Daily report for 30 November 1994

COMMITTEE OF THE WHOLE

6.2 — INSTITUTIONAL STRUCTURE TO OPERATE THEFINANCIAL MECHANISM UNDER THE CONVENTION: The Committee openedwith a G-77 statement recommending the GEF as the interim, ratherthan the permanent institutional structure.

The G-77’s main points included:

• 1) the COP is the supreme body in managing the institutional structure;

• 2) mobilization of new, substantial and additional resources is the sine qua non<D> to effective implementation of the Convention and is the primary responsibility of developed countries;

• 3) the GEF, in its present state, cannot meet the Convention’s financial requirements and cannot respond to the needs or concerns of developing countries, based on the level of funds available to it;

• 4) the Secretariat should report to the next COP on possible sources of additional financing;

• 5) the GEF should continue to serve as the interim financing mechanism until the COP designates a permanent mechanism or takes other initiatives;

• 6) another pilot phase of the GEF should identify weaknesses in the GEF while the COP should examine ways to establish an independent fund;

• 7) the financial mechanism should continue on a provisional basis, to be examined at the next COP;

• 8) the current financial mechanism should be brought into conformity with Article 21;

• 9) the text of the MOU draft should be adjusted in light of these points; and

• 10) the G-77 and China would prepare a draft decision for the afternoon session summarizing their views.

In a contentious debate, a number of developing countries strongly supported the G-77 position, while a number of developed countries opposed it. Brazil, Kenya, India, South Africa, Colombia, Malawi, Jordan, Zimbabwe, Chile, Nigeria, Uganda, Pakistan, Mauritius, Cuba, Malaysia and Guinea Bissau spoke in support of the G-77 and China statement. Brazil said that even though it is a member of the GEF Council, membership in that body of non-parties to the Convention poses insurmountable difficulties. Kenya said the difference in membership between the GEF Council and the Convention, combined with other factors, c ould cause the COP to become a subsidiary body to the GEF Council. India said the structure of the financial mechanism is too uncertain and ambiguous to effectively serve the Convention. South Africa called for clear norms and standards for distributing funds without the political interference that characterized past GEF projects. Colombia said the GEF restructuring had not alleviated its doubts regarding the GEF’s effectiveness. Zimbabwe said that a distinct and separate fund was absolutely essential for proper control of funds. He said the GEF would filter COP projects and funding decisions, resulting in a slow and ponderous process. Chile said that the COP should seek alternative sources of funds and examine the possibility of an independent fund.

Mauritius said that after the GEF Chair’s comments he was moreconvinced than ever that the GEF should not become the permanentmechanism. Germany, on behalf of the EU, said it was disappointedin the G-77 and China proposal. He had hoped that uncertaintyover the financial mechanism would be replaced by certaintyregarding the predictability of the flow of funds. He said theConvention had no provision for multiple institutional structuresfor a financial mechanism. He added that the Convention had noprovisions for new sources of funding, and that there is no clearrole for an additional trust fund nor was the EU prepared tocontr ibute to on e. He recommended that the Secretariat surveythe availability of funds from existing institutions. The WorldResources Institute supported the GEF as the permanent financialmechanism. Opposing the GEF could affect funds committed to theConvention. Austria said the COP was preparing to send a signalof hesitation, distrust and dogmatism, that the goodwill of donorcountries might be weakened, and that the COP was engaging in anact of self-mutilation. Cuba endorsed the G-77 and expressedsurprise at the EU statement on additional funds. Norwaysaid that to avoid duplication of time and resources, the GEFshould be designated the permanent mechanism. Australia andSwitzerland called for the GEF as the permanent mechanism. TheUS, noting that the GEF restructuring was undertaken to addressthe needs of the Biodiversity and Climate Conventions, suggestedthe COP build on the progress made by the GEF. Malaysia, speakingin support of the G-77 and China, refuted the perceived threatthat the replenishment of funds is contingent on selection of theGEF as the permanent mechanism. She said the only certainty wasthat the GEF remains an interim mechanism under Article 39 untilthe COP decides on a permanent mechanism. The Chair, onsuggestions by Hungary and Guinea Bissau to initiate informalnegotiations, said he would establish an open-ended andtransparent contact group to address unresolved issuesunder Agenda Items 6.1, 6.2 and 6.3. The group will meet outsidethe hours of the formal sessions, with its draft decisions to beformally considered by the Committee of the Whole. The Chairdesignated Dr. John Ashe (Antigua and Barbuda) as coordinator ofthe group.

