facility and the GCF.

The difficulty with the regime applicable to bodies established by environmental agreements is that privileges and immunities apply only at their headquarters (there is typically a headquarters agreement covering privileges and immunities with the host country) and in those countries that have signed agreements conferring privileges and immunities.

It should be noted, however, that the design of the General Convention functions as a practical baseline for new entities established under existing treaty regimes, such as the GCF.[9]

3. What do the constitutional documents of the Green Climate Fund say about the behaviour of its staff and in which instances can they be subject to disciplinary action?

The constitutional documents of the GCF are understood to be the following:

·       The Governing Instrument of the GCF; and

·       The Agreement between the Republic of Korea and the GCF concerning the headquarters of the GCF (“Headquarters Agreement”);

·       In addition to the constitutional documents, the GCF has also issued the GCF Handbook and the Human Resources policy statement of the GCF (“HR Statement”) which contain rules about the behaviour of GCF staff and officials.

While the Governing Instrument does not contain detailed obligations on the behaviour of its staff, it does provide for “accountability mechanisms” in article XI, and more specifically in sub-paragraphs 68 and 69. The GCF under this article is required to establish an independent integrity unit to investigate allegations of fraud and corruption, and an independent redress mechanism that will receive and handle complaints.

The Headquarters Agreement provides the GCF and its staff with certain privileges and immunities. However, article 14 requires the GCF to take the following action:

·       To waive immunity where it considers would impede justice;

·       To take every measure to ensure that the privileges, immunities and exemptions are not abused; and

·       Must enter into consultation with the Government of the Republic of Korea (“Government”) where the Government believes that an abuse of privileges or immunity has taken place.

The GCF Handbook contains the most detailed provisions on the expected behaviour of GCF employees, including in relation to ethics and corruption. The GCF Handbook also provides for disciplinary action where employees have not adhered to the behaviour-related requirements of the GCF Handbook. The HR Statement complements the GCF Handbook through the code of conduct, which contains at paragraph 4.12 a sanctions regime for employees that fail to comply with the code of conduct.

4. In what ways do privileges and immunities impact the Green Climate Fund’s work?

As set out in Annex III of the Eight Report of the GCF, the GCF considers that privileges and immunities are essential to ensure the operations of the GCF and the implementation of its projects and programmes. It is a reasonable requirement that international organisations have a degree of legal protection for their assets and personnel.

We understand that many multilateral institutions (but not all) include privileges and immunities in the treaty establishing the relevant institutions. The GCF does not have the benefit of this arrangement. Instead, the GCF relies on the privileges and immunity provisions in the Headquarters Agreement with the Republic of Korea and through its bilateral agreements with countries (we understand that, as at 31 July 2019, bilateral agreements with only 21 countries had been signed).[10] The GCF has for years been flagging the risks and challenges of operating in countries without the protection of such privileges and immunities. The Eight Report includes a comprehensive overview of such issues, which are in summary:

·       that there is an increased risk of legal action against the GCF, its board members and other officials, especially in the context of working on projects/programmes implemented by entities who are protected by privileges and immunities;

·       to protect itself against the above the GCF has focused on using legal risk mitigation through complex legal agreements, which are costly and time-consuming to negotiate. This limits the ability of the GCF to utilise effective project management approaches, and delays projects; and

·       the GCF therefore faces an inability to effectively and safely engage in in-country activities as it does not wish to risk its personnel (especially in  the context of investigations) – in addition GCF personnel often face challenges in obtaining visas for travel.

To address the above, in the Eighth Report, the GCF proposed various solutions including:

·       an institutional linkage with the UN; and/or

·       options for regional multilateral agreements on privileges and immunities; and/or

·       the establishment of a board committee to oversee and provide strategic guidance on obtaining privileges and immunities.

5. What would be the benefits of an official link with the UN?

As with the UNFCCCC secretariat, the central premise of an institutional link would be to provide an efficient arrangement for administrative support to the GCF secretariat, that would ensure proper procedure, controls and accountability. The institutional link is also meant to enable managerial autonomy, flexibility and accountability to the COP.

