Climate Funds and Sustainable Development: Who Pays in the End? (Sustainable Development Goals Series) 3031502175, 9783031502170

Table of contents :
Preface
Contents
Abbreviations
List of Tables
1 Introduction
2 Climate Funds and Sustainable Development
1 Introduction
2 Averting Climate Impacts in Developing Countries
2.1 SDG 13 and the Climate Funds
2.2 A Picture of Global Climate Finance. How Is SDG 13 Operationalized?
3 The Unintended Adverse Impacts of the Climate Funds
3.1 Climate Mitigation Projects and Programs
3.2 Climate Adaptation Projects and Programs
3.3 Other Projects and Programs
4 The Literature on the Funds’ Impacts: Pursuing Consensus on Further Reforms
5 Final Remarks
3 Participation in the Climate Funds
1 Introduction
2 Content and Scope of Participation in Climate Finance
3 Participation in the Climate Funds
3.1 The GEF Funds
3.1.1 Range of Participation
3.1.2 Influence of Participants
3.1.3 Resources Required to Participate Effectively
3.2 The AF
3.2.1 Range of Participation
3.2.2 Influence of Participation
3.2.3 Resources Required to Participate Effectively
3.3 The GCF
3.3.1 Range of Participation
3.3.2 Influence of Participation
3.3.3 Resources Required to Participate Effectively
4 Critical Assessment of Participation
4.1 Range of Participation
4.2 Influence of Participants
4.3 Resources Required to Participate Effectively
5 Final Remarks
4 Transparency in the Climate Funds
1 Introduction
2 Content and Scope of Transparency in Climate Finance
3 Transparency in the Climate Funds
3.1 The GEF Funds
3.1.1 Sufficiency of Information
3.1.2 Clarity and Accessibility of Information
3.1.3 Restrictions on Information Disclosure
3.2 The AF
3.2.1 Sufficiency of Information
3.2.2 Clarity and Accessibility of Information
3.2.3 Restrictions on Information Disclosure
3.3 The GCF
3.3.1 Sufficiency of Information
3.3.2 Clarity and Accessibility of Information
3.3.3 Restriction on Information Disclosure
4 Critical Assessment of Transparency
4.1 Sufficiency of Information
4.2 Clarity and Accessibility of Information
4.3 Restrictions on Information Disclosure
5 Final Remarks
5 Accountability in the Climate Funds
1 Introduction
2 Content and Scope of Accountability in Climate Finance
3 Accountability in the Climate Funds
3.1 The GEF
3.1.1 Legal Status of Decisions and Associated Remedies
3.1.2 Access to the CRC by Stakeholders
3.1.3 Substantive Assessment
3.2 The AF
3.2.1 Legal Status of Decisions and Associated Remedies
3.2.2 Access to the ACHM by Stakeholders
3.2.3 Substantive Assessment
3.3 The GCF
3.3.1 Legal Status of Decisions and Associated Remedies
3.3.2 Access to the IRM by Stakeholder
3.3.3 Substantive Assessment
4 Critical Assessment of the Review Mechanisms
4.1 Legal Status of Decisions and Associated Remedies
4.2 Access to the Review Mechanisms by Stakeholders
4.3 Substantive Assessment
5 Final Remarks
6 Recommendations: Reforming the Climate Funds
1 Introduction
2 Recommendations for Participation
2.1 Range of Participation
2.2 Influence of Participation
2.3 Resources Required to Participate Effectively
3 Recommendations for Transparency
3.1 Sufficiency of Information and Reasons
3.2 Clarity and Accessibility of Information and Reasons
3.3 Restrictions on Information and Reasons Disclosure
4 Recommendations for Accountability
4.1 Legal Status of Decisions and Associated Remedies
4.2 Access to Review Mechanisms by Stakeholders
4.3 Substantive Assessment
5 Final Remarks
Bibliography
Index

Citation preview

Sustainable Development Goals Series

SDG: 13 Climate Action

Climate Funds and Sustainable Development Who Pays in the End? Gonzalo Larrea

Sustainable Development Goals Series

The Sustainable Development Goals Series is Springer Nature’s inaugural cross-imprint book series that addresses and supports the United Nations’ seventeen Sustainable Development Goals. The series fosters comprehensive research focused on these global targets and endeavours to address some of society’s greatest grand challenges. The SDGs are inherently multidisciplinary, and they bring people working across different fields together and working towards a common goal. In this spirit, the Sustainable Development Goals series is the first at Springer Nature to publish books under both the Springer and Palgrave Macmillan imprints, bringing the strengths of our imprints together. The Sustainable Development Goals Series is organized into eighteen subseries: one subseries based around each of the seventeen respective Sustainable Development Goals, and an eighteenth subseries, “Connecting the Goals”, which serves as a home for volumes addressing multiple goals or studying the SDGs as a whole. Each subseries is guided by an expert Subseries Advisor with years or decades of experience studying and addressing core components of their respective Goal. The SDG Series has a remit as broad as the SDGs themselves, and contributions are welcome from scientists, academics, policymakers, and researchers working in fields related to any of the seventeen goals. If you are interested in contributing a monograph or curated volume to the series, please contact the Publishers: Zachary Romano [Springer; zachary. [email protected]] and Rachael Ballard [Palgrave Macmillan; rachael. [email protected]].

Gonzalo Larrea

Climate Funds and Sustainable Development Who Pays in the End?

Gonzalo Larrea Pompeu Fabra University Barcelona, Spain

ISSN 2523-3084 ISSN 2523-3092 (electronic) Sustainable Development Goals Series ISBN 978-3-031-50217-0 ISBN 978-3-031-50218-7 (eBook) https://doi.org/10.1007/978-3-031-50218-7 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Paper in this product is recyclable.

Preface

This book has been a long time in the making. I embarked on this journey in September 2017 in Florence, Italy, when I started investigating the global climate regime at the European University Institute as a Ph.D. researcher. More than six years have passed since then, and during this time, several factors have shaped these pages. Before the journey started, the term “Anthropocene” had started to gain resonance within the scientific community to refer to our geologic era. An era shaped by human intervention. Coined in the spirit of environmental alarm, I always considered “Anthropocene” as a reminder of the fact that we have engineered a climate system capable of disrupting life on the Earth as we know it. And while we cannot accurately predict all the suffering that our current actions will bring in the future, we can observe that the world has already started to change—and not for the better. As you, the reader of this book, and anyone with even a modest interest in climate action may have observed, much attention is paid to the urgency of establishing Climate Funds and escalating finance to confront the multifarious climate catastrophes predicted by the scientific community. My initial journey to Florence and the commencement of my research on the book’s topic were driven by a genuine interest in

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examining the adequacy of these endeavors. However, as I delved deeper into the subject, I was taken aback by the revelation that, all too often, the decisions of the very funds established to address climate impacts in developing nations result in adverse consequences for the very people they are intended to benefit. Consequences that range from forced relocations and food insecurity to even conflicts within communities over scarce resources. Over the last years, I have witnessed a growing recognition of the imperative for Climate funds to undergo institutional reforms to address some of their shortcomings. Yet, much of the discourse is still centered on the need to streamline lending processes and enhance efficiency. And while a few have discussed the root causes of the adverse impacts on local communities and potential solutions, an in-depth appraisal and comparison of all sources of these impacts and in relation to all the main Climate Funds is notably absent. The varied array of perspectives and the lack of holistic solutions impede the formulation of pertinent recommendations for preventing or mitigating these dire consequences. Thus, in the years following the completion of my Ph.D., I have decided to transform my research into this book with the hope of bringing much-needed attention to this crucial yet overlooked topic and redirecting ongoing reform discussions toward the pressing matter of delivering climate action that resonates with grassroots communities. Notably, this book represents an unprecedented work as it evaluates the practices and policies of all the main Climate Funds from multiple dimensions, compares them, and offers systemic and comprehensive recommendations for policymakers. With these recommendations, I hope that, someday, vulnerable communities will not find themselves bearing a disproportionate cost of climate impacts due to the very funding designed to assist them. Throughout this journey, I have been truly fortunate to receive invaluable support from multiple people. I must begin by expressing my profound gratitude to my mentor, Joanne Scott, whose support and guidance over my years at the European University Institute have undoubtedly served as the cornerstone of this book. I am also deeply grateful to Peer Zumbansen, Mar Campins, Deirdre Curtin, and my colleagues from Pompeu Fabra University, whose insights and feedback have played an

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instrumental role in transforming my research into these pages. And last but not least, I want to thank my parents, Roberto, Amama, Julia, and a long list of friends and relatives whose encouragement and belief in me have been a constant source of motivation. Barcelona, Spain

Gonzalo Larrea

Contents

1

Introduction

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Climate Funds and Sustainable Development 1 Introduction 2 Averting Climate Impacts in Developing Countries 2.1 SDG 13 and the Climate Funds 2.2 A Picture of Global Climate Finance. How Is SDG 13 Operationalized? 3 The Unintended Adverse Impacts of the Climate Funds 3.1 Climate Mitigation Projects and Programs 3.2 Climate Adaptation Projects and Programs 3.3 Other Projects and Programs 4 The Literature on the Funds’ Impacts: Pursuing Consensus on Further Reforms 5 Final Remarks

7 7 8 8

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Participation in the Climate Funds 1 Introduction 2 Content and Scope of Participation in Climate Finance 3 Participation in the Climate Funds 3.1 The GEF Funds 3.2 The AF 3.3 The GCF 4 Critical Assessment of Participation

18 22 23 26 30 32 41 43 43 44 52 53 59 63 67

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CONTENTS

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4.1 Range of Participation 4.2 Influence of Participants 4.3 Resources Required to Participate Effectively Final Remarks

69 76 82 82

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Transparency in the Climate Funds 1 Introduction 2 Content and Scope of Transparency in Climate Finance 3 Transparency in the Climate Funds 3.1 The GEF Funds 3.2 The AF 3.3 The GCF 4 Critical Assessment of Transparency 4.1 Sufficiency of Information 4.2 Clarity and Accessibility of Information 4.3 Restrictions on Information Disclosure 5 Final Remarks

87 87 89 94 96 101 105 110 111 118 121 123

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Accountability in the Climate Funds 1 Introduction 2 Content and Scope of Accountability in Climate Finance 3 Accountability in the Climate Funds 3.1 The GEF 3.2 The AF 3.3 The GCF 4 Critical Assessment of the Review Mechanisms 4.1 Legal Status of Decisions and Associated Remedies 4.2 Access to the Review Mechanisms by Stakeholders 4.3 Substantive Assessment 5 Final Remarks

127 127 129 135 136 139 143 147 148 159 165 171

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Recommendations: Reforming the Climate Funds 1 Introduction 2 Recommendations for Participation 2.1 Range of Participation 2.2 Influence of Participation 2.3 Resources Required to Participate Effectively 3 Recommendations for Transparency 3.1 Sufficiency of Information and Reasons 3.2 Clarity and Accessibility of Information and Reasons

177 177 178 178 181 183 183 183 185

CONTENTS

4

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3.3 Restrictions on Information and Reasons Disclosure Recommendations for Accountability 4.1 Legal Status of Decisions and Associated Remedies 4.2 Access to Review Mechanisms by Stakeholders 4.3 Substantive Assessment Final Remarks

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186 187 187 188 189 191

Bibliography

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Index

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Abbreviations

ACHM ADB AF AFB AfDB CDM CEO CMP COP CRC CSOs CSP EBRD EFC FAO FPIC GCF GEF GHG IAP IFAD IMF IPCC IRM LDCF MDBs

Ad Hoc Complain Handling Mechanism Asian Development Bank Adaptation Fund Adaptation Fund Board African Development Bank Clean Development Mechanism Chief Executive Officer COP Serving as the Meeting of the Parties to the Kyoto Protocol Conference of the Parties Conflict Resolution Commissioner Civil Society Organizations Country Support Program European Bank for Reconstruction and Development Ethics and Finance Committee Food and Agriculture Organization Free, Prior and Informed Consent Green Climate Fund Global Environment Facility Greenhouse Gas Information Appeals Panel International Fund for Agricultural Development International Monetary Fund Intergovernmental Panel on Climate Change Independent Redress Mechanism Least Developed Countries Fund Multilateral Development Banks xiii

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ABBREVIATIONS

NDA NPFE ODA OECD OPGs PAs PPRC SCCF SDG 13 SDGs UN UNDP UNEP UNFCCC WRI WTO

National Designated Authority National Portfolio Formulation Exercises Official Development Assistance Organisation for Economic Co-operation and Development Operational Policies and Guidelines for Parties to Access Resources from the Adaptation Fund Partner Agencies Project and Programme Review Committee Special Climate Change Fund Goal 13 of the UN’s 2030 Agenda for Sustainable Development Sustainable Development Goals United Nations United Nations Development Programme United Nations Environmental Programme United Nations Framework Convention on Climate Change World Resources Institute World Trade Organization

List of Tables

Chapter 3 Table 1

Participation in the climate funds

68

Chapter 4 Table 1

Transparency in the Climate Funds

111

Chapter 5 Table 1

Accountability in the Climate Funds

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CHAPTER 1

Introduction

Much attention has been paid to the need to mobilize climate finance to developing countries in order to strengthen resilience and reduce vulnerability to climate impacts. However, the negative impacts that funded projects can cause on individuals based in recipient countries have been much less studied. The growing attention directed toward enabling climate finance without commensurate consideration of the quality and impact of the projects being funded has created a significant paradox: that the very individuals who stand to benefit are the ones who end up paying the price of climate finance. The imperative to rapidly mobilize climate finance to vulnerable countries at an unprecedented scale is beyond any doubt. Some 75 to 80% of the costs of the damage caused by climate change are expected to be borne by developing countries. These costs loom large, anticipated to escalate to an annual sum of $270 billion over the next decade. Tragically, the majority of these affected countries will not have the capacity to bear such onerous financial strain, which will exacerbate the multifarious problems that they already face. The choice of the title of the book is not aleatory: ‘climate funds and sustainable development’ encapsulates the proposed solution to what may well be one of the most complex problems ever faced by humanity.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 G. Larrea, Climate Funds and Sustainable Development, Sustainable Development Goals Series, https://doi.org/10.1007/978-3-031-50218-7_1

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The increasingly evident connection between climate change and development is rife with complexities and ethical dilemmas. The fact that developing countries are the least responsible for creating a problem that will nonetheless hit them the hardest while having the weakest capacity to deal with it, represents a reality that is garnering increasing attention.1 Prompt and decisive action to mobilize climate finance and support sustainable development is essential to safeguard the lives and livelihoods of vulnerable communities, a commitment echoed in Goal 13 of the United Nation’s 2030 Agenda for Sustainable Development (SDG 13). In alignment with this goal and with the aim of enhancing the resilience of developing nations in the face of climate change, various global institutions have been established. At the forefront stands the United Nations Framework Convention on Climate Change (UNFCCC), a comprehensive regime with paramount principles, norms, and decisionmaking procedures concerning climate change.2 This entity assumes a pivotal role in the operationalization of SDG 13, mobilizing financial support to developing countries through its various Climate Funds: the Global Environment Facility (GEF) Trust Fund, the Least Developed Countries Fund (LDCF), the Special Climate Change Fund (SCCF), the Adaptation Fund (AF), and the Green Climate Fund (GCF). These financial instruments, collectively referred to as the “Climate Funds” hereafter, are competent to receive and ultimately approve developing countries’ applications for climate funding. However, the experience of these Funds reveals that, far too often, funding can inadvertently exacerbate the very hardships it aims to alleviate. Consider, for instance, the LDCF’s Ecosystem-Based Adaptation for Rural Resilience, a USD 7.57 million project that was approved in 2015. Proposed by Tanzania in collaboration with the GEF Agency UNEP, the project aimed to enhance climate adaptation in some Tanzanian 1 R.A. Warrick and A.A. Rahman, ‘Future Sea Level Rise: Environmental and SocioPolitical Considerations’ in I.L. Mintzer (ed.), Confronting Climate Change: Risks, Implications and Responses (1992) Cambridge University Press, 105; K. Pomeranz, The Great Divergence. China, Europe, and the Making of the Modern World Economy (2000) Princeton University Press; J. Gupta, The History of Global Climate Governance (2014) Cambridge University Press. 2 A. Dzebo and J. Stripple, ‘Transnational Adaptation Governance: An Emerging Fourth Era of Adaptation’ (2015) 35 Global Environmental Change, 423–435; See also, Å. Persson, ‘Institutionalising Climate Adaptation Finance Under the UNFCCC and Beyond: Could an Adaptation Market Emerge?’ (2011) Stockholm Environment Institute.

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rural communities by strengthening ecosystem resilience and diversifying livelihoods.3 However, the project’s focus on infrastructural investments, particularly in the expansion of irrigation, has exacerbated land access and use conflicts between local farmers and the Maasai community. These conflicts are to a great extent connected to the project’s oversight of the distinct livelihoods, adaptive practices, and resource access of the two communities. The Maasai are largely dependent on pastoralism, and the irrigation expansion constricts their livestock mobility and access to riparian calving areas, a critical resource for their pastoral systems. Simultaneously, the proportion of irrigated land to which the Maasai community has access and for which they have received land certificates as compared to neighboring farmers is negligent. Consequently, the Maasai find themselves compelled to encroach upon the farmers’ land for their livelihood activities and their livestock to have access to water. These incursions into farmland, in turn, have intensified tensions, ultimately escalating into deadly armed conflicts between the two groups.4 This is not a dystopian vision, but a telling example of the unsettling reality of many vulnerable communities. Indeed, while the success of the mitigation and adaptation policies of developing countries—and therefore, their capacity to avoid dramatic climate change-related impacts— depends on the provision of climate finance, these types of initiatives frequently engender adverse consequences over the livelihoods and rights of these stakeholders, often manifesting through encroachments on their lands and leading to reallocations, fostering food insecurity or even instigating conflicts between communities over resources.5 Accordingly, 3 GEF, ‘Ecosystem-Based Adaptation for Rural Resilience’ (2015) GEF, https://www. thegef.org/project/ecosystem-based-adaptation-rural-resilience, accessed 22 June 2023; Montego Bay Marine Park, ‘Negril Breakwater’ (2016) Montego Bay Marine Park, http://www.mbmpt.org/2016/07/29/negril-breakwater/, accessed 1 March 2023. 4 T.A. Smucker et al., ‘Differentiated Livelihoods, Local Institutions, and the Adaptation Imperative: Assessing Climate Change Adaptation Policy in Tanzania’ (2015) 59 Geoforum, 45–48. 5 See e.g., A.G. Patt and D. Schröter, ‘Perceptions of Climate Risk in Mozambique: Implications for the Success of Adaptation Strategies’ (2008) 18(3) Global Environmental Change, 458–467; J. Omukuti, ‘Country Ownership of Adaptation: Stakeholder Influence or Government Control?’ (2020) 113 Geoforum, 26–38; P. Veit, D. Vhugen, and J. Miner, ‘Threats to Village Land in Tanzania: Implications for REDD+ Benefit-Sharing Arrangements’ in L. Naughton-Treves and C. Day (eds.) Lessons About Land Tenure, Forest Governance and REDD+: Case Studies from Africa, Asia and Latin America (2012) Madison Land Tenure Center.

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individuals based in recipient countries paradoxically find themselves bearing a higher cost of climate impacts as a result of the very funding intended to assist them. If the success of realizing SDG 13 and increasing developing countries’ capacity to cope with climate change depends on these global Funds, but the lives and livelihoods of individuals based in those countries can be profoundly impacted by the funding decisions of the latter, then the Funds need to undergo profound institutional reforms in order to avoid or redress the negative repercussions that their projects can cause in recipient countries. Yet, while there is a growing recognition of the necessity of reforming the Climate Funds to address their existing shortcomings, much of the attention remains focused on the need to enable more lending and enhance efficient capital usage. Regrettably, the impacts that these global institutions wield upon the rights and interests of local stakeholders in recipient countries are being discussed much less. In academia, a body of literature has studied this complex matter. This literature contends that the origins of these adverse consequences are, to some extent, intertwined with deficiencies in the transparency, participation, and accountability of the Climate Funds toward local communities. These assertions have the potential to capture the attention of policymakers and direct their focus to these pressing issues. However, they present varying perspectives on the underlying causes of the damaging impacts of the Funds on local populations, and it remains unclear when the performance of the Funds could be deemed inadequate and how it might lead to negative effects in recipient countries. Furthermore, these critical assessments fall short of articulating the intricate and multifaceted interplay that exists among transparency, participation, and accountability, leaving a significant gap in the understanding of how they collectively contribute to the adverse impacts on the rights and interests of individuals. Overall, there is no comprehensive and in-depth appraisal of all conceivable sources of negative impacts coupled with a comparative analysis of all the different Climate Funds. Instead, the scope of their analysis is frequently confined to isolated components within specific Funds. The interrelationship between inadequate accountability mechanisms, limited stakeholder engagement, and deficient transparency can give rise to a domino effect of challenges. Drawing from the case of Tanzania, the disconnection between the infrastructural investments and the local reality of the inhabitants is not solely attributable to a singular factor, but rather ensues from the convergence of opacity, inadequate stakeholder

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involvement and weak review processes. An amalgamation of factors that ultimately further worsened the livelihoods and water security of local communities, thereby exacerbating the very issue the project initially sought to address. As a result of the literature’s fragmented approach, the recommendations suggested to address these issues are broad and dispersed. The book fills this lacuna, making a crucial contribution to the ongoing debate concerning the reform agenda of the Climate Funds. Drawing from a comprehensive and comparative evaluation of the combination of factors within all existing Climate Funds under the UNFCCC framework that can potentially undermine the rights and interests of local stakeholders, the book unravels a clearer picture of the gaps in their policies and the challenges that lie ahead. From this analysis, the book concludes with highly precise and tailored recommendations for the imperative institutional reforms that these Funds should undergo to foster a more equitable, transparent, and participatory approach to climate finance. Apart from this introductory chapter, the book is structured into five additional chapters. Chapter 2 lays the foundations for the book. It introduces the Climate Funds that have been established in order to assist developing countries and, drawing upon nine exemplary case studies, the chapter illustrates the far-reaching implications of the decisions of any of these funds, underscoring the potential consequences that such decisions can have on individuals situated within recipient countries. Amidst this backdrop, the chapter further engages in a comprehensive literature review of the main proposals aimed at redressing such impacts by reforming the transparency, participation, and accountability of the Climate Funds. While these suggestions hold merit, the chapter demonstrates that they are insufficient to prevent all the negative repercussions that can arise within local communities. The succeeding three chapters explore the extent to which the standards of stakeholder participation (Chapter 3), transparency (Chapter 4), and accountability (Chapter 5) are upheld in the resource allocation process of the different Funds. More concretely, from an extensive literature review, each of these chapters defines the content and scope of each standard in global institutions in general, as well as in the specific context of the Climate Funds. Subsequently, they dissect the policies of the Funds governing these standards and undertake a critique of the performance of these Funds. Ultimately, the chapters evaluate the implications of the Funds’ policies and practices in the rights and interests of individuals.