9 — MEDIUM-TERM PROGRAMME OF WORK OF THE CONFERENCEOF THE PARTIES: A number of delegations expressed their views onthe issue of standing and rotating agenda items within the mediumterm programme of work. Germany, on behalf of the EU, supportedby Australia, Canada, Japan and the United States and others,endorsed the medium-term programme of work. He suggested thatCOP-2 focus on the link between national reporting and workprograms. Australia noted that more immediate attention wasrequired on capacity building, national reports, theclearing-house mechanism, a nd the is sue of in situ and ex situgenetic resources. Brazil supported by Colombia, India andothers, proposed the following agenda items for COP-2: an adhoc intersessional working group on the adoption of a biosafetyprotocol; access to genetic resources and the equitable sharingof benefits; knowledge and practices of indigenous and otherlocal communities; and the relationship with the CSD. The itemsproposed for COP-3 included: access, transfer, and deve lopmentof technology; incentive measures; special session of the GeneralAssembly to review Agenda 21 ; and matters pending from COP-2.France said the COP will have to conduct a survey of globalbiodiversity on the basis of national inventories and highlightedthe importance of conservation. India stressed the importance ofaddressing in situ and ex situ genetic resources and theknowledge and practices of indigenous and local communities andsharing of benefits with these communities. Algeria, on behalf ofthe G-77 and China said that the G-77 would have recommendationsshortly and agreed with the EU on the review of work programme bythe COP but emphasized the need to focus on issues relevant todeveloping country needs. A representative of the Caucusof the Indigenous Peoples’ Preparatory Committee urged the COP toreorganize the work programme to include the rights of indigenouspeoples within the Convention, in particular: knowledge andpractices of indigenous peoples currently scheduled for 1997 tobe moved to 1995. Chee Yoke Ling, of the Third World Network, onbehalf of the NGO Task Force on Biosafety, stressed thatguidelines would not be an acceptable substitute to a biosafetyprotocol. Ian Fry, Greenpeace Australia emphasized the importanceof a biosafety protocol and highlighted the issue of povertyeradication in relationship to the CSD and the sustainable use ofbiodiversity. Sweden said the perennial issues before the COPwere: financial matters, transfer of technology and scientificcooperation. He suggested considering: all the ecosystems inrelation to the objectives of the Convention; a thematicreview linked to the CSD process; and work done by the FAO forconsideration by COP-3. Norway stressed issue prioritization forthe COP-2 and recommended that a biosafety instrument should bedeveloped. The US said the COP should establis h both a permanentand a rotating agenda.Malaysia reiterated the importance of convening a working groupon biosafety. Kenya urged for COP-2 consideration of biosafety,ex situ<D> collections, IPRs, incentives and indigenousknowledge. Germany, on behalf of the EU, called on COP-2 toaddress: national strategies; biodiversity indicators;determination of biodiversity components under threat and theaction needed; management of and possible extension of natureconservation areas; and conservation and sustainable use of marine biod iversity. The EU suggested that COP-3 address: financialmechanism effectiveness; policies, strategies and eligibilitycriteria and the list of incremental costs; the role of in and exsitu conservation; land-use planning; the FAO initiative on plantand genetic resources; indigenous rights; review of the globalbiodiversity assessment; scientific and technical programs; andconservation and sustainable use of biodiversity in agriculturaleco systems. New Zealand suggested that the permanent agendaaddress the consideration of the reports of the Convention’ssubsidiary bodies and communications with other conventions andprocesses involved with conservation. China called for the firsttwo years to focus on: the clearing-house mechanism; SBSTTA; andtechnical and technological exchanges and human resourcestraining. China also supported a working group to establishbiosafety guidelines with a view towards the possible negotiationof a protocol. Denmark urged consideration of: access to geneticresources; biosafety; and knowledge and practices of indigenouspeoples and other local communities. Germany, on behalf of theEU, supported the creation of international voluntary guidelineson biosafety and called on the COP to consider the need for, andmodalities of a binding instrument, as well as the establishmentof an ad hoc work group of technical experts to assist the COP.

UP FROM THE BEACH

While many delegates feared that the COP would be consumed bytedious procedural debate, GEF discussions on Tuesdayre-opened the proverbial Pandora’s box proving once again thatOECD and G-77 countries are polarized as ever on the financialmechanism, although not as divided as in Nairobi. While the EUand other Northern governments expressed their unanimous supportfor the GEF as the institutional structure for the financialmechanism, it is evident that the G-77 is itself divided on t heissue. The G-77’s acceptance of the GEF as the interim measurehas shown a certain degree of conciliation. Nevertheless, thedebate within the group has pitted certain countries, such asChina, who appear ready to support the GEF as a possiblepermanent mechanism against those countries, such as

Malaysia and Brazil, who continue to object to the GEF and preferthe consideration of a separate mechanism altogether. Unless astrong indication is given from this COP, man y Northerngovernments are concerned that funding for biod iversity projectsin the immediate future will be jeopardized. But as well, theywill face increasing difficulties in mobilizing support forfuture replenishment of the GEF back in national capitals. Theirony in this debate is that the GEF Council is comprised of manyof the same governments as those represented here in the COP.However, the fact that many delegations brought their GEF Councilmembers is an indication of the potential for greaterunderstanding and coordinati on between the COP and the GEF.

THINGS TO LOOK FOR TODAY COMMITTEE OF THE WHOLE:

The Committee of the Whole will continue with the ever-growinglist of speakers on agenda item 9 (Medium-Term Work Programme).It will also take up the clearing-house mechanism and item 6.5(Selection of a competent Secretariat). The Chair urged delegatesto come prepared to discuss all remaining agenda items.

THE G-77 DRAFT DECISION ON 6.2: Look for copies of the draft G-77decision on Agenda Item 6.2 that should be available during theday.