The GCF has previously explored the options for an institutional linkage between the UN and the GCF.[11] We understand that, at that stage, the question was whether the institutional linkage which currently exists between the UN and the UNFCCC secretariat may apply to the GCF and its officials. In an opinion issued in February 2014 by the Office of the Legal Counsel for the UN, it concluded that this was not the case.[12]

It may be noted, however, that the question whether it might be possible to approve for the GCF an institutional linkage, on similar terms and conditions, as those that are applicable to the UNFCCC secretariat (i.e. under which the General Convention would be applicable to officials of the GCF) was not explored.

In a further opinion issued in August 2014, it was clarified that owing to the difference in status between the GCF and specialised agencies of the UN, the institutional linkage between the UN and the UNFCCC could not, by analogy, be extended to the GCF. A key aspect of this opinion appears to have been that the GCF pursued a “hybrid option as the basis for the administrative framework” of the GCF (i.e. follows its own administrative rules rather than those of the UN). The opinion did not exclude the possibility per se that an institutional linkage of a different type than is applicable to the UNFCCC secretariat might be approved for the GCF. Any such decision on the institutional linkage would, however, be for the COP and the UN General Assembly to take.

In any event, the existing institutional linkage between the UN and the UNFCCC secretariat is limited in scope (i.e. it applies only to the staff of the UNFCCC secretariat). It does not extend to representatives of the State parties to the UNFCCC or any other persons associated with the UNFCCC. Thus, irrespective of approval of an institutional linkage by the COP and General Assembly, necessary steps would need to be taken to ensure that, in addition to the Secretariat’s staff, the Fund, its board members as well as consultants were able to benefit from privileges and immunities.

The GCF has previously explored the terms of institutional linkage with the UN.[13] It had identified that it would be very beneficial to GCF’s staff to be able to avail itself of the privileges and immunities of the General Convention, including the use of the United Nations laissez passer (i.e. a diplomatic travel document issued by the UN under the provisions of Article VII of the General Convention). The laissez passer could greatly facilitate travel for the GCF Secretariat’s staff, in particular, in countries in post-conflict situations.

The Secretary-General of the UN has the right to waive privileges and immunities under the General Convention – and were it to be applicable to the GCF and its staff, the Secretary General of the UN would retain this power. The GCF had expressed a preference that its Executive Director, as the head of the GCF Secretariat, should decide on the imposition of any disciplinary measures on staff of the Secretariat (rather than the UN Secretary General being in charge of the process).[14]

The other aspect previously explored in this regard was whether the GCF might be accountable to the UN and the application of the UN rules and regulations, resulting from the GCF being part of the UN system and the GCF Secretariat’s staff having the status of officials of the UN.

An institutional linkage between the UN and the GCF would, to be consistent with the launch of the GCF and its Governing Instrument, need to include a greater degree of autonomy for the GCF than is currently applicable to the UNFCCC secretariat.[15] This would include the power of the Board to appoint the Executive Director and to adopt policies, guidelines and rules and procedures for the effective functioning of the GCF.

 

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[1]    Annex III, Eighth Annual Report of the GCF, 14 June 2019, page 57.
[2]    Article 11, UNFCCC.
[3]    Article 7, Governing Instrument for the Green Climate Fund.
[4]    Eighth Annual Report of the GCF, 14 June 2019, pages 58 – 59.
[5]    Options for an Institutional Linkage between the United Nations and the Fund, 8 Oct 2014.
[6]    Template for the Bilateral Agreement on Privileges and Immunities, 18 June 2015.
[7]    For further details, see Privileges and immunities for individuals serving on bodies established by these  organisations: Review of the legal regime and practice of organizations in the United Nations system, 30 July 2007, pages 1-2 and 12-13.
[8]    Under the UN Charter (Article 105), the UN enjoys in the territory of each of its Members, such privileges and immunities as are necessary for the fulfilment of its purposes (i.e. functional necessity of privileges and immunities remains crucial).
[9]    Davinia Aziz and Alison See, Privileges and Immunities of the United Nations and Specialised Agencies in Simon Chesterman, et. al. (Eds.) The Oxford Handbook of United Nations, Mar 2019, page 543.
[10]   Advance Version, Report of the GCF to the COP, 19 September 2019, page 7.
[11]   GCF, Report on Activities of the Secretariat Addendum, 17 May 2014.
[12]  Ibid., pages 9 – 13.
[13]   Options for an Institutional Linkage between the United Nations and the Fund, 8 Oct 2014, page 6.
[14]   Ibid., page 7.
[15]   Decision 3/C.P. 17.