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Finally, Chapter 6 presents the key findings and overarching recommendations of the book. Drawing from the primary lessons distilled from the book’s comprehensive and comparative analysis of the policies and practices of the Climate Funds, it proposes necessary reforms for policymakers to consider in order to enhance participation, transparency, and accountability within each Fund. These recommendations strive to ensure that the individuals poised to benefit from the operationalization of SDG 13 do not find themselves bearing a higher cost of climate impacts. Overall, this book is relevant, first and foremost, as an examination of the extent to which the Climate Funds are adequate for achieving SDG 13 and addressing climate change impacts in developing countries. However, the crux of this matter transcends the mere evaluation of the sufficiency or efficacy of these efforts found in much of the literature. The book’s central inquiry revolves around how these Climate Funds and their respective policies and practices can serve as the bastions of support and resilience for the local realities of these vulnerable regions. The book thus fundamentally explores the underlying causes of the unintended adverse impacts they can have on the very communities they aim to help, and presents tailored recommendations capable of materializing the laudable aspirations of SDG 13 without implying that the individuals who should benefit from climate finance are the ones who pay in the end.

CHAPTER 2

Climate Funds and Sustainable Development

1

Introduction

The world is changing. It has been changing over the past few centuries, but only in recent times are these changes beginning to materialize before our eyes. Already one degree above pre-industrial levels, the news is filled with floods, droughts, wildfires, rises in sea-level, and species disappearing from the face of the Earth. Evidence suggests that the brunt of these impacts will disproportionately afflict developing countries, bringing about severe economic implications that these nations are not capable of coping with. However, while multiple funds have been established on the global stage to alleviate the climate burdens borne by these vulnerable countries, their implementation has, on multiple occasions, inadvertently led to significant negative impacts on the socioeconomic and environmental welfare of their local communities. These unintended consequences extend far beyond the original objective of the funded initiatives, often resulting in severe issues such as land dispossession, food and water insecurity, or even armed conflicts between local groups. Accordingly, the very funds intended to assist these communities in combating climate change may be exacerbating their vulnerabilities, leaving them to bear a disproportionate burden of the consequences they should be mitigating. How can policymakers ensure that assisting developing countries through climate

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 G. Larrea, Climate Funds and Sustainable Development, Sustainable Development Goals Series, https://doi.org/10.1007/978-3-031-50218-7_2

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finance does not result in those who should benefit from it ending up having to bear a higher cost of climate impacts? To set the stage for addressing this question, this chapter will introduce the main mechanisms through which climate finance is mobilized to developing countries, their impacts on local communities, and the existing body of literature analyzing the root causes of these impacts. First, the chapter will delve into SDG 13 and the Climate Funds designed to operationalize this goal, shedding light on the main avenues through which climate finance is channeled to developing countries. Subsequently, a review of nine illustrative case studies will reflect on the diverse array of negative impacts that the Funds often have on individuals based in recipient countries. Finally, drawing from an in-depth literature review on the potential causes behind these impacts, the chapter will demonstrate that scholars’ proposed reforms are inadequate to ensure that climate finance is allocated to developing countries without negatively affecting local communities.

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Averting Climate Impacts in Developing Countries

2.1

SDG 13 and the Climate Funds

Climate action involves costs associated with both mitigating greenhouse gas (GHG) emissions and adapting to climate impacts. Mitigation initiatives revolve around reducing the amount of GHG emissions released into the atmosphere that lead to climate change,1 while adaptation encompasses the socioeconomic and ecological adjustments to address climate impacts and minimize damages.2 All these efforts require considerable expenses, including transitioning to renewable energy sources, improving

1 UNFCCC, ‘Introduction to Mitigation’ (2018) UNFCCC, https://unfccc.int/top ics/mitigation/the-big-picture/introduction-to-mitigation, accessed 16 April 2018. 2 UNFCCC, ‘What Does Climate Adaptation and Resilience Look Like?’ (2019), Global Centre on Adaptation, https://gca.org/what-does-climate-adaptation-and-resili ence-look-like/, accessed 27 July 2021; The Intergovernmental Panel on Climate Change (IPCC)defines climate change adaptation as the “adjustments in natural or human systems in response to actual or expected climatic stimuli or their effects, which moderates harm or exploits beneficial opportunities”. See, IPCC, ‘Climate Change 2007: Synthesis Report. Contribution of Working Groups I, II and III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change’ (2007) IPCC, 27.

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energy efficiency, building resilient infrastructure, protecting coastal areas, or other crucial elements like human resources, regulatory frameworks, or data collection, analysis, and dissemination.3 Climate change is often referred to as a development problem.4 This is due to the fact that the regions most severely affected by it are those with lower levels of growth and gross income that have the fewest resources to curtail GHG emissions and adapt to its impacts.5 Projections indicate that roughly 75–80% of the climate change-related costs are expected to be borne by developing countries, which will exacerbate the multifaceted

3 P. Dann, ‘The Global Administrative Law of Development Cooperation’ in S. Cassese (ed.) Research Handbook on Global Administrative Law (2016) Edward Elgar, 417. 4 See, J. Gupta and N. van der Grijp, Mainstreaming Climate Change in Development Cooperation: Theory, Practice and Implications for the European Union (2010) Cambridge University Press, 8–9; UNDP, Fighting Climate Change: Human Solidarity in a Divided World. UNDP Human Development Report 2007–2008 (2007) Palgrave Macmillan, 1; R. Leichenko and J.A. Silva, ‘Climate Change and Poverty: Vulnerability, Impacts, and Alleviation Strategies’ (2014) 5(4) Wiley Interdisciplinary Reviews: Climate Change, 539– 556. 5 This is rooted in several factors. First, developing nations are geographically located in those areas in which climate change impacts are expected to be the most severe. Second, developing countries are more vulnerable to climate impacts, as they generally rely more on ecosystem services and natural capital and a great percentage of their population lives in exposed locations and precarious conditions. Third, susceptibility of developing countries to climate-induced impacts is notably heightened where other stressors, such as food security, access to water, poverty, or environmental degradation, persist as the overarching priorities within their agendas: nearly half of the global population lives on less than a $6.85 a day, approximately 700 million people suffer food security, a third of the world population lacks access to safe drinking water, and roughly half of the population does not have access to safely managed sanitation services. World Bank, Poverty and Shared Prosperity 2022: Correcting Course (2022) World Bank, xiii; FAO, IFAD, UNICEF, WFP and WHO, The State of Food Security and Nutrition in the World 2023. Urbanization, Agrifood Systems Transformation and Healthy Diets Across the Rural–Urban Continuum (2023) FAO, xvi; See, UNICEF and World Health Organization, ‘Progress on Household Drinking Water, Sanitation and Hygiene 2000–2017. Special Focus on Inequalities’ (2019) UNICEF and WHO. For the geographical distribution of climate impacts, see, M.R. Allen et al., ‘Framing and Context’ in V. Masson-Delmotte et al. (eds.), Global Warming of 1.5 ºC (2018) IPCC, 3.3.2.2, and 3.3.4.1; see also, L. Harrington et al., ‘How Uneven Are the Impacts of a 1.5 ºC World and Beyond?’ (2018) 20 Geophysical Research Abstracts; for the vulnerability of developing countries’ populations to climate impacts, see World Bank, Word Development Report 2010. Overview: Changing the Climate for Development (2010) World Bank, 5.

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problems they already face in terms of income, employment, welfare, infrastructure, or investment.6 Translated into economic terms, recent empirical evidence indicates that climate vulnerability in developing countries has already increased the average cost of debt by $62 billion in additional interest payments across the public and private sectors over the last 10 years, with expectations of this figure rising to between $146 and 168 billion in the next decade.7 Other empirical evidence suggests that these figures may be larger. According to the World Bank, developing countries could face mitigation costs of between USD 140 and 174 billion annually by 2030, whereas adaptation costs could rise to USD 75–100 billion per year between by 2050 in developing countries alone.8 The United Nations Environmental Programme (UNEP) suggests even higher estimates, with expected costs of USD 140–300 billion per year by 2030, and to between USD 280 and 500 billion by 2050 for adaptation efforts alone.9 Despite the absence of unanimous agreement on the specific figures, what remains indisputable is the fact that reaching the necessary GHG emissions reductions to avert the worst impacts of climate change and building resilience to these impacts requires an unprecedented mobilization of financial resources.10 However, for developing countries, reaching the required amounts of funding is mired in complexity when they have historically struggled to have access to finance. Hence, climate change represents for these countries an additional financial burden that they cannot afford. During the second half of the twentieth century, these concerns progressively captured the attention of the international community, until the urgency to mobilize climate finance for developing countries

6 World Bank (n 10), xx; Gupta (n 1), 22–23. 7 B. Buhr et al., ‘Climate Change and the Cost of Capital in Developing Coun-

tries: Assessing the Impact of Climate Risks on Sovereign Borrowing Costs’ (2018) UN Environment. 8 World Bank, ‘The Economics of Adaptation to Climate Change’ (2009) World Bank. 9 UNEP, ‘The Adaptation Finance Gap Report’ (2016) UNEP. 10 N. Stern, The Economics of Climate Change: The Stern Review (2007) Cambridge University Press, 450–467; S.C. Moser, ‘Whether Our Levers Are Long Enough and the Fulcrum Strong? Exploring the Soft Underbelly of Adaptation Decisions and Actions’ in W.N. Adger, I. Lorenzoni and K.L. O’Brien, Adapting to Climate Change: Thresholds, Values, Governance (2009) Cambridge University Press.

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to address their pressing environmental challenges raised the call for the creation of an international climate regime.11 The culmination of these efforts materialized at the 1992 Earth Summit in Rio de Janeiro, where the United Nations (UN) Climate Regime was established. The UN Climate Regime is a global framework that orchestrates three interconnected initiatives centered on cooperation and support in confronting climate change: the UNFCCC, the UN Conference on Sustainable Development, and the Millennium Development Goals, later substituted by the Sustainable Development Goals (SDGs). This triumvirate of initiatives operates under the auspices of the UN and is commonly referred to as Rio + 20.12 At its core, the SDGs constitute a mosaic of seventeen interconnected objectives created to promote global prosperity while protecting the planet. These goals rest upon two foundational principles: eradicating poverty and building economic growth, and simultaneously addressing the challenges posed by climate change and protecting the environment. Among these goals, SDG 13 stands as a pivotal cornerstone in climate action. This goal encapsulates various targets to protect the planet, including, very relevantly, implementing the commitment made by developed parties to the UNFCCC to mobilize climate finance to develop countries under target 13.a.13 In doing so, SDG 13 serves as a reminder 11 Numerous conferences were organized among different states, evidencing that developing countries are especially vulnerable to climate change effects and are therefore in need of climate finance, as emphasized in the first scientific report of the IPCC. See, J.T. Houghton, G.J. Jenkins and J.J. Ephraums (eds.), Climate Change. The IPCC Scientific Assessment (1990), Cambridge University Press. 12 These have a significant impact at an international level and cover a number of dimensions of global climate governance: environment and climate change, human health and development, and sustainable development objectives. But more concretely, the principles, norms, rules, and decision-making procedures have evolved under the UNFCCC. There are also other international forums that have an influential role, such as the World Economic Forum and the G7/G20. See, S.D. Krasner, ‘Structural Causes and Regime Consequences: Regimes as Intervening Variables’ (1982) 36(2) International Organization, 186. 13 “Implement the commitment undertaken by developed-country parties to the United Nations Framework Convention on Climate Change to a goal of mobilizing jointly USD 100 billion annually by 2020 from all sources to address the needs of developing countries in the context of meaningful mitigation actions and transparency on implementation and fully operationalize the Green Climate Fund through its capitalization as soon as possible.” See, United Nations, ‘Goals 13 Take Urgent Action to Combat Climate Change and Its Impacts’ (2023) United Nations, https://sdgs.un.org/goals/goal13, accessed 11 August

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of the imperative to turn pledges into effective actions to effectively enable vulnerable countries to grapple with the multifaceted challenges they face. As for the UNFCCC, it is a treaty-based international framework established within the UN Climate Regime that comprises all principles, norms, and rules associated with global climate action, including cooperation and assistance to developing countries on climate finance. It has its own secretariat based in Bonn, Germany, and its institutions include a Conference of the Parties (COP)—the supreme decision-making body of the regime where all Member States are represented—and a financial mechanism14 dedicated to “the provision of financial resources on a grant”—which do not have to be returned—“or concessional basis” to developing countries.15 The pledges referred to by SDG 13 to mobilize climate finance to developing countries amount to USD 100 billion annually,16 in the light of Article 4(3) of the constituent treaty of the UNFCCC, the UNFCCC Convention,17 and Article 9(1) of the other main instrument of this legal framework, the Paris Agreement.18 Under the UNFCCC, the operation of these pledges takes form in the UNFCCC financial mechanism, which has been entrusted to three operating entities, and a total of five Climate Funds.19 These entities “aim to ensure efficient access to financial 2023. 14 The UNFCCC financial mechanism was established with the adoption of the UNFCCC Convention and later extended to the Paris Agreement. The financial mechanism can be defined as “the totality of legal, institutional and procedural arrangements that regulate and make possible the flow of financial resources mandated by” the UNFCCC Convention and the Paris Agreement. See, F. Yamin and J. Depledge, The International Climate Change Regime: A Guide to Rules, Institutions and Procedures (2004) Cambridge University Press, 283. 15 See, Dzebo and Stripple (n 2); GEF, ‘Time to Adapt: Insights from the Global Environment Facility’s Experience in Adaptation to Climate Change’ (2016) GEF, 20; See also, P. Sands and J. Peel (eds.), Principles of International Environmental Law (2012) 3 Cambridge University Press, 35. 16 Decision 1/CP.21, para. 114, in relation to Paris Agreement, Art. 2.1.c. 17 See, UN General Assembly, ‘United Nations Framework Convention on Climate

Change’ (1994) A/RES/48/189 (Convention). 18 UNFCCC, ‘Conference of the Parties (xxi), held in Paris from 30 November to 12 December. Adoption of the Paris Agreement’ (2016) FCCC/CP/2015/L.9 (Paris Agreement). 19 In 2022, the Member States of the UNFCCC agreed to establish a sixth fund, the Loss and Damage Fund. However, as of the time of this writing, this sixth fund is still not

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resources through simplified approval procedures and enhanced readiness support for developing countries (…) in the context of their national climate strategies and plans.”20 Three of these Funds, the Global Environment Facility (GEF) Trust Fund, the Least Developed Countries Fund (LDCF), and the Special Climate Change Fund (SCCF), are managed by the GEF, which is one of the three operating entities of the UNFCCC financial mechanism. Initially conceived as a pilot project in 1991,21 the GEF underwent a permanent restructuring in 1994 led by the World Bank, the UNDP, and the UNEP, which transformed it into a facility tasked with managing trust funds financing climate change initiatives.22 The first Climate Fund that was created under the umbrella of the GEF was the GEF Trust Fund, which was established on the eve of the 1992 Rio Earth Summit to fund climate adaptation and mitigation projects in developing countries.23 The LDCF and the SCCF were both created during the 2001 COP 7 in Marrakesh.24 The LDCF was established to provide support for adaptation and vulnerability reduction policies in the least developed countries.25 In contrast, the SCCF was established with the purpose of financing climate change-related activities, programs,

operative. Consequently, although it is acknowledged that it may become fully functional and integrated into the broader spectrum of the Climate Funds in the near future, it will not be subject to the analysis in this book. 20 Paris Agreement, Article 9(9); See also, Convention, Article 11(1). 21 Established by the Resolution No. 91-5, March 14, 1991 of the Executive Direc-

tors of the World Bank. See, GEF, ‘Instrument’, 54; For more on this mechanism, see in general, I.F.I. Shihata, ‘The World Bank and the Environment: A Legal Perspective’ (1992) 16(1) Maryland Journal of International Law. 22 GEF, ‘Instrument’; For a more concrete analysis of the reasons that triggered the restructure of the GEF, see L. Boisson de Chazournes, ‘The Global Environment Facility Galaxy: On Linkages Among Institutions’ in J.A. Frowein and R. Wolfrum (eds.) Max Planck Yearbook of United Nations Law (1999) 3 Kluwer Law International, 250–252. 23 GEF, ‘Funding’ (2023) GEF, https://www.thegef.org/about/funding, accessed 13 August 2023. 24 See, COP Marrakesh, Decision 7/CP.7, para. 2 and 6. 25 Ibid, 6; UNFCCC, ‘Least Developed Countries

(LCD) Fund’ (2014) UNFCCC, https://unfccc.int/cooperation_and_support/financial_mechanism/least_dev eloped_country_fund/items/4723.php, accessed 1 February 2018.

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and measures of developing countries more generally, prioritizing adaptation and technology transfer.26 All three Funds share an independent Secretariat27 and a Council that acts as the main decision-making organ.28 The second operating entity of the UNFCCC financial mechanism is the AF. The AF was established in the 2001 COP 7 in Marrakech in order to “finance concrete adaptation projects and programmes in developing country Parties.”29 As opposed to the GEF Funds, the AF was initially set to operate under the Kyoto Protocol, although as of 2019 it has been set to operate under the Paris Agreement.30 Its Secretariat is provided by the GEF, which includes a dedicated team of officials with a certain degree of specialization in the functions that concern the operations of the AF.31 However, its decision-making organ, the Adaptation Fund Board (AFB), is administered separately from the GEF.32 The remaining Fund acting as the third operating entity of the UNFCCC financial mechanism is the Green Climate Fund (GCF). The GCF was established in the 2010 COP 16 in Cancun, Mexico, “to support projects, programmes, policies and other activities in developing country Parties” contributing toward both adaptation and mitigation.33

26 See, COP Marrakesh, Decision 7/CP.7, 2; See also, GEF, ‘Financing Adaptation Action. Least Developed Countries Fund Special Climate Change Fund’ (2012) GEF, 4. 27 The Secretariat is supported administratively by the World Bank. GEF, ‘Instrument’, para. 21. 28 In reality there are two councils administering GEF Climate Funds. The GEF Council administers and approves projects and programs of the GEF Trust Fund, and the LDCF/ SCCF Council both the LDCF and SCCF. However, the LDCF/SCCF Council is in essence the GEF Council, and only meets specifically for reasons related to the LDCF and SCCF. Global Environment Facility Evaluation Office, ‘Evaluation of the GEF Special Climate Change Fund (SCCF). Approach Paper’ (2011) GEF, para. 10; GEF, ‘Rules of Procedure for the LDCF/SCCF Council’ (2006) GEF/LDCF.SCCF.1/3, para. 7. 29 See, COP Marrakesh, Decision 10/CP.7, para. 1. 30 COP Katowice, Decision 1/CMA.1 and Decision 13/CMA.1. 31 This means that the Secretariat is also supported administratively by the World Bank,

which recruits and hires the personnel of the Fund. See, COP Bali, Decision 1/CMP.3, paras. 18 and 19; OPGs, para. 4. 32 See, OPGs, 13. 33 COP Cancun, Decision 1/CP.16, para. 102; GEF (n 20), 15.

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It was intended to work as an accelerator in relation to the implementation of the UNFCCC and the Paris Agreement,34 by upscaling successful innovations from the other Climate Funds.35 The GCF is supported by an independent Secretariat36 and governed by an independent board that acts as its main executive organ.37 Climate funding is also channeled through other parallel venues—such as official development assistance (ODA),38 —multilateral Funds,39 —such as the Strategic Climate Fund, the Clean Technology Fund, the Amazon Fund—some developed countries’ bilateral Funds,—such as the UK’s International Climate Fund, Germany’s International Climate Initiative, or Norway’s International Forest Climate Initiative—or the private sector.40 Indeed, Article 11 of the Convention establishes that climate

34 GCF Board, ‘GCF First Replenishment (GCF-1): Replenishment Summary Report’ (2019) GCF/B.24/11, paras. 2 and 3. 35 Ibid., para. 50. 36 Ibid., para. 108. 37 COP Cancun, Decision 1/CP.16. 38 ODA is a category encompassing all kinds of financial aid delivered on devel-

opment. It refers to government aid regarding concessional grants, “soft” loans (amounting to grant in at least 25%) and other flows that are designed to promote economic development and welfare of developing countries. Efforts on ODA have increasingly been relevant for climate adaptation and mitigation finance. Among other things, this is because it enables donors to target their own contributions to distinct projects, recipient countries and the institutions channeling the funding, and to quickly evaluate the results of their assistance. On the use of the word ODA see, OECD, ‘Official Development Assistance—Definition and Coverage’ (2021) OECD, https://www.oecd.org/dac/financing-sustainable-development/development-fin ance-standards/officialdevelopmentassistancedefinitionandcoverage.htm, accessed 29 July 2020; On the increased relevance of climate-related finance in ODA see, J. Ayers and D. Dodman, ‘Climate Change Adaptation and Development: The State of the Debate’ (2010) Progress in Development Studies; F. Sperling (ed.), Poverty and Climate Change: Reducing the Vulnerability of the Poor Through Adaptation (2003) World Bank; On the characteristics of ODA, see, W. Greene, ‘Aid Fragmentation and Proliferation: Can Donors Improve the Delivery of Climate Finance’ (2009) 35(3) IDS Bulletin, 72–73; World Bank, ‘World Development Report’ (2004) World Bank, 216–217. 39 Climate Funds Update, ‘The Funds’ (2019) Climate Funds Update, https://climat efundsupdate.org/the-funds/, accessed 11 January 2021. 40 According to the 2022 Biennial Assessment and Overview of Climate Finance Flows, prepared by the UNFCCC Standing Committee on Finance, in 2020 global climate finance flows were estimated at around USD 803 billion. Of these, 45 billion were attributed to MDBs, and USD 31.5 billion were channeled through bilateral, regional,

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finance may also be delivered through other bilateral, regional, and multilateral channels. Consequently, the 100 billion commitment is perceived by many as encompassing climate finance provided through avenues other than the Climate Funds, including bilateral public finance and public finance mobilized through other multilateral development banks (MDBs).41 However, developed countries’ pledges to mobilize climate finance under the UNFCCC also establish that resources mobilized shall be “new and additional,”42 which many take as referring exclusively to the Climate Funds, and not to any climate finance pledged or channeled through other means. Developing countries have long insisted on the additionality of climate finance through new channels which are separate from ODA, and pushed for the establishment of the five Climate Funds under the UNFCCC with the specific objective to mobilize “new and additional grant and concessional funding”43 to operationalize pledges under the UN Climate Regime.Against this backdrop, ‘new’ is considered to be referring to funds distinct from those previously designated for ODA, and ‘additional’ as additional to existing aid flows or to developed country promises to provide ODA.44 and other climate-specific finance channels. The private climate finance mobilized by developed countries through bilateral and multilateral channels amounted to USD 13.1 billion. UNFCCC, ‘Summary and Recommendations by the Standing Committee on Finance. Fifth Biennial Assessment and Overview of Climate Finance Flows’ (2022) UNFCCC. 41 E.g., the Organisation for Economic Co-operation and Development (OECD) counts bilateral and multilateral public climate finance as part of developed countries’ progress toward the USD 100 billion goal. See, OECD, ‘Aggregate Trends of Climate Finance Provided and Mobilised by Developed Countries in 2013–2020’ (2022) OECD Publishing. 42 See, Convention, Art. 4(3); Whereas the Paris Agreement does not establish that resources shall be “new and additional”, it establishes that the mobilization of climate finance by developed countries shall be understood “in continuation of their existing obligations under the Convention”. 43 This is stated for the GEF. See GEF, ‘Instrument for the Establishment of the Restructured Global Environment Facility’ (2019) GEF, Annex D (GEF Instrument), para. 2; Similarly, the GCF establishes that it will channel “new, additional, adequate and predictable financial resources to developing countries.” See, GCF, ‘Governing Instrument for the Green Climate Fund’ (2011) GCF, para. 3. 44 F. Yamin, ‘The European Union and Future Climate Policy: Is Mainstreaming Adaptation a Distraction or Part of the Solution’ (2005) 5(3) Climate Policy, 352–353; S. Zadek, ‘Beyond Climate Finance: From Accountability to Productivity in Addressing the Climate Challenge’ (2011) 11(3) Climate Policy, 1058–1068; B. Müller, The Reformed

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Adding complexity to this discussion, the objective of implementing developed countries’ commitment to mobilize climate finance to developing countries, as outlined in target 13.a of SDG 13, revolves around “mobilizing jointly USD 100 billion annually by 2020 from all sources ” (emphasis added). One interpretation is that this could encompass the entirety of climate finance pledged or channeled, not limited solely to the Climate Funds. However, target 13.a also explicitly refers to the GCF, aiming for its complete operationalization “through its capitalization as soon as possible.” It is noteworthy that the GCF was established to channel a substantial share of the annual USD 100 billion pledged by developed country Parties,45 and is intended to become a major global financial instrument and the world’s largest Climate Fund dedicated to global financial flows.46 Consequently, the goal of target 13.a to mobilize the USD 100 billion pledge could be seen as primarily referring to the GCF, while the notion of “all sources” could relate to the remaining Climate Funds until the GCF is fully capitalized and operative. In either case, while the private sector and ODA are, and will continue to be, important contributory sources to facilitating climate finance to developing countries, the Climate Funds in general, and the GCF in particular, stand as the cornerstone of operationalizing SDG 13 and the developed countries’ commitment of mobilizing USD 100 billion per year. Moreover, these Funds play a critical role in deploying climate resources to mobilize larger flows of ODA and private funding and for achieving impact at scale by stimulating markets, fostering innovation, reducing risk, and meeting other needs that the private sector is unwilling to support. Significant sums of publicly sourced funding will be indispensable in those areas in which private returns are unattractive or overly risky, considering the potential returns of investments. In this context, the Climate Funds play a pivotal role as they offer, on the one hand, political control by virtually all developed and developing countries through the COPs of the UNFCCC; and on the other, the ability of funding large and coherent projects through an equitable governance structure that balances Financial Mechanism of the UNFCCC . Part II. The Question of Oversight. Post Copenhagen Synthesis Report (2010) Oxford Institute for Energy Studies, 5. 45 COP Cancun, decisions 1/CP.16 and 1/CP.21. 46 COP Durban, Decision 3/CP.17 (Governing Instrument), para. 32; GCF, ‘Resource

Mobilization. GCF-1’ (2020) GCF, https://www.greenclimate.fund/about/resource-mob ilisation/irm, accessed 6 October 2020.

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the interests of both donors and beneficiaries.47 Hence, while acknowledging the existence of other effective mechanisms for mobilizing climate finance to developing countries, it is crucial to examine how the creation of the Climate Funds is contributing to the advancement of SDG 13. 2.2

A Picture of Global Climate Finance. How Is SDG 13 Operationalized?

The international community’s ability to collectively address the challenges that lie ahead of most vulnerable countries depends not just on pledging the mobilization of resources, but on the actual operationalization of these pledges. How is climate finance mobilized to those countries in need? Under the Climate Funds, the mobilization of climate finance varies depending on the Fund that the potential recipient country applies to.48 However, it is generally similar in all Climate Funds in that there are at least six steps, as represented in Diagram 1. The processes in all the five Funds mainly begin with their Partner Agencies (PAs), entities—such as MDBs, specialized agencies and programs of the UN, other international organizations, bilateral development agencies, or national institutions— that act as intermediaries between the Funds and applicant developing countries. First, the PAs receive the submission of requests for funding

47 See, N. Amerasinghe et al., The Future of the Funds: Exploring the Architecture of Multilateral Climate Finance (2017) World Resources Institute (WRI), 13–16; L. Schalatek, ‘Democratizing Climate Finance Governance and the Public Funding of Climate Action’ (2012) 19(5) Democratization, 955; Greene (n 43), 73. 48 The resource allocation processes differ in at least five aspects. First, all the three GEF Funds offer the possibility of financing Enabling Activities, as opposed to the other two funds. Secondly, the GEF Funds are the only ones that include the figure of the Chief Executive Officer (CEO), who plays a fundamental role in the project and program cycle. This is because, among other things, they have the competence to ultimately approve medium-sized projects without further intervention of the Council. Thirdly, only two of the Funds, the GCF and the AF, offer a direct access modality that enables national and sub-national organisms to be funded directly and not through intermediaries. Fourthly, the GCF is the only Fund that offers the possibility to provide direct and indirect funding to private actors through its private sector facility. And fifthly, the GEF Funds and the AF offer two different procedures depending on the size of the proposal in one or two steps (USD 2 and 1 million, respectively), whereas the GCF offers just one type of procedure that can also be done in one or two steps.

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from the National Designated Authorities (NDA) of applicant countries.49 In a second instance, the PAs forward the funding request to the managing body of the Fund.50 The Secretariat of the Climate Funds then screens all proposals according to the Fund’s internal standards and can ask the PA to amend the proposal according to these standards. Thirdly, once the Secretariat establishes that the proposal is ready, it will submit it to the Board or Council of the Fund. Fourthly, the Board or Council ultimately decides on applications for climate finance. Fifthly, if approved, the World Bank, acting as a trustee of all five Climate Funds, transfers the funds upon written instruction of the Board or Council of the Fund to the PA. Finally, the project funding is released to the applicant country through the designated PA for implementation at a local level.51 The overview of the process of mobilization of climate finance to developing countries reveals that, besides the Climate Funds, there are other bodies that play a relevant role in climate finance. Most importantly, in order to access the resources of the Funds and to implement their projects and programs, each applicant country needs to select one or more PAs to be associated with the Fund to which it may apply. Each Fund partners with different PAs. The Funds managed by the GEF (the GEF Trust Fund, the LDCF, and the SCCF) collaborate with the eighteen so-called

49 To apply, the applicant country needs to select an NDA to approve the project in order to ensure the consistency of funding proposals with national climate plans. 50 For the AF, proposals follow a one-step approval process, in which the proponent submits a fully developed project document, or a two-step approval process with a brief project concept, followed by a fully developed project appraised for technical and implementation feasibility ready for financial closure afterwards. See AFB, ‘Helping developing countries build resilience and adapt to climate change. Medium-Term Strategy 2018– 2022’ (2018) AF, 20, 21, 28–30; See also, OPGs, 45, 46, 47(c), 55 and 56; For the LDCF and SCCF, and similarly for the GEF Trust Fund, US$1 million is the benchmark over which projects are full-sized projects, and below which they are defined medium-sized projects. The former is submitted with a Project Identification Form to the LDCF/SCCF Council. Once the PIF is approved, the GEF CEO endorses the project, after which it can be implemented. The latter starts with the CEO Endorsement Form directly in one step. See, GEF, ‘Accessing Resources Under the Special Climate Change Fund (2011) GEF, 12–27; See also, OECD, ‘Climate Change Adaptation—LDCF/SCCF Adaptation Monitoring and Assessment Tool’ (2013) OECD. 51 W.N. Adger, ‘Social Capital, Collection Action, and Adaptation to Climate Change’ (2003) 79 Economic Geography, 387–404; C. Folke, T. Hahn, P. Olsson, and J. Norberg, ‘Adaptive Governance of Social-Ecological Systems’ (2005) 30 Annual Review of Environment and Resources, 441–473.

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1. Request

Developing Country

2.1. Proposal

FI Secretariat

Partner Agency 2.2. Review

6. Implement

3. Ultimate

5. Transfer

Trustee

Diagram 1

consideration

4. Approval

Decisionmaking Body

General resource allocation scheme

GEF Agencies.52 The AF is linked to fifty-five Implementing Entities, out of which fourteen are Multilateral Implementing Entities,53 thirty-two

52 These are the three original GEF Agencies, who were signatories to the GEF instrument—the UN Development Programme (UNDP), the UNEP, and the Food and Agriculture Organization (FAO—together with different development banks and organizations, such as the Asian Development Bank (ADB), the African Development Bank (AfDB), or the European Bank for Reconstruction and Development (EBRD). For the complete list of agencies see, GEF, ‘GEF Agencies’ (2023) GEF, https://www.thegef. org/partners/gef-agencies, accessed 5 November 2023. 53 These are the UNDP, the FAO, the ADB, the International Fund for Agricultural Development (IFAD), the United Nations Industrial Development Organization, the World Food Program, the UNEP, the Inter-American Development Bank, the World Meteorological Organization, the AfDB, United Nations Educational, Scientific, and Cultural Organization, the EBRD, the International Bank for Reconstruction and Development, and UN Habitat. See, AF, ‘Implementing Entities (2023) AF, https://www.ada ptation-fund.org/apply-funding/implementing-entities/, accessed 5 November 2023.

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National Implementing Entities,54 and nine Regional Implementing Entities.55 Finally, the GCF partners with one hundred and eighteen approved Accredited Entities.56 Depending on the specific Funds they are affiliated with, the PAs are required to undergo different accreditation processes.57 But despite their differing names and varied accreditation requirements, all the PAs perform essentially the same functions in the resource allocation process. As intermediaries between the respective Fund and the recipient country, these entities are selected by countries seeking climate funding to receive assistance in the formulation of a coherent project or program proposal according to the Fund’s standards. Once the project or program proposal is ready, the PA takes charge of submitting it to the Fund. Finally, should the request for funding be approved by the decision-making body of the

54 Of Senegal, Morocco, Benin, Belize, Jamaica, South Africa, Jordan, Rwanda, Mexico, Argentina, Kenya, India, Costa Rica, Chile, Peru, Micronesia, Panama, Antigua and Barbuda, Ethiopia, Dominican Republic, Indonesia, Cook Islands, Armenia, Tanzania, Niger, Bhutan, Uganda, Honduras, Cote d’Ivoire, Bangladesh, Zimbabwe and Tuvalu. See, ibid. 55 These are the Banque Ouest Africaine de Developpement, the Caribbean Community Climate Change Centre, the Development Bank of Latin America, the International Center for Integrated Mountain Development, the Sahara and Sahel Observatory, the Secretariat of the Pacific Regional Environment Programme, the Pacific Community, the Central American Bank for Economic Integration, and the Caribbean Development Bank. See, ibid. 56 They include the global entities such as the FAO, UNDP, and UNEP; regional development Banks such as the AfDB, the ADB, or the EBRD; and national entities such as the Agency for Agricultural Development of Morocco or the Ministry of Environment of Rwanda. For the complete list see, GCF, ‘Partners’ (2023) GCF, https://www.greenc limate.fund/about/partners/ae, accessed 5 November 2023. 57 For the financial activities of the GEF Funds, an entity must meet the GEF Fiduciary Standards and the GEF Environmental and Social Safeguards Standards, apply to the GEF Council, and agree to a Memorandum of Understanding with the Secretariat of the GEF. For an entity to partner the AF and become an Implementing Entity, it needs to submit its accreditation application to the AFB demonstrating that it meets the fiduciary standards, environmental, social and gender policies of the Fund. Finally, in order to qualify as an Accredited Entity of the GCF, an application of an entity that satisfies the fiduciary standards, environmental, social and gender policies of the Fund may result in the signing of the Accreditation Master Agreement.

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Fund, the PA also develops and manages the implementation phase, overseeing and monitoring the project’s execution in order to ensure that it is carried out according to the Fund’s standards.58 Accordingly, the ultimate quality and impact of a project or program depend, essentially, on the standards set by the Climate Funds. These standards dictate how proposals should be elaborated, under which circumstances they may be approved, and how projects and programs shall be implemented. For instance, robust standards for transparency and local stakeholder engagement in project design maximize the potential for alignment with local realities while minimizing the inadvertent reinforcement of existing vulnerabilities. Conversely, deficient standards could lead to the endorsement and execution of projects and programs that may ultimately yield adverse consequences on the very communities these initiatives aim to protect. Consequences extend beyond the immediate scope of funded projects and can permeate into the fabric of societies, economies, and ecosystems. Consequences, such as displacement of communities, disruption of traditional livelihoods, or exacerbation of social inequalities.

3 The Unintended Adverse Impacts of the Climate Funds The experience of the Climate Funds, demonstrated in multiple climate mitigation and adaptation projects and programs, shows their potential for exerting significant negative impacts on the socioeconomic and environmental welfare of local stakeholders—such as Civil Society Organizations (CSOs), vulnerable groups, and indigenous peoples based in the recipient countries of the funded projects and programs.59 58 For the GEF, see GEF, ‘Project and Program Cycle Policy’ (2018) GEF Policy OP/ PL/01; For the AF see, OPGs; For the GCF, see GCF, ‘Project Preparation’ (2020) GCF, https://www.greenclimate.fund/projects/process, accessed 21 March 2020. 59 The GCF Board also considers private-sector actors and women as local stakeholders. However, the private sector has sometimes been found to be a reluctant participant in stakeholder processes, and to prefer to employ alternative arrangements for participation. See, Governing Instrument, para. 71; See also, A. Sharma, The Reformed Financial Mechanism of the UNFCCC: Renegotiating the Role of Civil Society in the Governance of Climate Finance (2010) Oxford Institute for Energy Studies, 11; Drawing on other political science literature, local stakeholders can comprise “groups of households, villages, communes, neighborhoods and settlements” in recipient countries. See, O.P. Manuamorn

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The chapter will now delve into nine compelling case studies that illustrate how a variety of climate projects, despite their noble intentions, have adversely affected the rights and interests of local stakeholders. These real-life examples, which are exemplary rather than representative, raise questions about the adequacy of the standards set by the Climate Funds. 3.1

Climate Mitigation Projects and Programs

Climate mitigation projects and programs have the potential to inadvertently undermine the welfare and rights of stakeholders.60 This is especially evident in those initiatives consisting of monoculture tree plantations on an industrial scale. This is because fast-growing tree species— such as eucalyptus, acacia, teak, and pine—are planted as monocultures with short rotation cycles to increase the growth of trees and maximize GHG reductions and/or wood production. However, these practices also result in huge and constant water stress—particularly with eucalyptus plantations, which are highly water consuming. Eventually, water source resources in the area are depleted. Moreover, the cultivation of industrial tree monocultures involves the use of chemical fertilizers and agrotoxins, which in turn contribute to the contamination and degradation of soils and water courses. All of this causes hardship for local stakeholders who depend on these water sources and soils for their livelihoods and food security.61 One of the various mitigation projects that have had such impacts is the GEF Trust Fund’s Addressing barriers to the adoption of improved charcoal and R. Biesbroek, ‘Do Direct-Access and Indirect-Access Adaptation Projects Differ in Their Focus on Local Communities? A Systematic Analysis of 63 Adaptation Fund Projects’ (2020) 20 Regional Environmental Change; For a discussion on vulnerable communities, see A. Titz, T. Cannon and F. Krüger, ‘Uncovering “Community”: Challenging an Elusive Concept in Development and Disaster Related Work’ (2018) 8(71) Societies. 60 See e.g., A. Ballesteros et al., ‘Power, Responsibility, and Accountability: Rethinking the Legitimacy of Institutions for Climate Finance’ (2010) 1 Climate Law, 297, 206; Smucker et al. (n 4); Veit, Vhugen and Miner (n 5); Energy Research Centre, ‘Long Term Mitigation Scenarios: Technical Summary’ (2007) Department of Environment Affairs and Tourism, 60ff. 61 World Rainforest Movement, ‘Organizations Tell the Green Climate Fund to Say NO to Funding Requests for Industrial Tree Plantations’ (2020) WRF, https://wrm. org.uy/actions-and-campaigns/organizations-tell-the-green-climate-fund-to-say-no-to-fun ding-requests-for-industrial-tree-plantations/, accessed 14 December 2020.

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production technologies and sustainable land management practices through an integrated approach, a mitigation project that was approved by the GEF Council in 2012. The Fund granted USD 3.48 million to Uganda through the PA UNDP in order to reduce carbon emissions by improving charcoal production technologies and sustainable land management.62 This initiative involved the clearance of native vegetation to make way for mainly eucalyptus plantations, which comprised over 90% of the trees planted for charcoal woodlots. However, due to the extensive use of eucalyptus trees, community members of the affected area have seen their land become barer, drier, less biodiverse, and less arable. As a consequence, local stakeholders have seen their livelihoods harmed and their food security affected. The additional stress on water resources has made it harder for them to rear cattle and has reduced arable crop yields. At the same time, the communities claim that firewood is still deficient and that eucalyptus trees are not as suitable for charcoal as the species that were cleared to facilitate planting. Therefore, instead of helping to mitigate climate change, the project has further undermined the ability of indigenous peoples to have access to resources and energy.63 This underscores the necessity of considering the broader ecosystem impacts and local necessities through adequate and meaningful consultations during the design and implementation of mitigation projects in order to ensure that benefits are not overshadowed by unintended negative impacts. Another typical example is the project Production of sustainable, renewable biomass-based charcoal for the iron and steel industry in Brazil, approved by the GEF Trust Fund in 2012. Brazil, together with the PA UNDP, applied for USD 7.15 million in order to reduce its GHG emissions from the iron and steel sector in Minas Gerais. The project aimed at developing renewable, biomass-based charcoal production, which emits

62 GEF, ‘Addressing Barriers to the Adoption of Improved Charcoal Production Technologies and Sustainable Land Management Practices Through an Integrated Approach’ (2020) GEF, https://www.thegef.org/project/addressing-barriers-adoption-improved-cha rcoal-production-technologies-and-sustainable-land, accessed 17 December 2020. 63 D. Kureeba and O. Munnion, An Investigation into the Global Environment FacilityFunded Green Charcoal Project in Uganda (2020) Global Forest Coalition, 8.

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less methane to the atmosphere than the more carbon-intensive traditional charcoal production methods.64 As in the previous example, the implementation of this project involved, among other activities, turning vast lands into monoculture eucalyptus plantations. These plantations have deforested highly biodiverse forests and dried up and polluted water courses. As a consequence, the Geraizeiros—the traditional communities of Minas Gerais—have lost access to land, which has further stressed their food sovereignty and cultural practices. Ironically, the project did not lead to any reduction of GHG emissions. Conversely, scientific evidence suggests that the associated burning of plantation thinnings has increased carbon pollution in the atmosphere. This is because of the time it takes for carbon to be accumulated by new trees and the relatively short rotation cycles in the eucalyptus plantations. Therefore, the project has incentivized the expansion of damaging eucalyptus plantations, while failing to achieve the desired climate change mitigation outcomes.65 This highlights the importance of comprehensive assessment and strategic planning to ensure that mitigation projects both align with their intended environmental goals and consider long-term ecological and social implications. Finally, a third illustrative mitigation initiative is the Forests and Land Use program Arbaro Fund—Sustainable forestry fund, a GCF project approved by the Board in March 2020. The Fund has allocated USD 25 million to invest in sustainable plantation forestry projects in Latin America and Sub-Saharan Africa.66 The program is designed to provide developing countries with a solution to increase carbon sinks by

64 GEF, ‘Production of Sustainable, Renewable Biomass-Based Charcoal for the Iron and Steel Industry in Brazil’ (2020) GEF, https://www.thegef.org/project/produc tion-sustainable-renewable-biomass-based-charcoal-iron-and-steel-industry-brazil, accessed 17 December 2020. 65 O. Munnion, ‘Climate Finance for Charcoal Production in Brazil Is Fueling Conflicts with Communities’ (2020) German Climate Finance, https://www.germancli matefinance.de/2020/05/25/climate-finance-for-charcoal-production-in-brazil-is-fuelingconflicts-with-communities/, accessed 17 December 2020; F. Giunta and O. Munnion, ‘An Investigation into the Global Environment Facility-Funded Project “Production of Sustainable, Renewable Biomass-Based Charcoal for the Iron and Steel Industry in Brazil”’ (2020) Global Forest Coalition. 66 Paraguay, Sierra Leone, Ecuador, Ethiopia, Ghana, Uganda and Peru.

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producing wood in a sustainable manner over a fifteen-year span, while conserving natural forest habitats.67 In keeping with this, the program involves planting monoculture tree plantations on an industrial scale. However, CSOs and vulnerable communities expect it to lead to far-reaching negative impacts. In addition to the effects related to the mass plantation of eucalyptus highlighted in the previous two examples—i.e., water stress, soil contamination, and biodiversity deforestation—the Arbaro Fund program is highly likely to raise social upheaval and land legacy conflicts. This is because for industrial plantations to produce quality timber in the timeframe of the program, the plantation companies need mostly fertile land where maximum timber growth per hectare can be achieved. This is usually the land on which local communities rely for maintaining their livelihoods and ensuring their food sovereignty. Plantation companies are negotiating the acquisition and leases of local population’s land for the activities of the program. However, these negotiations are very conflictual and are encountering strong local stakeholder opposition.68 Additionally, more than a hundred CSOs signed an open letter addressed to the GCF’s Board, expressing their opposition to the project. However, the Board has opted to disregard the concerns raised and back plantation companies and project promoters. The challenges encountered during the implementation of the Arbaro Fund program highlight the importance of designing projects and programs through meaningful stakeholder consultation to anticipate and prevent implementation problems. Moreover, this case further underscores the need for robust review mechanisms at the Fund level capable of reconciling diverse viewpoints and addressing adverse impacts when they emerge during the implementation of projects and programs. 3.2

Climate Adaptation Projects and Programs

The insufficient or inadequate transparency and/or local stakeholder engagement in climate adaptation project or program decision-making can give rise to policies that are disconnected from local-level realities.

67 GCF, ‘FP128. Arbaro Fund—Sustainable Forestry Fund’ (2020) GCF, https://www. greenclimate.fund/project/fp128, accessed 14 December 2020. 68 World Rainforest Movement (n 66).

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In this regard, some adaptation projects that disclosed insufficient information and overlooked or inadequately involved local communities have resulted in adverse consequences for stakeholders’ constitutional and/or customary rights over land and their livelihoods. On some occasions, this has exacerbated food insecurity or even conflicts between communities over resources.69 One telling case of an adaptation project that exemplifies such impacts is the project Green Sharm el Sheikh, approved by the GEF Trust Fund in 2019 with a budget of USD 6.21 million. This project, proposed by Egypt in collaboration with the PA UNDP, aimed to enhance adaptation to climate impacts and promote resilience through adaptive management approaches.70 However, the project has led to land tenure insecurity and dispossession of the Ababda indigenous community, the indigenous people inhabiting the southern part of Egypt’s Eastern Desert. The measures of the project included designating a significant portion of Marsa Alam as a protected area, which directly affects the territory where the Ababda community lives. As a result, the community has lost their customary rights over this land, undermining their livelihoods, and access to basic resources. Notably, the Ababda cannot access some beaches of Marsa Alam where they have traditionally fished and settled. Naturally, the local indigenous community has offered resistance to the project and used all available communication channels with state officials to voice their concerns and seek mitigation against these adverse impacts. However, their appeals and concerns seemingly have fell on deaf ears, as no substantial action has been taken to address their grievances.71 This case serves as a reminder of the importance of designing climate adaptation projects with transparent communication and comprehensive engagement with indigenous communities. By involving these communities in the planning and decision-making processes, the potential adverse

69 See e.g., Patt and Schröter (n 5), 458–467; Omukuti (n 5) 26–38; Smucker et al. (n 4), 39–50; M. Chaum et al., Improving the Effectiveness of Climate Finance: Key Lessons (2011) Brookings. 70 GEF, ‘Green Sharm El Sheikh’ (2020) GEF, https://www.thegef.org/project/ green-sharm-el-sheikh, accessed 15 December 2020. 71 Environmental Justice Atlas, ‘Tourism in Marsa Alam and Disenfranchisement of Indigenous Community, Egypt’ (2018) Environmental Justice Atlas, https://ejatlas.org/ conflict/tourism-development-in-marsa-alam-and-disenfrenchisement-of-local-indigenouscommunity, accessed 15 December 2020.

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effects on their customary land rights can be identified early on and prevented. Moreover, it also stresses the need for strong review mechanisms that can oversee the implementation of climate projects and ensure accountability should any adverse effects arise. Another typical example is the GEF Council’s project Reducing Land Degradation on the Highlands of Kilimanjaro, a 2.63 million initiative approved in 2007. Proposed by Tanzania in partnership with the PA UNDP, the project aimed to redress land degradation in the Kilimanjaro Highlands related to climate change, rapid population growth, land use change, and unsustainable harvesting.72 This was done by creating a sustainable enabling environment for shade-grown coffee by timber harvesting, charcoal making, and promoting the provision of alternative fuels. However, while the project held promising aspirations, its implementation has led to significant adverse consequences for the local communities. Governance authority over the project activities was centralized within the state, which criminalized small-scale timber harvesting, charcoal making, and wood-fuel collection, particularly impacting the livelihoods of those who had traditionally depended on these activities for sustenance. State officials gave the exclusive competence over these activities to business entrepreneurs from outside area, which charged informal rent from other users. In light of this context, local communities unable to afford the bribes or without close connections with State officials have lost their livelihoods related to these activities and access to local wildlife resources.73 Accordingly, the project, rather than enhancing sustainable practices, has resulted in the further marginalization of small-scale actors and local communities. This project ultimately reveals the complexities and challenges inherent in balancing environmental conservation, economic development, and local livelihoods. It underscores the importance of designing interventions that account for the intricate web of social, economic, and political dynamics, ensuring that the benefits are equitably distributed and that the local traditions and social structures are respected. 72 GEF, ‘SIP: Reducing Land Degradation on the Highlands of Kilimanjaro’ (2020) GEF, https://www.thegef.org/project/sip-reducing-land-degradation-highlandskilimanjaro, accessed 15 December 2020. 73 M. Leach and I. Scoones, ‘Political Ecologies of Carbon in Africa’ in M. Leach and I. Scoones, Carbon Conflicts and Forest Landscapes in Africa (2015) Routledge.

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For a third example, let’s consider Enhancing the resilience of the agricultural sector and coastal areas to protect livelihoods and improve food security, which was approved by the AFB in 2012 and is currently being implemented. In this instance, Jamaica, together with the PA Planning Institute of Jamaica, requested a USD 9.96 million grant to boost coastline protection in order to enhance the resilience of farmers, fisherfolk, and other groups vulnerable to climate impacts.74 The proposed activities included, among others, the construction of breakwaters to help arrest coastal erosion in a resort town. However, the initiative encountered resistance from local stakeholders, who opposed the construction of breakwaters for their inadequacy and for the environmental risks involved. They arguedthat the breakwaters would not effectively address the coastal erosion and would pose substantial threats to the sustainability of the seven-mile stretch of the beach and the tourism industry. The measure, they contended, would protect only a limited portion of the bay, at the cost of undermining the natural aesthetics. Moreover, the project would necessitate trucking large amounts of big stones into the town and barging them out to the sea, which would damage the town’s shoreline and its reef while creating disturbing dust, noise, and traffic for visitors. If the project were to result in the damages feared by local stakeholders, the initiative could be regarded as potentially encroaching upon the local community’s constitutional right to a healthy environment free from the threat of damage from environmental abuse and ecological degradation under Article 13(3)(l) of the Jamaican Constitution.75 The case thus underscores the importance of incorporating stakeholders’ perspectives and considering their contexts in project design to avert unintended negative consequences that could impact fundamental rights.

74 AF, ‘Enhancing the Resilience of the Agricultural Sector and Coastal Areas to Protect Livelihoods and Improve Food Security’ (2023) Adaptation Fund, https://www.adaptation-fund.org/project/enhancing-the-resilience-of-the-agricultu ral-sector-and-coastal-areas-to-protect-livelihoods-and-improve-food-security/, accessed 4 August 2023. 75 Parliament of Jamaica, ‘Constitution of Jamaica’ (1962) Government of Jamaica, Article 13(3)(l); C. Arendse et al., ‘Civil Society Engagement Under the Adaptation Fund’ (2015) Adaptation Fund NGO Network, 11–16; A. Saunders, ‘Negril Breakwater Project Stalls’ (2016) Jamaica Observer, http://www.jamaicaobserver.com/news/Negrilbreakwater-project-stalls_63195, accessed 16 December 2020.

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3.3

Other Projects and Programs

Other GEF Trust Fund projects and programs have given rise to adverse impacts on individuals based in recipient countries. Despite not falling under the category of climate adaptation or mitigation initiatives, these projects and programs have a strong environmental component, centering on matters of biodiversity. Often, these endeavors have led to the relocation of indigenous communities, or have negatively affected the livelihoods of local populations. To provide a random example drawn from among the several projects that have had such impacts, in 1991 the GEF Council approved the Tana River National Primate Reserve Conservation Project, a project proposed by Kenya together with the World Bank. With a grant amounting to USD 6.2 million, the project was designed to develop and implement a management plan for the Tana River National Primate Reserve in order to protect two endangered primate species: the Red Colobus and the Crested Mangabey monkeys.76 Central to this project was the proposed relocation of the Pokomos, an indigenous community living in the area of the reserve. This is because they were considered a threat to the primates, even though some experts contended the Pokomos have lived with the endangered animals and peacefully shared the same territory for ages. The project faced significant resistance from these local stakeholders, most of whom refused to be relocated. Moreover, those members of this community who were relocated have still not received the promised compensation, which was intended to include the construction of schools, houses, and roads. The lack of fulfillment of these promises has left the displaced individuals in a state of both dissatisfaction and hardship. When the local stakeholders filed a civil suit at the Mombasa resident magistrate’s court against the GEF and the World Bank to claim this compensation, the entities invoked their “immunity status” granted by the Bretton Woods Agreements Act.77 This exemplifies the complexities that can arise when the Funds fail to provide accountability mechanisms 76 GEF, ‘Tana River National Primate Reserve Conservation Project’ (2020) GEF, https://www.thegef.org/project/tana-river-national-primate-reserve-conservation-project, accessed 15 December 2020. 77 W. Kabukuru, ‘Kenya: Tana Delta and the World Bank’s Monkey Business’ (2018) Earth Journalism Network, https://earthjournalism.net/stories/kenya-tana-deltaand-the-world-banks-monkey-business, accessed 2 March 2021; Environmental Justice

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to individuals who experience adverse impacts, and these are compelled to seek alternatives within national jurisdictions to address their grievances. Another notable example is the project Landscape Level Biodiversity Conservation in Nepal’s Western Terai Complex, which was approved in 2003 by the GEF Council, and has also resulted in negative impacts on indigenous communities. The GEF Trust Fund granted Nepal USD 3.31 million through the PA UNDP to enhance the management of the Royal Bardia National Park and Royal Suklaphanta Wildlife Reserve. The funding was used to integrate biodiversity conservation criteria with sustainable forest use and agricultural production.78 However, the Sonaha indigenous groups’ riverine territory has come under the jurisdiction of the first park, while their way of life and customary livelihoods—such as fishing, gold panning, and residing on river islands—have become illegal and subject to penalties. Ever since then, park guards have harassed the Sonaha community, confiscating fish, arresting members, and imposing fines. This oppressive environment has pushed most members of the indigenous community to the periphery of the park, and many have been forced into exploitative agricultural labor systems and induced seasonal labor migration. Accordingly, the Sonahas have been dismantled of their customary livelihoods and territory without any alternatives or compensation schemes. Against this backdrop, members of the Sonaha community have launched campaigns and organized nonviolent social actions such as peaceful protests, padlocking, sittings, mass demonstrations, and dialogues with the national park authorities to regain their rights.79 However, these attempts have not yielded satisfactory results thus far, underscoring the imperative for robust accountability mechanisms at the

Atlas, ‘Threats Facing the Tana River Primate Reserve, Kenya’ (2014) Environmental Justice Atlas, https://ejatlas.org/conflict/threats-facing-the-tana-river-primate-res erve-kenya?translate=en, accessed 15 December 2020. 78 GEF, ‘Landscape Level Biodiversity Conservation in Nepal’s Western Terai Complex’ (2020) GEF, https://www.thegef.org/project/landscape-level-biodiversity-conservationnepals-western-terai-complex, accessed 15 December 2020. 79 S. Jana, ‘Protecting People in Protected Areas. Recapitulating Rights Campaign

in Lowland Protected Areas of Nepal’ (2008) Community Development Organization; Environmental Justice Atlas, ‘Bardia National Park (BNP) and Sonaha Indigenous Minorities, Nepal’ (2019) Environmental Justice Atlas, https://ejatlas.org/conflict/sonaha-ind igenous-minorities-bardia-national-park-bnp-management-nepal?translate=en, accessed 15 December 2020.

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Fund level capable of addressing the grievances of local communities associated with projects or programs. Finally, the Indigenous Management of Protected Areas in the Amazon is a GEF Trust Fund project approved by the Council in 2001 that has also led to significant adverse impacts on local communities. The Fund allocated USD 10 million to the Peruvian government to support natural resource management and forest conservation in Peru’s Amazon region, one of the most biodiverse areas in the world.80 Ironically, while these endeavors were poised to be based on “participatory, decentralized, consensus and intercultural” planning incorporating “indigenous cosmovisions,” their participation was significantly constrained and was not meaningfully consulted in the project design phase. Furthermore, the legal designation of certain areas for conservation infringed upon the ancestral land rights of the Awajun, Wampis, and Shapra communities over certain territories. This has resulted in profound restrictions on their livelihoods and means of sustenance, leaving them trapped in a relentless tide of unintended consequences. Against this backdrop, indigenous representatives have issued various complaints before the local authorities, but these have been unresolved or unjustly dismissed.81 This example highlights the critical need for climate projects to consider the diverse local contexts and perspectives. Comprehensive engagement and consultation with all relevant parties could have prevented the encroachments on the rights and interests of indigenous communities. However, the project’s oversights have led to the implementation of conservation activities at the cost of these communities’ rights and well-being.

4 The Literature on the Funds’ Impacts: Pursuing Consensus on Further Reforms The nine brief case studies are only telling examples of the multiple financing decisions of the Climate Funds that have yielded adverse impacts on the rights and interests of local populations in recipient developing 80 GEF, ‘Indigenous Management of Protected Areas in the Amazon’ (2023) GEF, https://www.thegef.org/projects-operations/projects/651, accessed 3 September 2023. 81 T. Griffiths, ‘Indigenous Peoples and the Global Environment Facility (GEF). Indigenous Peoples’ Experiences of GEF-Funded Biodiversity Conservation—A Critical Study’ (2005) Forest Peoples Programme, 39–40.

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countries. These negative impacts may equally arise in both climate adaptation and mitigation projects and programs, indistinctly. On the one hand, climate mitigation projects, aimed at reducing GHG emissions, can result in environmental degradation and ultimately inflict detrimental effects on the economic sustenance and food security of local stakeholders. On the other hand, climate adaptation projects, while designed to address the challenges of changing climates, can paradoxically be damaging to the rights over lands of local stakeholders and their livelihoods. Moreover, other types of environmental projects, including those related to biodiversity, have the potential to trigger involuntary relocations or negatively affect the livelihoods of local communities. These case studies collectively underscore the need for policymakers to center more attention on the underlying causes of these ramifications and consider institutional reforms that can effectively address them. The consideration of local contexts and realities must be integrated into decision-making processes to ensure that the pursuit of climate goals does not come at the cost of jeopardizing the rights of the very communities the projects aim to benefit. In fostering a more equitable and sustainable approach to climate action, these lessons raise the call for higher Fund standards enhancing collaboration, consultation, and responsiveness to the needs and aspirations of those (potentially) impacted by these initiatives. All the Climate Funds have received criticisms in academia and policy-relevant literature. However, these critiques predominantly revolve

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around the insufficient scale of funding mobilization,82 the excessively long timelines for funding approval processes,83 the ambiguity surrounding eligible activities for funding,84 and the unbalanced geographical distribution of climate finance.85 And while certain reforms 82 See e.g., WRI, ‘Adaptation Finance Accountability Initiative’ (2020) WRI, https:// www.wri.org/our-work/project/adaptation-finance-accountability-initiative, accessed 24 September 2020; AFB (n 55), 12; See also, OECD and Climate Policy Initiative, ‘Climate Finance in 2013–14 and the US$100 Billion Goal’ (2015) OECD; W. Greene (n 43), 72; MOPAN, ‘Organisational Performance Brief. Global Environment Facility (GEF)’ (2019) MOPAN, 4; S. Nakhooda, ‘The Effectiveness of Climate Finance: A Review of the Global Environment Facility’ (2013) Overseas Development Institute; R. Clémençon, ‘What Future for the Global Environment Facility?’ (2010) Journal of Environment and Development, 50–74; TANGO International & ODI, ‘First Phase Independent Evaluation of the Adaptation Fund’ (2015) World Bank. 83 See, e.g., GEF, ‘GEF Corporate Scorecard, October 2016’ (2016) GEF; see also, Nakhooda (n 87), 18; see also, J. Werksman, ‘Consolidating Global Environmental Governance: New Lessons from the GEF?’ in N. Kanie and P. Haas (eds.) Emerging Forces in Environmental Governance (2004) United Nations University Press, 9; see also, S. Nakhooda et al. ‘Climate Finance: Is It Making a Difference? A Review of the Effectiveness of Multilateral Climate Funds (2014) Overseas Development Institute, 34–35. 84 See e.g., Ballesteros et al. (n 65), 292; GEF IEO, ‘OPS3: Progressing Toward Environmental Results. Third Overall Performance Study of the GEF’ (2005) GEF, 8; A. Möhner and R.J. Klein, ‘The Global Environment Facility: Funding for Adaptation or Adapting to Funds?’ (2007) Stockholm Environment Institute; Greene (n 43); M.J. Mace, ‘Funding for adaptation to climate change: UNFCCC and GEF developments since COP-7’ (2005) 14(3) Review of European Community and International Environmental Law, 225–246; M. Bapna and H. McGray, ‘Financing Adaptation: Opportunities for Innovation and Experimentation’ (2008) WRI Conference Paper, 2–3; M. Vieweg and I. Noble, ‘Options for Resource Allocation in the Green Climate Fund (GCF): Incentivizing Paradigm Shift Within the GCF Allocation Framework’ (2013) Kreditanstalt für Wiederaufbau; S. Harmeling et al., ‘How Can the Green Climate Fund Initiate a Paradigm Shift?’ (2013) Germanwatch; F. Mersmann and T. Wehnert, ‘Shifting Paradigms: Unpacking Transformation for Climate Action—A Guidebook for Climate Finance & Development Practitioners’ (2014) 7 Wuppertal Institute for Climate, Environment and Energy; E Co., ‘“Paradigm Shift” in GCF Project Development’ (2016) GCF Insight; L.H. Zamarioli et al., ‘Country Ownership as the Means for Paradigm Shift: The Case of the Green Climate Fund’ (2020) 12 Sustainability. 85 See e.g., R.J. Klein, Which Countries Are Particularly Vulnerable? Science Doesn’t Have the Answer! (2010) Stockholm Environment Institute; R.J. Klein, ‘Show Me the Money. Ensuring Equity, Transparency and Accountability in Adaptation Finance’ in G. Sweeney et al. (eds.), Global Corruption Report: Climate Change (2011) Earthscan, 39– 41; Amerasinghe et al. (n 52), 49; TANGO International and ODI (n 87), 54; N.C. Trujillo and S. Nakhooda, ‘The Effectiveness of Climate Finance: A Review of the Adaptation Fund’ (2013) ODI, 9; Nakhooda et al. (n 88), 11 and 37; L.H. Brown, C. Polycarp and M. Spearman, ‘Within Reach: Strengthening Country Ownership and Accountability

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of the Climate Funds have been conducted, and discussions concerning further reforms are currently underway, they primarily focus on procedural aspects of resource allocation, such as the need to enable more lending and to enhance efficient capital usage,86 rather than the underlying causes that might be leading to these negative impacts on local communities in recipient countries. Therefore, while progress is being made in some spheres, policymakers are directing insufficient attention toward a more comprehensive evaluation of the far-reaching effects of climate mitigation and adaptation initiatives on the ground. A comprehensive evaluation that is, however, pivotal in shaping reforms necessary to effectively safeguard the wellbeing and rights of the communities that depend on the successful implementation of these projects. In contrast to decision-makers’ lack of attention to these questions, concerns about the negative impacts of the Climate Funds on local communities have been raised by CSOs and academia. Some of these concerns have been centered over the fact that the Climate Funds need to be directly accountable to local stakeholders that are affected by their investments.87 Some authors have criticized the responsiveness of the accountability mechanisms of the Climate Funds

in Accessing Climate Finance’ (2013) WRI; Müller (n 49), 39; B. Müller, ‘Nairobi 2006: Trust and the Future of Adaptation Funding’ (2007) Oxford Institute for Energy Studies; Ballesteros et al. (n 65), 273; M. Stadelmann et al., ‘Equity and Cost-Effectiveness of Multilateral Adaptation Finance: Are They Friends or Foes?’ (2014) 14 International Environmental Agreements: Politics, Law and Economics, 101–120; Å. Persson and E. Remling, ‘Equity and Efficiency in Adaptation Finance: Initial Experiences of the Adaptation Fund’ (2014) 14(4) Climate Policy, 488–506; E. Remling & Å. Persson, ‘Who Is Adaptation For? Vulnerability and Adaptation Benefits in Proposals Approved by the UNFCCC Adaptation Fund’ (2015) 7(1) Climate and Development, 16–34. 86 R. Kozul-Wright, ‘A Climate Finance Goal That Works for Developing Countries’

(2023) UNCTAD, https://unctad.org/news/climate-finance-goal-works-developing-cou ntries, accessed 15 August 2023; K. Browne et al., ‘Seven Ways to Reform the Global Financial System for Climate and Sustainable Development Goals’ (2023) UNDRR, https://www.preventionweb.net/news/seven-ways-reform-global-financ ial-system-climate-and-sustainable-development-goals, accessed 15 August 2023. 87 See e.g. P. Newell, ‘Civil Society, Corporate Accountability and the Politics of Climate

Change’ (2008) 8(3) Global Environmental Politics, 122–153; See also, Ballesteros et al. (n 65), 311; See also, Schalatek (n 52), 951–973; See also, S. Chen and J.I. Uitto, ‘Accountability Delegation: Empowering Local Communities for Environmental Protection in China’ (2015) 58(3) Development, 354–365; For similar arguments in relation to the IMF, the World Bank and the WTO, see N. Woods and A. Narlikar, Governance and

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to address the potential negative environmental and social impacts of its projects.88 For instance, Athena Ballesteros et al. have criticized the AF for not having any policies to manage the potential negative environmental and social impacts associated with its projects.89 Anju Sharma has argued that, while the GEF provides a platform for local stakeholders to voice their concerns, the dedicated mechanisms are insufficient to ensure the translation of these concerns into concrete actions.90 Other authors have criticized the lack of stakeholder consultation in project planning. By way of example, Jamie Radner has denounced the fact that there has been no serious engagement with stakeholders to frame program objectives or identify new solutions to overcome barriers to low-carbon development.91 James Ford et al. have reported signs of the exclusion of local stakeholders from project planning in a review of 760 adaptation initiatives in 47 vulnerable countries in Asia and Africa.92 Others have criticized the exclusion of local stakeholders from decision-making processes related to proposals submitted to the GEF Funds, the AF, and the GCF. In relation to the GEF Funds, some authors have argued that budget allocations for facilitating local participation are too small, and in many instances, indigenous peoples are not even informed until the projects have already been approved.93 As for the AF, scholars have criticized the insufficient engagement of local stakeholders in the decision-making,94 and the inadequate allocation of resources for this purpose.95 In relation to the GCF, some authors have condemned the fact that local stakeholder participation in GCF Board sessions is limited

the Limits of Accountability: The WTO, the IMF , and the World Bank (2001) Blackwell Publishers, 569–583; Sharma (n 64). 88 See, Ballesteros et al. (n 65) 306; See also, Sharma (n 64); See also, Schalatek (n 52); See also, Amerasinghe et al. (n 52), 57. 89 Ballesteros et al. (n 65), 306. 90 Sharma (n 64), 5–6. 91 See, J. Radner, ‘Looking Ahead for Lessons in the Climate Investment Funds: Emerging Themes for Learning’ (2009) CIF Partnership Forum. 92 See, J.D. Ford et al., ‘The Status of Climate Change Adaptation in Africa and Asia’ (2015) 15 Regional Environmental Change, 811. 93 See e.g., Sharma (n 64); Nakhooda et al. (n 88), 65. 94 See e.g., Ballesteros et al. (n 65), 286; See, Amerasinghe et al. (n 52), 56. 95 See e.g., Sharma (n 64).

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to two observers, who are not offered financial support and who do not include representation from indigenous peoples.96 Finally, the literature has also criticized the inadequate transparency of the Funds toward local stakeholders. Some of these authors have denounced the lack of clarity, completeness, and consistency of the information disclosed by the Climate Funds.97 Others have criticized the limited availability of their documents for local populations in languages other than English.98 Against this backdrop, there seems to be a broad consensus among scholars on the fact that, given the negative impacts of some funding decisions of the Climate Funds on the rights and interests of local stakeholders, the institutional reforms of the Funds under consideration by policymakers should also address these issues.99 However, this consensus is not entirely coherent, as the literature attributes negative impacts to distinct deficiencies in the Funds’ standards of transparency, participation, or accountability. As a result, very different solutions have been proposed to prevent or mitigate these negative impacts. Some of the authors suggest that the Funds should be more accountable to local stakeholders by implementing more robust standards or provisions offering environmental and social safeguards to effectively manage potential impacts. Additionally, grievance mechanisms should be established at the Fund level to address the complaints of local stakeholders when these standards are violated and offer them redress.100

96 See, L. Schalatek and C. Watson, ‘The Green Climate Fund’ (2019) 11 Climate

Finance Fundamentals, 10; See, Amerasinghe et al. (n 52), 56; For a closer look at the engagement of stakeholders in the project design, see Zamarioli et al. (n 89). 97 MOPAN (n 87), 4; Amerasinghe et al. (n 52), 54; Nakhooda et al. (n 88), 33. 98 TANGO International and ODI (n 87), para. 135; Schalatek (n 52), 963. 99 The specific members of the group may vary from definition to definition, but all these authors generally refer to individuals, mostly vulnerable communities, based in the territory in which the specific project is implemented, and whose interests and concerns may result affected as a consequence. 100 See e.g., Ballesteros et al. (n 65), 312; Amerasinghe et al., (n 52), 57; Sharma (n 64), 5; For a similar assessment of these mechanisms in the World Bank see, M.T. Buntaine, ‘Accountability in Global Governance: Civil Society Claims for Environmental Performance at the World Bank’ (2015) 59 International Studies Quarterly, 99–111; See also, Woods and Narlikar (n 92); See also, A. Grigorescu, ‘The Spread of Bureaucratic Oversight Mechanisms Across Intergovernmental Organizations’ (2010) 54 (3) International Studies Quarterly, 871–886; See also, J. Gupta et al., ‘The Adaptive Capacity Wheel:

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Other authors emphasize the need of promoting stakeholder participation, as insufficient levels of engagement lead to projects that are disconnected from local realities.101 Against this backdrop, some literature calls for enhanced integration of the voices of local stakeholders in the decision-making of the Funds. It is argued that this can generate shared visions and knowledge of local conditions that can improve the quality of outcomes of funded projects and programs.102 Others stress that participation shall be promoted in order to help tailor the impacts of mitigation and adaptation projects and programs to the needs and priorities of local stakeholders.103 Finally, other authors emphasize the need to increase the transparency of the Funds.104 Some of the examined literature also argues that local

A Method to Assess the Inherent Characteristics of Institutions to Enable the Adaptive Capacity of Society’ (2010) 13 Environmental Science & Policy, 459–471. 101 See e.g., Newell (n 92), 125–126; L.C. Stringer et al., ‘Advancing Climate Compatible Development: Lessons from Southern Africa’ (2014) 14(2) Regional Environmental Change, 713–725; Müller, (n 49), 61; C. Lottje et al., ‘Engaging with the Green Climate Fund: A Civil Society Toolkit’ (2019) Germanwatch, 9; J. Fox and D. Brown, The Struggle for Accountability: The World Bank, NGOs and Grassroots Movements (1998), MIT Press. 102 Müller, (n 49), 46; Patt and Schröter (n 5); N. Adger et al., ‘Successful Adaptation to Climate Change Across Scales’ (2005) 15(2) Global Environmental Change, 77–86; J. Pinkse and A. Kolk, ‘Addressing the Climate Change-Sustainable Development Nexus: The Role of Multistakeholder Partnerships’ (2011) 51(1) Business & Society, 176–210; J. Paavola and W.N. Adger, ‘Fair Adaptation to Climate Change’ (2006) 56(4) Ecological Economics, 606; J.D. Ford and D. King, ‘A Framework for Examining Adaptation Readiness’ (2015) 20(4) Mitigation and Adaptation Strategies for Global Change, 512; Omukuti (n 5); B. Cashore et al., ‘Designing Stakeholder Learning Dialogues for Effective Global Governance’ (2019) 38(1) Policy and Society, 118–147; Nakhooda et al. (n 88). 103 Ballesteros et al. (n 65), 287–298; J. Faust, ‘Policy Experiments, Democratic Ownership and Development Assistance’ (2010) 28(5) Development Policy Review, 515–534; Sharma (n 64); J.L. Ivey et al., ‘Community Capacity for Adaptation to Climate-Induced Water Shortages: Linking Institutional Complexity and Local Actors’ (2004) 33(1) Environmental Management, 36–47; Ford and King, (n 107); H. Winkler, ‘Long-Term Mitigation Scenarios. Technical Report’ (2009) Energy Research Centre. 104 See e.g., Newell (n 92), 125–126; see also, A. Gupta, ‘Transparency Under Scrutiny: Information Disclosure in Global Environmental Governance’ (2008) Global Environmental Politics, 1–15; see also, M. Mason, ‘Transparency for Whom? Information Disclosure and Power in Global Environmental Governance’ (2008) Global Environmental Politics, 8–13; see also, E. Smythe and P.J. Smith, ‘Legitimacy, Transparency, and Information Technology: The World Trade Organization in an Era of Contentious Trade Politics’ (2006) 12 Global Governance, 31–53.

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stakeholders need to have access to timely information about climate projects and expenditures, to increase project awareness and understanding, provide continuity, and be engaged in the decision-making process.105 Some authors contend that informed stakeholders are more likely to pool resources and share information about risks and opportunities.106 Others establish that improving transparency can build adaptive capacity, so local stakeholders can have a better understanding of stressors and priorities on the ground.107 Overall, the literature presents varying perspectives on the underlying causes of the negative impacts that the Climate Funds can inflict on local stakeholders. These causes span from insufficient review mechanisms to inadequate stakeholder engagement and transparency practices within these Funds. In response to this multifaceted landscape of challenges, the

105 N. Birdsall and M. de Nevers, ‘Adaptation Finance: How to Get Out from Between a Rock and a Hard Place’ (2012) GCD Policy Papers; Transparency International, ‘Protecting Climate Finance: An Anti-Corruption Assessment of the Adaptation Fund.’ (2014) Transparency International, 2; S.C. Moser and J.A. Ekstrom, ‘A Framework to Diagnose Barriers to Climate Change Adaptation’ (2010) 17 PNAS, 22026–22031; D. Shome and S. Marx, ‘The Psychology of Climate Change Communication: A Guide for Scientists, Journalists, Educators, Political Aides and the Interested Public’ (2009) Center for Research on Environmental Decisions; S.C. Moser and L. Dilling (eds.), Creating a Climate for Change: Communicating Climate Change and Facilitating Social Change (2007) Cambridge University Press; O.A. Ogunseitan, ‘Framing Environmental Change in Africa: Cross-Scale Institutional Constraints on Progressing from Rhetoric to Action Against Vulnerability’ (2003) 13 Global Environmental Change, 101–111; S.J. O’Neill and S. Nicholson-Cole ‘“Fear Won’t Do It”: Promoting Positive Engagement with Climate Change Through Visual and Iconic Representations’ (2009) 30 Science Communication, 355–379; Schalatek (n 52); WRI (n 87). 106 See, S. Colenbrander, D. Dodman and D. Mitlin, ‘Using Climate Finance to Advance Climate Justice: The Politics and Practice of Channelling Resources to the Local Level’ (2018) 18(7) Climate Policy, 905; See also, A. Agrawal et al., ‘Local Institutions and Climate Change Adaptation’ (2008) World Bank. 107 See, Colenbrander, Dodman and Mitlin (n 111), 905; See also, J. Ayers, ‘Resolving the Adaptation Paradox: Exploring the Potential for Deliberative Adaptation PolicyMaking in Bangladesh’ (2011) 11(1) Global Environmental Politics; C. Williams et al., ‘Knowledge and Adaptive Capacity’ (2015) 5 Nature Climate Change, 82–83; For the benefits that local knowledge can have on guiding adaptation planning and investments, see, D. Archer et al., ‘Moving Towards Inclusive Urban Adaptation: Approaches to Integrating Community-Based Adaptation to Climate Change at City and National Scale’ (2014) 6(4) Climate and Development, 345–356; See also, A. Fenton et al., ‘UpScaling Finance for Community-Based Adaptation’ (2014) 6(4) Climate and Development, 388–397.

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literature offers a wide spectrum of solutions that range from heightened accountability to enhance consultation processes and information disclosure. The lack of consensus on the root causes of negative impacts and the appropriate solutions poses a challenge to the implementation of adequate and meaningful reforms within the Climate Funds. It hinders the ability of policymakers, practitioners, and stakeholders to identify the most pressing issues and the most effective strategies to address them. This can result in fragmented efforts that may not effectively tackle the core problems, that may have limited impact, or that are inadequate. Moreover, despite the varied insights provided by the literature, it is not entirely clear when accountability mechanisms, stakeholder engagement, or transparency of the Climate Funds, can be considered inadequate, and how they may affect local stakeholders’ rights and interests. The standards of participation, transparency, and accountability are complex and present different dimensions that the literature does not clearly define. For instance, it remains unclear which stakeholders should have the right to participate in project design and decision-making, and how influential and meaningful their input should be. Moreover, concerning transparency, while the literature criticizes the clarity, consistency, and sufficiency of disclosed information, it is uncertain when information is considered clear and consistent, or how much information is deemed sufficient. Finally, the literature calls for accountability mechanisms, but it is unsettled what type of remedies these mechanisms should adopt, whether their decisions should be binding, or who should have the right to have funding decisions reviewed. The complexity of these standards and of the relationship between them and the negative impacts on individuals demands a deeper examination to unravel the specific underlying causes leading to negative impacts on the lives and well-being of those they intend to benefit. Additionally, understanding the intricate interplay between these factors and their combined influence on local stakeholders’ rights and interests is essential for devising effective and holistic solutions. However, while several authors have discussed this topic, there is no comprehensive and comparative analysis of all potential sources of the negative impacts in relation to all the Funds. Instead, criticisms focus only on particular elements of specific Funds separately.

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The complex relationship between insufficient review mechanisms, limited stakeholder participation, and inadequate transparency mechanisms can create a cascade of challenges that hinder an adequate implementation of climate projects. Indeed, when local voices are excluded from decision-making processes, projects run the risk of being misaligned with the unique contexts and aspirations. But when this is combined with insufficient transparency and weak review processes, taking informed decisions and scrutinizing fund allocations and project implementations becomes prohibitive. A combination of opacity, exclusion, and insufficient remedies can perpetuate mistrust and alienation, exacerbating the adverse effects of climate projects on local rights and interests, and impeding to hold decision-makers accountable for the consequences of their choices. Against the backdrop of the dramatic impacts that the Climate Funds can inflict on the rights and interests of local stakeholders, as exemplified in the nine case studies presented, it is necessary to clearly define how not only accountability, participation, and transparency, but also the combination of the three, interfere with these impacts. Only through a comprehensive exploration of these standards, and in relation to all five Climate Funds, can it then be suggested pertinent and actionable recommendations to ensure that climate projects genuinely empower and benefit the communities they aim to support.

5

Final Remarks

The chapter has introduced the main instruments through which SDG 13 is being operationalized, their impacts on local stakeholders, and the literature analyzing the root causes of these impacts. As climate finance flows into developing countries to support crucial initiatives, the chapter has reflected on how it is the local populations who ultimately bear the consequences, both positive and negative, of these projects. Against this backdrop, it is essential that financial resources are directed toward projects and programs that align with local realities, and that offer a nuanced understanding of the unique challenges, priorities, and socioeconomic and environmental contexts of individuals based in recipient countries. By tailoring climate projects to these specific conditions, and engaging local stakeholders in the design and implementation projects, the potential for positive outcomes is maximized.

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However, from an examination of nine case studies, the chapter has revealed how the lack of rigorous review mechanisms, and insufficient stakeholder involvement and transparency in the Climate Funds, is leading to unintended consequences for the very communities these initiatives aim to uplift. Discussions about these issues have taken place, but predominantly within the realms of CSOs and academia, rather than policymakers. Furthermore, the varied perspectives within the literature on the underlying causes of the negative impacts, and the absence of holistic solutions, hinder the ability to suggest relevant recommendations for preventing or addressing these negative consequences. This raises a number of important questions. How do accountability, participation, and transparency interfere with the rights and interests of local stakeholders? Are local communities meaningfully participating in the design and implementation of climate projects and programs? If so, are transparency mechanisms sufficient so as to enable stakeholders to take informed decisions and scrutinize project implementation? When projects lack sufficient consultation or information disclosure, do stakeholders have access to accountability mechanisms for reviewing project decisions? Can these mechanisms, along with participatory and transparent approaches, mitigate projects’ negative impacts? If so, how? As the impacts of climate change continue to unfold, the urgency of addressing these questions and concerns becomes increasingly evident. SDG 13 holds the potential to catalyze transformative change and protect the most vulnerable populations. However, this potential can only be realized through a concerted effort to acknowledge local realities. In the pursuit of the necessary reforms for achieving this, the next three chapters of this book will delve into these pressing questions, shedding light on the intricate dynamics between the Climate Funds and the individuals they impact. The chapters will offer an in-depth and comparative examination of the extent to which the Climate Funds adequately promote the three standards (participation, transparency, and accountability) in relation to which they have been criticized by the literature for contributing to the adverse impacts experienced by local stakeholders.

CHAPTER 3

Participation in the Climate Funds

1

Introduction

The first set of criticisms that academia has directed at the Climate Funds in relation to their adverse impacts on the rights and interests of local stakeholders is related to the latter’s participation in these Funds. The literature review in Chapter 2 reflects that some scholars link the negative impacts of climate projects to inadequate stakeholder involvement in the project design and decision-making processes. The conflicts and repercussions of the nine case studies exemplified in the previous chapter also indicate that projects might on occasion be designed without making meaningful consultations with affected individuals and be implemented despite widespread opposition. Indeed, had local stakeholders been actively engaged during project design and decisionmaking processes, projects could have been better aligned with local realities, potentially averting many of the conflicts and rights infringements that occurred in the examined cases. The lack of adequate consultation and engagement might have therefore contributed, either directly or indirectly and to varying degrees, to the detriment of the livelihoods, food security, and displacement of local communities. While the literature has criticized shortcomings in stakeholder participation, it remains unclear when such participation may be considered inadequate, and how it might result in detrimental effects on the rights

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 G. Larrea, Climate Funds and Sustainable Development, Sustainable Development Goals Series, https://doi.org/10.1007/978-3-031-50218-7_3

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and interests of individuals. Is it reasonable to assert that participation is inadequate if not all stakeholders are involved in the decision-making process? Expecting the participation of every affected individual within a community may be impractical and unrealistic. Under which circumstances and how should their input be sought? Moreover, the case studies also reveal that, on many occasions, local populations are divided in their views. Is participation considered inadequate when some positions are not adequately represented? What consideration should each participant be given? Additionally, a noticeable gap persists within the existing literature— the absence of a comprehensive and in-depth comparison of participation policies across all the Climate Funds. This gap hinders the ability to identify good (and less good) practices, and subsequently recommend refined and accurate reforms for these Funds. This chapter will delve deeper into the concept of participation within global entities, as delineated by the literature, and dissect crucial elements such as the range of people who should enjoy a right to participate in a global regulatory process, or the influence that participants should have in the decision-making. Building upon insights gained from this literature review, these concepts will be then applied to the specific domain of climate finance, in order to establish the benchmark that the policies of the Climate Funds should meet to be considered promoting stakeholder participation at an adequate level. Finally, the chapter will offer a comprehensive critical and comparative analysis of the Climate Funds’ policies on all the dimensions of participation, spanning from the range of participation to the influence of individuals in the design and decision-making of climate projects and programs. This analysis will provide unprecedented insights into the extent to which the existing policies of the Climate Funds might have detrimental effects on local stakeholders.

2 Content and Scope of Participation in Climate Finance Participatory rights come from domestic settings that confer upon affected individuals a right to have their views and relevant information considered prior to the adoption of a decision. Participation constitutes one of the classical elements of administrative law and a supreme

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goal of the administrative process and is increasingly applied in global governance.1 Various authors have analyzed the concept of participation in the context of global governance, and there is wide agreement on the fact that it consists in the ability or entitlement of individuals to take part in global procedures—such as law-making and regulation, adjudication, or dispute settlement—by offering their insights or commenting before decisions are adopted.2 Some scholars differentiate between two basic dimensions of participation in global institutions: decisional and non-decisional. Decisional participation confers the right to vote on a decision or exercise a role in the adoption of a decision. It is usually limited to representatives of Member States of the global entity, although global regulatory bodies increasingly allow a broader range of stakeholders that take part of their decision-making processes. Conversely, non-decisional participation implies that the participant has no role in the actual adoption of a decision, but is allowed to make submissions or express views. This category also typically involves outsiders—such as representatives of other organizations, business firms, non-governmental organizations (NGOs), and expert groups—that may be consulted or invited to provide arguments or attend meetings where decisions are discussed and adopted.3 1 B. Kingsbury, N. Krisch and R. Stewart, ‘The Emergence of Global Administrative Law’ (2005) 68 Law & Contemporary Problems; R. Stewart, ‘U.S. Administrative Law: A Model for Global Administrative Law’ (2005) 68 Law & Contemporary Problems. 2 See e.g., S. Cassese, ‘A Global Due Process of Law?’ in G. Anthony, J.-B. Auby, J. Morison and T. Zwart, Values in Global Administrative Law (2011) Hart Publishing, 49; Benedict Kingsbury, Nico Krisch and Richard Stewart have defined procedural participation in global governance as “the right of affected individuals to have their views and relevant information considered before a decision is taken”. According to these scholars, it is one of the classical elements of administrative law and a supreme goal of the administrative process, and is increasingly applied in global governance. See, Kingsbury, Krisch and Stewart (n 113); For an illustration of the application of this standard in international finance, see Financial Action Task Force, ‘Review to Identify Non-Cooperative Countries or Territories: Increasing the Worldwide Effectiveness of Anti-Money Laundering Measures’ (2000) OECD. 3 R. Stewart, ‘Remedying Disregard in Global Regulatory Governance: Accountability,

Participation and Responsiveness’ (2014) 108(2) The American Journal of International Law; Other authors refer to these types of participation differently, but they equally consist of non-decisional consultations and direct participation in decision-making. See, e.g., K.W. Abbott and D. Gartner, ‘Reimagining Participation in International Institutions’ (2012) 8 Journal of International Law and International Relations, 1–35.

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In light of this literature, participation in the context of international climate finance can be defined as the engagement of local stakeholders in the resource allocation process of the Climate Funds—both during the project design and the decision-making undertaken by their Councils and Boards. Decisional participation in the realm of climate finance pertains to the exercise of an active role by stakeholders in the process of formally approving proposals in Board and Council meetings. In contrast, nondecisional participation involves consultation and notice-and-comment procedures during the process of project design. Consultation entails meetings facilitating information exchange and dialogue between the government and the PAs and stakeholders, who may thus be informed about and give their opinions, or raise concerns over, climate projects or programs.4 Notice-and-comment relates to procedures through which a project or program proposal is published somewhere accessible to all stakeholders and is open to comment by them. Public participation is a principle underpinning the practice of international climate governance, recognized in Article 6(a)(iii) of the UNFCCC Convention, which requires Member States to facilitate “[p]ublic participation in addressing climate change.” In other multilateral environmental agreements—such as the Agenda 21, the Rio Declaration on Environment and Development, and the Aarhus Convention—stakeholder participation in the decision-making of environmental issues is recognized as a right and a means to ensure transparency, integrity, good governance, and sustainable development, and to prevent human rights violations.5 Yet, what is the range of people who should enjoy a right to participate in a global regulatory process? Scholars frequently refer to “affected individuals,” implying that anyone potentially affected by a global decision has the right to participate in the decision-making process to ensure their views and perspectives are considered before the decision is adopted.6 4 GEF, ‘Guidelines for the Implementation of the Public Involvement Policy’ (2014) GEF/C.47/Inf.06, para. 12. 5 UN, ‘United Nations Conference on Environment and Development. Agenda 21’ (1992) UN, paras. 1.3, 3.2 and 3.7.d; Rio Declaration, principle 10; UN, ‘Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters’ (1998) 2161 UNTS 447, preamble and arts. 1, 3 and 6.2.ii. 6 Kingsbury, Krisch and Stewart (n 113) 37; J. Steffek and P. Nanz, ‘Emergent Patterns of Civil Society Participation in Global and European Governance’ in J. Steffek, C. Kissling and P. Nanz (eds.) Civil Society Participation in European and Global Governance. A Cure for its Democratic Deficit? (2008) Palgrave Macmillan, 10.

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Is this the case? How can it be anticipated who might be affected by a decision, and be granted a right to participate? The answers to these inquiries vary depending on whether the type of participation is decisional or non-decisional. Decisional participation is often limited to the members of the body and its principal officials—in this case the members of the Boards or Councils. This is because it may be impractical or dysfunctional to accord “strong” forms of participation in the decision-making process—such as voting rights—to all those affected by a decision.7 Nevertheless, this does not necessarily preclude local stakeholders from retaining other types of active or decisional roles in decision-making besides voting on proposals. For instance, representatives of stakeholders may be entitled to provide input into the deliberations of Boards or Councils, without enjoying a vote or veto in relation to the decisions they adopt.8 Therefore, while it may be impractical for all affected stakeholders to be offered decisional participation in the form of a vote, they may be entitled to participate in the decision-making through their representatives. Where representatives of stakeholders do participate in the resource allocation process by offering their input, the relevant decision-making organ should ensure balanced and fair representation of all “affected individuals.” Accordingly, decisional participation should benefit from the participation of those who are capable of representing all groups potentially affected by the putative decision. These representatives may be appointed by an NGO or another entity speaking for local stakeholders or chosen through electoral systems.9 In contrast, non-decisional participation can potentially contribute to achieving more comprehensive and robust inclusion of all affected individuals. This is because this type of participation can be offered to all (potentially) affected local stakeholders in order to enable them to express

7 Stewart (n 115), 235; For the differences of participatory power and domination

of global decision-making, see N. Krisch, ‘The Pluralism of Global Administrative Law’ (2006) 17(1) The European Journal of International Law. 8 E. Belfer et al. ‘Pursuing an Indigenous Platform: Exploring Opportunities and Constraints for Indigenous Participation in the UNFCCC (2019) 19(1) Global Environmental Politics, 12–33; Stewart (n 113), 67 and 69; Stewart (n 115), 236–237. 9 Ibid.

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their views and provide input on the project or program at the design stage.10 In relation to consultations, while in the main all individuals could potentially be consulted, participating local stakeholders will still need to be selected (or accepted in the case that these procedures are self-selecting, on the basis that those who consider themselves to be potentially affected can participate) by project proponents, i.e., applicant countries and the PAs designing the project. This process of selecting participants raises the dilemma of who should be entitled to participate and who should be excluded. This may be controversial as perceptions of who or what may be at risk as a result of a particular project may vary.11 The impacts of a project can be difficult to predict, and there is a danger that some of the actors who are not selected for participation may end up being affected. Moreover, the process of selecting participating stakeholders may also sometimes entail the purposeful exclusion of affected stakeholders where it is feared that they may otherwise hinder the approval of a project.12 In order to secure fair and balanced participation, the Funds should scrutinize proposals on stakeholder identification and participation to assess whether all affected local communities and indigenous peoples have been involved in the project design.13 Another possibility could be that those local stakeholders who consider they are affected can submit substantiated concerns to the Secretariats of the Funds to contest their exclusion.14 10 N. Krisch and B. Kingsbury, ‘Introduction: Global Governance and Global Administrative Law in the International Legal Order’ (2006) 17(1) The European Journal of International Law, 5–6; Stewart (n 115); E. Meidinger, ‘The Administrative Law of Global Private–Public Regulation: The Case of Forestry’ (2006) 17(1) The European Journal of International Law, 47–87. 11 Patt and Schröter (n 5), 458–467; Omukuti (n 5), 33–34. 12 Some claim that vaguely defining participant stakeholders can be manipulated to

intentionally include or exclude some groups. See for example, G. Aiken, ‘Common Sense Community? The Climate Challenge Fund’s Official and Tacit Community Construction’ (2014) 130(3) Scottish Geographical Journal, 207–221; A. Titz, T. Cannon and F. Krüger, ‘Uncovering “Community”: Challenging an Elusive Concept in Development and Disaster Related Work’ (2018) 8(71) Societies, 71; This can be the norm in many recipient countries in which autocratic governments pose severe limitations to citizen participation in national and local decision-making processes. Schalatek (n 52), 952. 13 Schalatek, (n 52), 963–964. 14 This is a procedure that can be found in EU Law. E.g., for a discussion in relation

to timber and the faculty of third parties to raise substantiated concerns about operator’s

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As for notice-and-comment processes, the main difference is that project proponents are not the ones who select those who may participate and in relation to which aspects. Conversely, those who perceive themselves as potentially affected can come forward themselves, and in relation to any aspect of the project or program. In keeping with this, the Funds should offer platforms to allow local stakeholders to submit comments and give feedback on funding proposals before they are approved by the decision-making organs of the Funds. These processes should be able to engage all affected individuals, including indigenous peoples, and offer sufficiently large time periods for stakeholders to assess the proposal and comment on it.15 In relation to the influence that local stakeholders should wield through their participation, the literature generally asserts that individuals have a right to have their voices, views, and relevant information considered in those decisions that affect them.16 Yet, it is unclear to what degree the voices of individuals should be “considered.” Which factors should be used in order to ensure that stakeholders’ voices are considered when adopting funding decisions? As far as non-decisional participation is concerned, some scholars contend that the inputs of individuals may be received, acknowledged, and used by the Funds for modifying or endorsing the project. However, the extent to which these inputs should actually be taken into account to influence project design in general is uncertain.17 Some authors contend that these processes should offer thorough and systematic consultation or notice-and-comment processes through which local stakeholders may be able to offer input on all relevant aspects of the project design.18 This should not be tokenistic or consist simply of polls that restrict answers to compliance with timber regulation, see, D. Brack and S. Ozinga, ‘Enforcing Due Diligence Legislation “Plus”’ (2020) Fern. 15 Stewart (n 113); Stewart (n 115), 241; J. Grimm, L. Weischer and D. Eckstein, ‘The Future Role of the Adaptation Fund in the International Climate Finance Architecture’ (2018) Germanwatch, 35; D.C. Esty, ‘Good Governance at the Super-national Scale: Globalizing Administrative Law’ (2006) 115 Yale Law Journal, 1527–1528. 16 See e.g., Kingsbury, Krisch and Stewart (n 113) 37; Stewart (n 115), 241. 17 Stewart states that these inputs “may” influence and be used by global bodies in

their decisions. See, Stewart (n 115) 262. 18 Schalatek (n 52); Ford and King (n 107); Moser and Ekstrom (n 110); Y. Dong and K.H. Olsen, ‘Stakeholder Participation in CDM and New Climate Mitigation Mechanisms: China CDM Case Study’ (2015) 17(2) Climate Policy, 171–188.

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choosing between predetermined sets of options. The literature suggests that meaningful participation should involve effective communication, in the sense of a dialogue that engages local stakeholders in the resource allocation process and facilitates the expression of their interests and concerns, so that these can be taken into account.19 Moreover, influence may also be enhanced through procedural guarantees ensuring that consultations have involved such effective communication and that stakeholders have expressed their interests and concerns. In this regard, there might be an overlap between participation and transparency, in that requiring the disclosure of documentation reflecting reasons behind project design-related decisions could provide evidence of the consideration of those voices and views of local stakeholders. This is because, when reasons are given, the aspects concerning if and how participatory inputs have been taken into account in a project or program can be evaluated. As for decisional participation, global regulatory bodies are usually dominated by internal members of the organization in question, and it is they who hold the most significant decisional power.20 The role of local stakeholders’ representatives typically consists of contributing input to the decision-making process, without a formal role in the exercise of final authority.21 Against this backdrop, decisional participation should offer representatives of local stakeholders the opportunity to provide input with regard to any aspect of the proposal under consideration at Board or Council meetings in order that representatives’ voices and views may be considered 19 See, K. Ervine, ‘Participation Denied: The Global Environment Facility, Its Universal Blueprint, and the Mexico-Mesoamerican Biological Corridor in Chiapas’ (2010) 31(5) Third World Quarterly, 773–790; See also, Ford and King (n 107), 512; Moser and Ekstrom (n 110) 22026–22031. 20 Stewart (n 115), 237–239. 21 According to Stewart, representatives generally have very limited influence through

these forms of participation because granting more decisional power to local stakeholders threatens contestation and conflict. See, Ibid.; L. Casini, ‘“Down the Rabbit Hole”: The Projection of the Public-Private Distinction Beyond the State’ (2013) 8 NYU Jean Monnet Working Paper; E. Cavalieri, ‘The Role of Advisory Bodies in the World Heritage Convention’ in S. Cassese et al. (eds.) Global Administrative Law: The Casebook (2012) 3 IRPA; C. Dany, ‘Civil Society Participation under Most Favourable Conditions: Assessing the Deliberative Quality of the WSIS’ in J. Steffek, C. Kissling and P. Nanz (eds.) Civil Society Participation in European and Global Governance. A Cure for its Democratic Deficit? (2008) Palgrave Macmillan, 53–70.

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prior to the adoption of a funding decision.22 In keeping with this, representatives should be entitled to make as many observations, criticisms, and comments as they deem necessary to raise the interests and concerns of local stakeholders, relating to any aspect of the project proposal, prior to the deliberation by the Board and Council members. In this regard, disclosing reasons underpinning decisions in relation to those comments raised by representatives would also help reflect on whether these last have been effectively involved and their interests and concerns expressed. Finally, some scholars contend that the ability of local stakeholders to influence decision-making hinges on their ability to master the issues under discussion, together with their experience and resources. Richard Stewart has problematized the objective of securing effective representation of all interests in global governance, especially those interests that are not strongly organized or which do not form part of the mandate of established, adequately resourced, and effective institutions.23 Often, local populations are situated in remote and isolated areas, far from where decision-making is held and isolated from other affected communities. This reality hinders their ability to be collectively organized and to travel and attend meetings. Securing effective participation requires a high degree of knowledge and technical capacity, and resources to participate fully and effectively, on a regular basis. In this regard, insufficient resources to gather or understand all elements of a proposal and to channel information by traveling to and participating in distant fora diminishes the ability of local stakeholders to reach out and actively engage.24 To prevent this, the Funds should offer financial resources that can facilitate effective and continuing participation, such as those for covering travel expenses, document translation, or the organization of meetings to elicit information about project proposals.25

22 Stewart suggests that deliberative approaches to global decision-making focus on ensuring that the voices and views of individuals are considered in accordance with the quod omnes principle. See, Stewart (n 115), 241–242. 23 Ibid., 240–241; Stewart (n 113), 86–87. 24 Sharma (n 64), 5; Stewart (n 113), 86–87; Steffek and Nanz (n 118), 12. 25 Sharma (n 64), 5–6.

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3

Participation in the Climate Funds

After defining the content and scope of the standard of participation within global institutions and its application to the Climate Funds, it becomes evident that this standard encompasses at least three dimensions: (1) the range of people who may enjoy a right to participate in global decision-making processes; (2) the consideration that these participants should be given; and (3) the resources that they may be offered in order to engage in project design and decision-making. The chapter will now closely examine the policies of the Climate Funds on each of these dimensions, with a view to identifying whether and to what extent they might be negatively impacting local populations. Regarding the range of participation, the section will delve into who enjoys a right to participate under the policies of each Fund. How do the policies define local stakeholders? Do they regulate notice-and-comment processes at the stage of project design? Do decision-making organs offer the possibility for local populations to participate in their meetings? How are participating local stakeholders selected? As for the influence of participants, the section will examine when stakeholders may engage in project design and decision-making, and how their input shall be taken into account. What do policies say about what consultations should consist of, and when and how they should take place? Can representatives of local stakeholders offer their input on any relevant aspect of the proposal prior to the deliberations of the Board and Council members? Finally, the section will explore the provision of resources required to facilitate effective participation within each Fund. Do local stakeholders have access to funding to cover participation-related costs? How can local stakeholders manage the expenses associated with traveling to the locations where the Councils and Boards of the Funds deliberate on the approval of projects and programs? In order to answer all these questions, the analysis will proceed on a Fund-by-Fund basis. The section will first focus on the range of participation of local stakeholders, the influence of their participation, and the resources that these are granted to participate effectively in the resource allocation process of the GEF Funds (i.e., the GEF Trust Fund, the LDCF, and the SCCF). In keeping with this, a distinction will be drawn

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between non-decisional and decisional participation, and between noticeand-comment and consultation in relation to the former. Subsequently, the same analysis will be applied to the AF, and ultimately to the GCF. 3.1

The GEF Funds

3.1.1 Range of Participation The Policy on Public Involvement in GEF Projects —which applies to the GEF Trust Fund, the LDCF, and the SCCF—refers to “stakeholders” as those who have a right to participate in the resource allocation process of the GEF Funds26 and defines these as those “individuals, groups, or institutions which have an interest or ‘stake’ in the outcome of a GEF-financed project or are potentially affected by it.” This includes “recipient country government[s]; project executing agencies; groups contracted to carry out project activities and/or consulted at various stages of the project; project beneficiaries; groups of people who may be affected by project activities; and other groups in the civil society which may have an interest in the project.”27 So for the GEF Funds, local stakeholders include those that “have an interest” or that are “potentially affected” by a project or program. However, their policies do not directly define these terms. These actors shall be granted both decisional and non-decisional participation opportunities. In relation to non-decisional participation, the policies make no reference to notice-and-comment procedures. Nondecisional participation is centered on consultations in relation to project design. The role of public consultations in GEF Funds projects and programs was initially made explicit in the GEF Instrument in relation to “major groups and local communities,”28 but the regulation of “stakeholder” consultation in the development of funding proposals came with the adoption of the 1996 Policy on Public Involvement in GEF Projects, last updated in 2012.29 In 2011, the GEF Policy on Agency Minimum

26 GEF Council, ‘GEF Policy on Public Involvement in GEF Projects’ (2012) GEF SD/PL/01, para. 6. 27 Ibid., 4–5. 28 GEF Instrument, para. 5. 29 See, GEF Council (n 138), paras. 2 and 6.

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Standards on Environmental and Social Safeguards 30 further adopted a standard of free, prior and informed consent (FPIC) for all affected indigenous peoples. Through this FPIC policy, indigenous peoples are offered a differentiated non-decisional participatory role in the project or program design, as they shall be offered consultation opportunities and reach an agreement on the proposal with project proponents.31 Considerations on the influence of FPIC are offered below. For the selection of stakeholders to be consulted, the Policy on Public Involvement in GEF Projects explicitly establishes some procedural aspects, according to which the responsibility for selecting stakeholders and ensuring stakeholder consultation on project design rests within the applicant country with the support of GEF PAs.32 These should design “broad-based and project-specific consultations” “in a manner that is representative of a broad range of stakeholder groups.”33 The policy document Enhancing the Engagement of Civil Society Organizations in Operations of the GEF 34 and the GEF Policy on Public Involvement in GEF Projects 35 for consultations in general, and GEF Policy on Agency Minimum Standards on Environmental and Social Safeguards 36 for FPIC of indigenous peoples, oblige PAs to identify and present evidence of the consultation of all affected stakeholders during the project proposals through a Stakeholder Engagement Plan. Subsequently, the

30 GEF, ‘GEF Policy on Agency Minimum Standards on Environmental and Social Safeguards’ (2011) GEF/C.41/10/Rev, Appendix A, paras. 7, 20 and 57. 31 The policy embraces the standard from the International Labor Organization and the UN Declaration on the Rights of Indigenous Peoples for projects for which it is required by virtue of the state’s ratification of these treaties. At the time of writing, this pertains to virtually all countries: the former has 187 Member States, whereas the latter has been endorsed by 150 countries. For projects in other countries, the PAs must rely on their own consultation processes, which shall receive broad community support, and ensure the full and effective participation of affected indigenous peoples. See, Ibid., paras. 23 and 24 and Annex II, paras. 6 and 7. 32 See, GEF Council (n 138), paras. 2 and 6. 33 Ibid., para. 8. 34 GEF Council, ‘Enhancing the Engagement of Civil Society Organizations in the Operation of the GEF’ (2010) GEF/C.39/10, 5, para. 19. 35 GEF Council (n 138), paras. 9ff. 36 GEF (n 142), para. 23.

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GEF Secretariat is required to study whether affected local stakeholders have appropriately participated in the project design.37 As for decisional participation, the GEF Trust Fund was the first Climate Fund to formally engage individuals in its decision-making.38 The Rules of Procedure for the GEF Council 39 and the document Enhancing the Engagement of Civil Society Organizations in Operations of the GEF outline the terms of participation for stakeholders as observers in those Council meetings that are not deemed to be closed—further studied below in relation to the influence of decisional participation. These observers may be representatives of well-established NGOs and CSOs whose work is aligned with the GEF’s mission and have experience in a technical or geographical area, as well as a track record of involvement in projects or projects similar to those funded by the GEF Funds. They should also have established relationships or partnerships with other Networks of CSOs.40 These representatives will represent two groups of CSOs—regional and local.41 Two months prior to Council meetings, the Secretariat circulates a call for applications to CSOs that satisfy these criteria and that are registered at the GEF. Then, among those stating an interest in participating in the GEF Council, it can select up to ten CSOs in consultation with the GEF CSO Network, the recipient countries, the Indigenous Peoples Advisory Group, and the GEF Small Grants Program. Rotation of CSO representation balancing the needs of inclusion will be taken into account when making the selection, aiming at fostering balanced engagement by local and national-level CSOs and Indigenous Peoples groups.42

37 GEF, ‘Program Manager’s Review Checklist for Project Proposal Documentation’

(2013) GEF; GEF Council (n 138), para. 10. 38 Nakhooda (n 87), 15; It must be noted that these policies also apply to the other GEF Funds. 39 GEF, ‘Rules of Procedure for the GEF Council’ (2007) GEF, 17ff. 40 GEF, ‘Approved Selection Criteria for Representatives of Civil Society and Indige-

nous Peoples and Local Communities to Participate in GEF Council Meetings’ (2018) GEF, paras. 2–7; GEF Council (n 146), para. 4. 41 GEF Council, ‘Updated vision to enhance civil society engagement with the GEF’ (2017) GEF/C.53/10/Rev.01, para. 47. 42 GEF (n 152), paras. 2–7.

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3.1.2 Influence of Participants Regarding the influence of non-decisional participation, the GEF’s FPIC policies grant significant participatory power to indigenous peoples. According to the GEF Policy on Agency Minimum Standards on Environmental and Social Safeguards, proposals shall be the result of a ‘mutually accepted’ consultation process between proponents and affected indigenous peoples, requiring an agreement between these parties. However, there is no further information as to what ‘mutually accepted’ means. In relation to this, the policy only adds that FPIC “does not necessarily require unanimity, and may be achieved even when individuals or groups within a community explicitly disagree.”43 Accordingly, FPIC under the GEF policies does not grant indigenous communities veto power over proposals. Conversely, it consists of consultations in which project proponents and indigenous communities shall reach an agreement. However, the scope of the acceptance and the majority that would be necessary on the side of indigenous peoples to reach that agreement remain undefined. As for consultations, the GEF Policy on Public Involvement in GEF Projects establishes that they should be promoted at the earliest phase of project identification and throughout the process of project design.44 They should be organized in a flexible manner, according to local conditions and to project-specific requirements45 “so that they contribute to the environmental, financial and social sustainability of projects,” including “the socio-economic needs of affected people, the special needs of vulnerable populations and access to project benefits.”46 In keeping with this, the policy document Enhancing the Engagement of Civil Society Organizations in Operations of the GEF 47 encourages allowing stakeholders to propose project ideas and provide guidance to project proponents by identifying which ones are most appropriate.48 In order to oversee this and ensure the influence of participants, the policy establishes a procedural obligation for proponents to document the consultations made during the project formulation through a brief 43 GEF (n 142), para. 23. 44 Ibid., para. 6. 45 Ibid., para. 7. 46 GEF Council (n 138), para. 5. 47 GEF Council (n 146). 48 Ibid., para. 19.

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stakeholder engagement plan.49 The same happens in relation to the FPIC of indigenous communities and the related consultations, which shall be documented together with evidence of consent by proponents in the proposal.50 The Guidelines for the Implementation of the Public Involvement Policy further establish that this documentation shall include summary reports of stakeholder consultations describing “how they all are consulted with and engaged in the project.”51 The nature of these consultations will subsequently be evaluated by the Secretariat.52 However, the policies do not stipulate the minimum content that should be included in the summary reports of stakeholder consultations, nor do they define how thorough the evaluation of the Secretariat should be, or the standards against which it should be conducted. As for the influence of decisional participation, of the ten observers allowed to attend Council meetings, five are invited to participate directly in the actual meeting and five can only observe it. In relation to the latter, the GEF policy documents are unforthcoming as to if and when observers can intervene during the meetings. The Rules of Procedure only mention that “a representative shall be permitted to observe the council proceedings from a viewing room.”53 In practice, they can only watch the discussion on the closed-circuit TV, and cannot intervene in it. This implies that they do not effectively participate in the decision-making process, strictly speaking.54 As for those five participating in council meetings, they have a right to speak and make interventions. However, they are only allowed to do so once the Council has concluded its discussion on a specific agenda item, and are not permitted to contribute further to the decision-making.55 Accordingly, while this type of observer does participate in the decisionmaking, it is unclear to what extent their comments and recommendations

49 Ibid. 50 GEF (n 142), para. 23. 51 GEF (n 116), paras. 37 and 41(a). 52 GEF (n 142), paras. 9 and 10. 53 GEF (n 151), para. 2(o). 54 M. Hager, ‘A Guide to the Global Environment Facility for NGOs’ (2005) UNEP,

113. 55 GEF Council, ‘Policy on Environmental and Social Safeguards’ (2018) GEF SD/ PL/03, para. 65.

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are considered in the ultimate adoption of decisions on the funding applications. 3.1.3 Resources Required to Participate Effectively Finally, in 2010, the GEF established the Country Support Program (CSP) to provide developing countries “with assistance and capacity building to fully participate in the GEF partnership.”56 In keeping with this, the CSP offers several tools, including National Portfolio Formulation Exercises (NPFE).57 These are a priority, setting down tools through which developing countries coordinate ministries and local stakeholders to establish how they would like to program available funds.58 The GEF offers access to up to USD 30,000 to help countries engage local stakeholders to undertake NPFEs.59 According to the last data available, during the GEF-5 and GEF-6 replenishments, USD 5.4 million has been spent on NPFE activities.60 Moreover, the GEF also covers the travel costs for local stakeholder representatives from developing countries to participate in the GEF Committee meetings.61 The support for NGOs to travel to GEF Council meetings has been increased,—USD 280,000 to support NGOs in Council and inter-sessional meetings and USD 50,000 to support Regional Focal Points in regional meetings.62 Other CSOs whose work is relevant to the GEF can attend the meetings as self-sponsored participants.63

56 GEF, ‘Country Support Program’ (2020) GEF, https://www.thegef.org/topics/cou ntry-support-program, accessed 22 September 2020. 57 See GEF, ‘Reforming the Country Support Program and Procedures for Implementation’ (2010) GEF/C.38/07/Rev.2. 58 See, GEF, ‘GEF National Portfolio Formulation Exercise (NPFE)’ (2010) GEF,

https://www.thegef.org/news/gef-national-portfolio-formulation-exercise-npfe, 22 September 2020.

accessed

59 Nakhooda (n 87), 32. 60 GEF IEO, ‘GEF Country Support Program’ (2023) GEF, 67. 61 Transparency International, ‘A Tale of Four Funds. Best Practices of Multilateral

Trust Funds in Safe-Guarding Climate Finance from Corruption and Waste’ (2017) Transparency International, 19. 62 Sharma (n 64) 18–20; GEF, ‘Enhancing Civil Society Engagement and Partnership with the GEF’ (2008) GEF/C.34/9. 63 GEF (n 152), para. 2.

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3.2

PARTICIPATION IN THE CLIMATE FUNDS

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The AF

3.2.1 Range of Participation The Environmental and Social Policy refers to “stakeholders” as those enjoying the right to participate in the resource allocation process of the AF.64 However, the policy does not offer an explicit definition of who these stakeholders are. The provision on stakeholder participation generally refers to “project-affected people and other stakeholders” or “communities that are directly affected by the proposed project/ programme.”65 The document makes other references connected to these groups, such as “civil society and other stakeholders,”66 “marginalized or vulnerable groups,”67 and “vulnerable communities,”68 which refer to “children, women and girls, the elderly, indigenous people, tribal groups, displaced people, refugees, people living with disabilities, and people living with HIV/AIDs.”69 Accordingly, AF policies confine these to those “directly affected,” thereby excluding those who are potentially affected or who have an interest in the project or program. These actors may also be granted both decisional and non-decisional participation opportunities. In relation to non-decisional participation, the AF offers a notice-and-comment procedure. Once a project proposal is received by the Board, it is published on the AF’s website for interested persons to comment.70 This procedure permits any interested person to comment on a proposal through the AF website. As for consultations on project design, they were first regulated in the 2013 Environmental and Social Policy, which requires they make “particular reference to vulnerable groups.”71 For the selection of participating stakeholders in the consultations, the document establishes some procedural aspects, according to 64 AFB, ‘Environmental and Social Policy’ (2013) AF, para. 33. 65 Ibid. 66 Ibid., para. 4. 67 Ibid., para. 13. 68 Ibid., para. 10. 69 Ibid., para. 14. 70 AF, ‘Proposals Currently Under Review’ (2019) AF, https://www.adaptation-

fund.org/projects-programmes/proposals-concepts-under-review/, accessed 27 December 2020. 71 AFB, ‘Instructions for Preparing a Request for Project or Programme Funding from the Adaptation Fund’ (2013) AF, part II (H).

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which the PAs are responsible for identifying stakeholders and involving them in AF project and program planning through timely, effective, inclusive, and free consultations.72 The document Instructions for preparing a request for project or programme funding from the Adaptation Fund specifies that “all direct and indirect stakeholders” should be consulted and listed in the proposal together with the criteria considered for their selection (the principles of choice, the role ascription, and the date of consultation) for it to be later scrutinized by the AF Secretariat.73 However, nothing is specified as to who are the ‘direct’ stakeholders and who the ‘indirect.’ As for decisional participation, AFB meetings have become progressively more open to local stakeholders. Since 2011, local stakeholders can engage actively with the AFB in informing its operations. The Rules of procedure of the AF offer the possibility of other actors besides Board members to attend the Board meetings as observers, unless the Board decides that a meeting is closed.74 However, even if closed, the Board may invite observers, and still “be open to members, alternates and the representatives of the secretariat and the trustee.”75 Their selection process is considerably informal. Decisional participation in the AFB meetings includes “representatives of UNFCCC Parties, the UNFCCC secretariat and UNFCCC accredited observers.”76 CSOs that are non-profit, have independent juridical personality and have completed at least one full accounting year can become UNFCCC accredited observers after applying to the UNFCCC Secretariat.77 Any accredited observer needs only to register online in order to participate in the meeting. However, the policy documents say nothing about the maximum number of observers that would be allowed at a meeting. In theory, any registered observer should be able to participate.

72 Ibid., para. 33; AF, ‘Request for project/programme funding from the Adaptation Fund’ (2013) AF. 73 AFB (n 183) 7–8. 74 See AFB, ‘Rules and Procedure of the Adaptation Fund Board’ (2019) AFB/B.34/

Inf.10, para. 19. 75 Ibid., para. 20. 76 Ibid., para. 31. 77 UNFCCC, ‘UNFCCC Standard Admission Process for Non-Governmental Organi-

zations (NGOs)’ (2017) UNFCCC.

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3.2.2 Influence of Participation Regarding the influence of non-decisional participation, there is limited information on the notice-and-comment procedure. Comments on published proposals are to be sent via email, and these may be included in proposals and posted in the AF website. Yet, there is no explicit role assigned to the AF Secretariat once comments are submitted.78 Accordingly, it is uncertain how submitted comments are examined. As for consultations, the Revised Guidance Document for Project and Programme Proponents to better Prepare a Request for Funding requires an initial consultative procedure with local stakeholders at the concept development stage. This should be done for “their interests or concerns (to be) taken into account when designing the proposal.”79 Moreover, the Environmental and Social Policy establishes that environmental and social screenings, assessments, and management plans shall be made available by PAs for local stakeholder consultations. And if any changes in the project or program should be proposed, these shall also be made available for consultation with directly affected communities.80 In order to ensure that consultations are meaningful, the Fund policies establish procedural obligations requiring that these are documented, describing the techniques that have been employed and the key consultation findings, in particular in relation to suggestions and concerns raised, for Secretariat scrutiny.81 In relation to the influence of decisional participation, the degree to which observers can contribute to meeting discussions is limited. They can only participate in open sessions of AFB meetings, which they “may attend without the right to vote.”82 Accordingly, participation is closely tied to the transparency of Board meetings, as closed sessions preclude observer attendance. Moreover, observers can only give input and make presentations relating to matters under consideration by the Board, unless

78 AF (n 182); S. Harmeling and A. Kaloga, ‘Adaptation Fund: Critical Progress at the 7th Meeting’ (2009) Germanwatch, 2–3. 79 AFB, ‘Revised Guidance Document for Project and Programme Proponents to better Prepare a Request for Funding’ (2012) AFB, 8. 80 AFB (n 176), para. 33. 81 AFB (n 191), 8. 82 AFB (n 186), para. 31.

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any Board member objects.83 However, the policies do not establish under which circumstances may a Board member object, and if reasons shall be given when this happens. Finally, observers are only allowed to make interventions after an agenda item has already been discussed, and they cannot propose additional agenda items.84 3.2.3 Resources Required to Participate Effectively Finally, in 2014, the AFB established the Readiness Programme for Climate Finance in order to make several small grants available to applicant developing countries. Through these small grants, the program aims to deliver capacity-building support to developing countries.85 These include Project Formulation Grants and Project Formulation Assistance grants, which can be of up to USD 30,000 and USD 20,000 per project, respectively, and are delivered to PAs in order to undertake project formulation activities—such as consultations—or technical assessments during the project preparation phase.86 Moreover, the AF has also supported the creation of inter-agency coordination bodies that promote participation of local stakeholders in project or program design and decision-making. For example, in Honduras, the AF-supported Climate Change Inter-Institutional Committee, composed of representatives of government, universities, and more than 40 NGOs, works as a platform that advises the government in official decisionmaking processes and adaptation finance strategies before seeking access to the Fund.87 However, it does not directly provide funding to enable observers from developing countries to participate in AFB meetings.88

83 Ibid., para. 33 and 34. 84 AFB, ‘Background of the Adaptation Fund’ (2011) AFB/B.16/Inf.3. 85 AF, ‘Readiness Programme for Climate Finance’ (2019) AF, https://www.adapta

tion-fund.org/readiness/#:~:text=The%20Adaptation%20Fund’s%20Readiness%20Program me,counter%20changing%20climate%20conditions%20in, accessed 25 January 2021. 86 AF, ‘Project Formulation Assistance Grants’ (2019) AF, https://www.adaptation-

fund.org/readiness/readiness-grants/project-formulation-assistance-grants/, accessed 25 January 2021. 87 Trujillo and Nakhooda (n 90), 27. 88 E. Lorimer, J. Masao and J. Grimm, ‘AF NGO Network Recommendations. Further

Strengthening Civil Society Engagement in the Work of the Adaptation Fund Board’ (2020) Adaptation Fund NGO Network.

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3.3

PARTICIPATION IN THE CLIMATE FUNDS

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The GCF

3.3.1 Range of Participation The GCF’s Governing Instrument grants stakeholders, including “private-sector actors, civil society organizations, vulnerable groups, women and indigenous peoples,” the right to participate in the resource allocation process of the GCF.89 The more recent GCF Environmental and Social Policy, adopted in 2018, further develops the right of this group, which it defines as “individuals or groups, communities, governments who: (a) are affected or likely to be affected by the activities; and (b) may have an interest in the activities (other interested parties),” and include “local communities, national and local authorities, including from neighbouring governments, neighbouring projects, and nongovernmental organizations.”90 Therefore, this definition encompasses those stakeholders “likely to be affected” and those that “may have an interest in the activities,” although these categories are not further defined. These stakeholders may be granted both decisional and non-decisional participation opportunities. In relation to non-decisional participation, the policies of the GCF make no reference to notice-and-comment procedures. Non-decisional participation is centered mainly on stakeholder consultations during the project design phase. The Governing Instrument mandated the GCF Board to develop mechanisms to promote the input and participation of stakeholders,91 but consultation of local stakeholders was only made explicit in the 2018 Environmental and Social Policy.92 In the same year, the GCF Board adopted the GCF Indigenous Peoples Policy,93 introducing a standard of FPIC of (potentially) affected indigenous peoples to be informed in relation to expected impacts and risks and to freely consent.94 For their selection, the 2018 Environmental and Social Policy and the 2018 Indigenous Peoples Policy placed on the PAs a procedural obligation to establish accountable, participatory, and transparent systems

89 Governing Instrument, para. 71. 90 GCF Board, ‘Environmental and Social Policy’ (2018) GCF/B.19/06, para. 2(v). 91 Governing Instrument, para. 71. 92 GCF (n 202), paras. 5(b), 8(i) and 12(b). 93 GCF, ‘GCF Indigenous Peoples Policy’ (2018) GCF/B.19/05. 94 Ibid., paras. 22, 26, 27 and 31ff.

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of consultation of all (potentially) affected stakeholders and indigenous peoples, respectively, in GCF-funded projects and programs.95 Consequently, the submission of concept notes must include a description of which local stakeholders were consulted through inclusive consultative processes seeking to engage all relevant stakeholders.96 Then, the GCF is to examine whether all (potentially) affected stakeholders have been appropriately consulted.97 As for decisional participation, the GCF also provides for the participation of accredited observers in Board meetings.98 According to the Guidelines relating to the Observer participation, accreditation of Observer organizations, and participation of active Observers (Observer guidelines ), CSOs may apply to the Secretariat by stating their objectives, administrative structure, and the potential benefit of their input for the GCF Board.99 The Secretariat will consider whether the CSO has a wellorganized administrative structure, relevant experience and competences, and specialized technical and scientific competences related to the Fund’s goals.100 As of August 2023, the GCF counts 479 CSOs registered as observers.101 The Observer guidelines set a maximum of four observers participating in Board meetings: “two civil society representatives, one each from developing and developed countries, and two private sector representatives, one each from developing and developed countries.”102 These are selected by the accredited CSO observers themselves, in order to represent local stakeholder voices in all Board meetings for a term

95 GCF (n 202), paras. 5(b), 8(i) and 12(b); GCF (n 205), para. 26(a). 96 GCF Board, ‘Updated Strategic Plan for the Green Climate Fund: 2020–23. Draft

by the Co-Chairs’ (2020) GCF/B.25/09, para. 13–14. 97 GCF (n 202), paras. 13, 14(a)(i) and 15; For the indigenous peoples, see GCF (n 205), paras. 27 and 31ff. 98 Governing Instrument, para. 16. 99 GCF, ‘Guidelines Relating to the Observer Participation, Accreditation of Observer

Organizations and Participation of Active Observers’ (2013) GCF B.01–13/03 (Observer guidelines) Annex XII, paras. 6ff. 100 Ibid., para. 7. 101 GCF, ‘GCF Observer Directory’ (2023) GCF, https://www.greenclimate.fund/

about/partners/observers, accessed 21 August 2023. 102 Observer guidelines, para. 11.

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of two years, with a maximum of two consecutive terms.103 They shall attend open meetings, but as opposed to the rest of the Funds, the practice of the GCF is that active observers are also allowed in closed sessions after signing a confidentiality agreement.104 3.3.2 Influence of Participation Regarding the influence of non-decisional participation, the GCF policies grant significant participatory power to indigenous peoples. According to the Indigenous Peoples Policies , proposals shall be the result of FPIC through effective, proper, and meaningful consultations on risks and impacts of the proposal to affected indigenous peoples.105 Consent of indigenous peoples should be obtained before the proposal is considered by the GCF Board on the basis of their own deliberations and decision-making process. However, the policy establishes that unanimity is not required,106 which implies that an agreement may be reached even when individuals within the indigenous community oppose the proposal. The policies simply require that projects are ‘mutually accepted’ and turned into an agreement between proponents and affected indigenous peoples,107 without clearly establishing the scope of this acceptance, or what majority shall represent indigenous peoples’ consent. Accordingly, for the GCF projects and programs, FPIC consists of consultations in which project proponents and indigenous peoples shall reach an agreement. As for consultations, the Environmental and Social Policy establishes that these should take place during the project design phase.108 The PAs shall allow “meaningful and inclusive” local stakeholder consultation, taking into account the particular circumstances of vulnerable and marginalized local stakeholders.109 This should be done “in a manner that facilitates the inclusion of local knowledge in the design of the activities, provides them with opportunities to express their views on risks, impacts 103 Ibid., para. 12. 104 Lorimer, Masao and Grimm (n 200), 10. 105 GCF (n 205), paras. 22(a), 26, 31(a)(i). 106 Ibid., para. 54. 107 Ibid., para. 55(c). 108 GCF (n 202), para. 12(b). 109 Ibid., para. 14(a)(i).

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and mitigation measures related to the activities, and allows the accredited entities to consider and respond to their concerns.”110 In order to oversee this, the GCF establishes some procedural guarantees. More concretely, the funding proposal template includes a section in which applicants must provide a full description of a multi-stakeholder plan, with the consultations conducted for the proposal design. Likewise, proponents shall also include an Indigenous Peoples Plan and document consultations with Indigenous Peoples leading to FPIC, including a summary of the outcomes and how issues have been addressed.111 Then, the content and extent of consultations shall be overseen by the GCF.112 As for the influence of decisional participation, of the four observers, only two that are selected by accredited CSOs can actively participate in the meetings—one representing developing country CSOs and one representing developed country CSOs.113 While all observers may attend meetings, according to the Boards’ Observer guidelines, “active observers may intervene upon invitation of the Co-Chairs in open segments of the meetings of the Board.”114 “Intervening” consists of soliciting, collecting, and communicating information from CSOs to the Board in matters delivered during the meetings.115 Yet, the term “upon invitation” can be understood as if they are only allowed to speak when the co-chairs allow them to. 3.3.3 Resources Required to Participate Effectively Finally, a Readiness and Preparatory Support Programme has been established in order to provide funding to applicant developing countries to support several activities, such as strengthening institutional capacities, governance mechanisms, and planning frameworks. These activities also include the engagement of local stakeholders in the GCF programming process to promote their consultation during the project design with the

110 Ibid., para. 18. 111 See, GCF, ‘Funding Proposal Template’ (2019) GCF, section G.1; GCF (n 205),

para. 44. 112 GCF (n 202), paras. 13, 14(a)(i) and 15; For the indigenous peoples, see GCF (n 205), paras. 27 and 31ff. 113 Observer guidelines, para. 16. 114 Ibid., para. 14. 115 Ibid., para. 14(c).

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national authority of the recipient country and the PAs.116 The program is currently capped at USD 1 million per individual country per year. As of August 2023, the GCF Board has approved USD 527.6 million.117 Moreover, according to the GCF’s Travel Policy, active observers located in eligible developing countries are qualified to receive funding in order to travel to GCF Board meetings.118 The Fund may also make arrangements through a travel agent or reimburse hotel accommodation for every night spent for attending the meeting.119 However, the GCF does not offer financial support for the rest of the CSO observers.

4

Critical Assessment of Participation

Table 1 summarizes the main characteristics of the policies of each of the Climate Funds on stakeholder participation. By examining these policies, it becomes evident that the Funds have established a number of structured processes for engaging stakeholders in the project design and decision-making, including the FPIC of indigenous peoples, stakeholder consultations, and notice-and-comment procedures. Moreover, the Funds monitor compliance with these formal procedures, employing methods like Secretariat assessments of consulted stakeholder lists and stakeholder engagement plans. Building upon these policies and processes, the chapter will now embark on a comprehensive evaluation and comparative analysis of the Funds, in order to draft constructive criticisms and highlight best practices across all dimensions of local stakeholder participation: the extent of involvement of local stakeholders, the impact of their participation, and the resources granted to facilitate effective engagement in the resource allocation process.

116 Ibid., paras. 8ff; J.P. Brice Affana, ‘Civil Society Engagement with the Green Climate Fund. A Factsheet for Civil Society’ (2019) Germanwatch; L. Schalatek, S. Nakhooda and C. Watson, ‘The Green Climate Fund (2015) 11 Climate Funds Update, 6. 117 GCF, ‘Country Readiness’ (2023) GCF, https://www.greenclimate.fund/readiness, accessed 19 August 2023. 118 GCF, ‘Travel Policy’ (2014) GCF/B.08/30, para. 6(d). 119 Ibid., para. 30.

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Table 1

Range

Participation in the climate funds GEF funds

AF

GCF

Stakeholder Definition Consultations Notice-andcomment Indigenous FPIC

Yes

No

Yes

Yes No

Yes Yes

Yes No

Yes—affected

No

Selection of consulted

Applicant country with PAs’ support, scrutinized by Secretariat 10 (5 active) GEF Secretariat for open meetings

PAs, scrutinized by Secretariat

Yes—(potentially) affected PAs, scrutinized by Secretariat

Observers Selection of observers

Influence

Influence of FPIC

Time of consultations

Content of consultations Secretariat scrutiny Define different capacities Observer’s input

Unlimited Online registration, may be invited to closed meetings -

Agreement between the majority of indigenous peoples and proponents Earliest phase, Initial throughout project consultation, design environmental and social screenings and after changes Propose project Interests and ideas and guidance concerns

4 (2 active) CSO observers may access closed meetings

Meaningful consultation agreed by the majority in their own deliberation During project design

Stakeholder engagement plan Yes

Techniques and findings No

Local knowledge, views and concerns Multi-stakeholder plan Yes

Inputs after discussion on item agendas

Inputs after discussion on item agendas

Input upon invitation in open segments

(continued)

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(continued)

Resources Funding for consultation Funding for meetings

GEF funds

AF

GCF

Yes (CSP)

Yes (project formulation) No

Yes (readiness support) Active observers’ travel expenses

Observers’ travel expenses

4.1

Range of Participation

In relation to the definition of stakeholders, both the GEF Funds and the GCF determine them as those who have an interest in the outcome of a project or are potentially affected by it, from national and local public entities to CSOs and individuals. However, the AF does not offer an explicit definition. Instead, it employs distinct terms, such as ‘project-affected people’ or ‘communities.’ These concepts are somehow connected to civil society groups and vulnerable communities—including, among others, children, women, and indigenous people—but the AF does not specify the exact scope of these groups. Moreover, the terms ‘projectaffected people’ and ‘communities’ do not necessarily relate to those ‘potentially’ affected or ‘having an interest’ in the outcome of a project or program. This is problematic, for the impacts of a project may only become apparent several years after the approval of a proposal. Consequently, those who could eventually be affected or have an interest in its outcome may not be considered to be affected initially, and therefore, may be excluded from participating in the project design phase according to the AF policies. In contrast, the GEF Funds and GCF offer a best practice policy by accommodating a broader range of interests. However, neither Fund provides explicit definitions for ‘potentially’ affected and ‘having an interest,’ leaving these concepts open to interpretation by project proponents. In relation to the types of non-decisional participation that the Funds offer to these actors, the AF is the only Fund that includes a noticeand-comment procedure. This is a best practice policy for participation that allows any stakeholder to self-select and judge whether they have an interest or may be potentially affected by the project or program, and to review and comment on any proposal prior to Secretariat screening. Accordingly, all different kinds of interests may be represented in the

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proposal, including non-material interests that may have been excluded from consultations. Nonetheless, a study from Germanwatch, a CSO observer to the AF, indicates that local stakeholders rarely engage actively in practice and that only a very limited number of comments are submitted.120 This is due to the relatively short timeframes for commenting, usually about three weeks. Frequently, local stakeholders have not had an opportunity to be involved in the project design process before this stage and must navigate several hundreds of pages of a project proposal often lacking information in their country’s official language.121 The rest of the Funds do not offer a formal notice-and-comment mechanism at the Fund level that allows for public comment and feedback on funding proposals. Against this backdrop, local stakeholders are forced to be proactive and to organize themselves informally in order to submit their comments to the PAs.122 However, in the absence of a notice-and-comment procedure, the Secretariat scrutiny of proposals does not offer any control and will not assess whether their comments have been received and acted upon. In this regard, stakeholders have complained about the lack of these sorts of platforms to support and assist their engagement with project coordinators.123 The Fund policies also differ on whether Indigenous Peoples must give FPIC to activities that affect them.124 The GEF Funds have incorporated this through their environmental and social policy, while the GCF has adopted it in a separate instrument, the Indigenous Peoples Policy. Both instruments require proponents to confirm that all affected indigenous peoples are consulted and reach an agreement with proponents—although the GCF further includes those potentially affected. In this regard, the GCF offers the best practice policy, given the broader array of stakeholders encompassed by the term ‘potentially.’ On the other side of the spectrum, the AF does not require the FPIC of indigenous peoples. Conversely, it only makes indirect reference to this group in its Environmental and Social Policy, by requiring consultations with vulnerable groups, and including within it indigenous peoples. Consequently, 120 For the study by Germanwatch, see Grimm, Weischer and Eckstein (n 127), 35. 121 See, Ibid., 35; See also, Ballesteros et al. (n 65), 286. 122 Lottje et al. (n 106), 53. 123 See e.g., Omukuti (n 5). 124 Amerasinghe et al. (n 52), 57.

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indigenous peoples receive less attention in the AF compared to the other Funds, as their consultation is contingent on their categorization as a vulnerable group. All the Climate Funds require consultation of stakeholders in the project or program design. The GEF Funds establish procedural obligations requiring applicant countries to conduct them with the support of relevant PAs, whereas the rest place this responsibility on the PAs. In any case, in all Funds, proposals must identify and present evidence of consultation of all affected stakeholders for the Fund Secretariat to scrutinize for approval. However, in practice, there are notable deficiencies in relation to at least two distinct issues in this regard. First, proposals used to fail to provide adequate information about which stakeholders had been consulted, and they were still approved by the Funds. Secondly, there is an observable trend where approved projects often omit consultation with relevant local stakeholders. In relation to the first problem, several AF projects and programs have not sufficiently documented stakeholder consultation in their proposals.125 To provide a clear example, the AF project Addressing Climate Change Risks on Water Resources in Honduras aimed at addressing extreme weather and building climate resilience in the face of water scarcity and flooding of local communities in Tegucigalpa and Choluteca. In keeping with this, Honduras requested together with the PA UNDP a USD 5.6 million grant for strengthening institutional structures, assisting in safeguarding water supplies, and building the capacity of affected local stakeholders.126 However, the proposal did not include 125 See e.g., AF, ‘Project/Programme Proposal. Increasing Climate Resilience and Enhancing Sustainable Land Management in the Southwest of the Buenos Aires Province’ (2012) AF, 50–51; AF, ‘Project/Programme Proposal. Increasing Climate Resilience through an Integrated Water Resource Management Programme in HA. Ivahandhoo, ADh. Mahibadhoo and GDh. Gadhdhoo Island’ (2012) AF, which includes a list of stakeholders but generally refers to “private sector” or “environmental NGOs”. AF, ‘Project/Programme Proposal. Enhancing Resilience of Coastal Communities of Samoa to Climate Change’ (2012) AF, which provides a list, but makes vague references to “representatives of all key vulnerable groups in the communities”, “village representatives” or “key national agencies and NGO representatives”. 126 AF, ‘Addressing Climate Change Risks on Water Resources in Honduras. Increased Systemic Resilience and Reduced Vulnerability of the Urban Poor’ (2019) AF, https:// www.adaptation-fund.org/project/addressing-climate-change-risks-on-water-resourcesin-honduras-increased-systemic-resilience-and-reduced-vulnerability-of-the-urban-poor/,

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a list of local stakeholders involved together with the criteria considered for their selection (that is, the principles of choice, the role ascription, and the date of consultation). Rather, it simply named nine CSOs among “different civil organizations and governmental institutions” who had participated in a previous workshop. The proposal also made reference to an indefinite number of consultations, the purpose of which, together with the date and identity of the attendees, were unknown.127 This means that the requirement that PAs consult local stakeholders could not have possibly been overseen by the Secretariat as the Fund policies demand. Yet, the project was still approved by the AFB in 2010 and was completed in 2016.128 There is also evidence of GEF Funds project proposals that have not sufficiently documented stakeholder consultation,129 but not in relation to the GCF. However, it must be noted that the requirement of the AF to list all stakeholders consulted in the proposal together with their selection criteria was adopted in 2013,130 whereas the requirement of the GEF to identify and present evidence of the consultation of all affected stakeholders was adopted in 2011.131 Yet, all the projects that have failed to sufficiently document stakeholder consultation were approved before these dates. Later proposals have consistently documented all consulted stakeholders in the project design.132

accessed 1 February 2021. 127 AF, ‘Project/Programme Proposal. Addressing Climate Change Risks on Water Resources in Honduras: Increased Systemic Resilience and Reduced Vulnerability of the Urban Poor’ (2010) AF, 26. 128 AF (n 238). 129 World Bank, ‘GEF Project Brief on a Proposed Credit in the Amount of SDR

Million (US$4.5 Million Equivalent) to the Government of Rwanda for a Sustainable Energy Development Project’ (2006) WB; World Bank, ‘GEF Project Brief on a Proposed Grant from the Global Environment Facility Trust Fund in the Amount of USD 6.5 Million to the United Republic of Tanzania for an Energizing Rural Transformation Project’ (2006) WB. 130 AFB (n 183). 131 See, GEF Council (n 138), paras. 2 and 6. 132 For the GEF Funds, see e.g., GEF, ‘Transforming the Fashion Sector to Drive Posi-

tive Outcomes for Biodiversity, Climate and Oceans. Review CEO Endorsement and Make a Recommendation’ (2020) GEF, para. 10; For the AF, see e.g., AF ‘Project/Programme Proposal. Increasing Climate Resilience and Enhancing Sustainable Land Management in the Southwest of the Buenos Aires Province’ (2012) AF, 19ff.

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However, the second problem associated with the exclusion of relevant stakeholders remains unaddressed by the Funds and could be widespread. A clear example of this is the project Developing Core Capacity to Address Adaptation to Climate Change in Tanzania in productive Coastal Zones,133 an LDCF-funded coastal adaptation project proposed by Tanzania together with the PA UNEP. This project aims to address sea-level rise, coastal erosion, flooding, and saltwater intrusion by building sea walls and regenerating coastal vegetation. According to the project proposal, it offered wide stakeholder participation through a steering committee composed of national and sub-national government, community, and CSO representatives from the targeted communities (three per site) and key NGOs coordinating the project.134 The Mid-Term Review of the project and the Project Implementation Report reveal that all these stakeholders were engaged in the project design and participated on a regular basis.135 Moreover, empirical evidence from interviews conducted with affected stakeholders suggests that most of them expressed their opinions through consultations in different forums and at different stages of the project cycle, and have perceived themselves as having influenced different aspects of the project.136 For instance, the project initially was not intended to have mangrove nurseries, but stakeholder participation enabled their establishment.137 However, the same study suggests that, with the exception of government or sub-government actors, most stakeholders reported participating in either project design or project implementation, but not in both.138

133 GEF, ‘Developing Core Capacity to Address Adaptation to Climate Change in Productive Coastal Zones’ (2010) GEF, https://www.thegef.org/project/developingcore-capacity-address-adaptation-climate-change-productive-coastal-zones, accessed 21 October 2020. 134 GEF, ‘Project Identification Form (PIF). Developing Core Capacity to Address Adaptation to Climate Change in Tanzania in productive Coastal Zones’ (2009) GEF, 5. 135 J. Garcia, ‘Mid-term Review of two UNEP projects in Tanzania. Final Report’ (2015) Baastel, para. 77; GEF, ‘UN Environment GEF PIR Fiscal Year 2019 (1 July 2018 to 30 June 2019)’ (2019) GEF, 3. 136 Omukuti (n 5). 137 Ibid., 32. 138 Ibid., 31.

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Likewise, the Mid-Term Review of the project revealed that several relevant non-state actors and local stakeholders, such as the Tanzania Forestry Service—responsible for the management of mangroves in the area,— the Tanzania Forest Research Institute and representatives of Gondo and Sadani villages in Bagamoyo District—areas affected by the project—were excluded from the project steering committee.139 As a result, they were denied the opportunity to acquire knowledge about the project’s scope, to voice their opinions, and to contribute with their perspectives during the project design phase. In relation to decisional participation, all Funds provide for the involvement of local stakeholders as observers in Board or Council meetings. However, they all differ in relation to at least two key aspects: (1) the maximum number of observers allowed in meetings and (2) the procedure for their selection. Regarding the number of observers, the AF is the only Fund that does not establish a ceiling of local stakeholders allowed to participate in AFB meetings. These may only attend open meetings, although they may also be invited to closed meetings. However, this completely depends on the Board’s discretion, and the concrete circumstances to be taken into account in making this decision are defined nowhere. Of the other Funds, the GEF Funds offer the highest number of seats to observers by ten. Yet, these observers can only attend open meetings. Finally, the GCF only engages with four individuals at its meetings, which is a very reduced number of attendants. However, the GCF offers a best practice policy, for it allows observers to attend closed sessions after signing a confidentiality agreement. In relation to the selection of stakeholders, the AF is the Fund with the least formal selection process. Representatives must be accredited UNFCCC observers, and only need to register online for a meeting. The criteria for becoming an accredited UNFCCC observer are less restrictive compared to those of the other Funds—status as a non-profit entity, independent juridical personality, and over a year of account-keeping. However, the accreditation procedure can be lengthy—usually around 18 months.140 Moreover, the entity that selects the observers who can attend 139 Garcia (n 247), paras. 63, 107 and 115. 140 See in general, UNFCCC, ‘How to

Obtain Observer Status’ (2021) UNFCCC, https://unfccc.int/process-and-meetings/parties-non-party-stakeholders/nonparty-stakeholders/overview/how-to-obtain-observer-status, accessed 21 July 2020.

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the meetings, the selection criteria that are taken into account to that end, and the procedure itself of selection are unknown. Yet, a review of the last Board meetings reveals that attendance is wide and varied. During the 40th Board meeting on March 21, 2023, nine observers were present, representing three Member States, two UN Agencies, and two CSOs.141 The 39th session held on October 13, 2022, had twelve observers comprising four UN Agencies, two Member States, and one CSO.142 The 38th session on April 7–8, 2022, was attended by sixteen observers, including five UN Agencies, two Member States, and five regional and local CSOs.143 The 37th session between October 19 and 21, 2021, hosted sixteen observers representing three UN Agencies, two Member States, three regional and local CSOs, and one international organization.144 The fact that any accredited observer may register to attend a meeting and that it is easy to inquire which observers can or will attend a meeting, facilitates decisional participation for local stakeholders, enabling them to reach these observers in order to raise their interests and concerns to a Board meeting. As for the GEF Funds, observers are selected among accredited CSOs by the Secretariat. The accreditation criteria the Funds employ are rather loose and wide-ranging—“well-established CSOs,” “with experience in a technical or geographical area,” and “alignment with the GEF’s mission.” The representation is only divided into two groups—regional CSO representatives and local CSOs—with no reference to indigenous peoples. GEF policies only establish that balancing the needs of inclusion is taken into account during the rotation of CSO representation, not for the selection of representatives, which is uncertainly decided by the Secretariat after consulting different CSO-related entities. Moreover, Council meeting documents do not reflect which observers were selected and attended the meeting. Therefore, it cannot be ascertained whether chosen observers are representative of all affected local stakeholders in the decision-making of a project or program, nor can the latter easily reach the former for raising their concerns or interests at Council meetings.

141 AFB, ‘List of Observers (As of 142 AFB, ‘List of Observers (As of 143 AFB, ‘List of Observers (As of 144 AFB, ‘List of Observers (As of

21 March 2023)’ (2023) AFB/B.40/Inf.3. 13 October 2022)’ (2022) AFB/B.39/Inf.3. 2 April 2022)’ (2022) AFB/B.38/Inf.3. 12 March 2019)’ (2019) AFB/B.33/Inf.3.

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Finally, in relation to the GCF, observers need also to be accredited by the Secretariat, for which the criteria are similarly loose and vague as those of the GEF Funds—with “well-organized administrative structure,” “relevant competences and experience,” and “specialized scientific and technical competences.” However, Board attendants are selected by CSOs themselves, and for a term of two years. This means that they act as representatives of stakeholders in general rather than of those affected by a project in particular. Therefore, the channel for raising interests and concerns over a project is indirect as local stakeholders of a project may not be directly represented by these. Finally, representation is also divided into two groups: two CSOs and two from the private sector, one from a developed country and one from a developing country each.145 Accordingly, in the end, only one observer represents the diversity of geographies and constituencies within civil society. Besides, none of the four seats are dedicated to indigenous peoples. Therefore, this group is not granted direct representation in project decision-making, leaving their concerns over concrete projects largely underrepresented before the GCF Board. 4.2

Influence of Participants

In relation to FPIC, the GCF offers the best practice policies. This is because consent shall be the result of an “effective, proper and meaningful consultation” with the affected indigenous people on the basis of the latter’s own deliberations. In contrast with this, the consent of indigenous peoples at the GEF Funds does not result from the peoples’ own decision-making process, but rather from an agreement between the indigenous community and the project proponents. While there is general agreement on the fact that consent must be an act of reason accompanied by due deliberation,146 the differences in the bargaining power between project proponents and indigenous peoples imply that the 145 At the time of this writing, Ms Eileen M. Cunningham and Ms Erika Lennon are active observers for CSOs—from the Asociación Indígena Centro para la Autonomía y Desarrollo de los Pueblos Indígenas, and the Center for International Environmental Law, respectively. Mr Pablo Fernandez and Ms Margaret-Ann Splawn are active observers for the private sector—from the International Emissions Trading Association and the Climate Markets and Investment Association, respectively. See, GCF, ‘Partners’ (2021) GCF, https://www.greenclimate.fund/about/partners/observers, accessed 9 April 2021. 146 R. Shrinkhal, ‘Free Prior Informed Consent as a Right of Indigenous Peoples’ (2014) 2 Journal of National Law University, 57.

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former’s motives or intentions can potentially be imposed in the effort to obtain an agreement. Therefore, the lack of opportunities for indigenous peoples to give their consent as a result of their own deliberations implies that the resulting consent may not be as free as it would be if adopted through their own deliberative process.147 Finally, the lack of requirement of an FPIC at the AF implies that indigenous peoples receive less attention as there is no need for projects to receive their consent. Conversely, as a vulnerable group, they only have access to “timely, effective, inclusive and free consultations,” without a clear reference as to the “effectiveness” of this consultation and how relevant their input is. Overall, only the GEF Funds and the GCF require that indigenous peoples give their consent for proposals to be susceptible of being approved. Yet, none of these Funds’ policies are clear as to the scope of this consent. They only establish that proposals should be ‘mutually accepted’ by both proponents and indigenous peoples, and that unanimity of the latter is not required. Accordingly, FPIC under the Climate Funds does not grant a veto power to indigenous peoples. Conversely, it simply consists of consultations in which a majority of indigenous peoples shall give their consent to the project. However, it is uncertain how this majority is determined, and by reference to whom. Against this backdrop, the Funds’ policies do not adequately address issues of diversity of affected indigenous peoples, under-representation, or imbalances of power. A concrete illustration of these implications can be found in the GCF project Building the Resilience of Wetlands in the Province of Datem del Marañón, Peru. This project’s objective was to reduce deforestation and GHG emissions in the Datem region of Peru in the Amazon basin.148 In keeping with this, it aimed at creating and consolidating protected areas, facilitating better land-use planning, and strengthening bio-businesses of forest products (such as salted fish, smoked meat, and aguaje pulp) of its indigenous communities. The project proposal promised wide stakeholder consultation, outlining a consultative process that included nearly 500

147 For an account of the concept of FPIC, see Ibid., 58; See also, T. Ward, ‘The Right to Free, Prior, and Informed Consent: Indigenous Peoples’ Participation Rights within International Law’ (2011) 10(2) Northwestern University Journal of International Human Rights , 54–84. 148 GCF, ‘FP001. Building the Resilience of Wetlands in the Province of Datem del Marañón, Peru’ (2021) GCF, https://www.greenclimate.fund/project/fp001, accessed 1 February 2021.

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people representing more than 80 communities and 21 organizations.149 However, of the eight indigenous communities living in the project area that were consulted, the Anchuar opposed the project due to the fact that the protection areas and management will negatively affect its “plan de vida” and rights to land, territory, and natural resources. The project was approved all the same in 2015 on the basis that some of the other communities supported the project.150 On the notice-and-comment procedure, the AF Secretariat considers the feedback received from local stakeholders. This can be observed from the fact that comments on projects and the Secretariat’s assessments are published and accessible on the website.151 By way of example, the Bunda Climate Resilience and Adaptation Project, is a proposal that was submitted on January 18, 2021, and the comments it received were published in red characters until April 9, 2021.152 However, it is uncertain whether all comments that the proposal received were included in the project proposal and according to which criteria. Moreover, comments are not directly answered, and even if proposals are amended in response to a comment, there is no notification of this.153 Accordingly, it cannot possibly be concluded that comments are given adequate consideration. Regarding consultations, all Funds offer them during the project design phase. The AF takes it a step further by establishing consultation procedures for its environmental and social screenings, assessments, and management plans, and for any changes in the proposal. This is a best practice policy, since the initial version of proposals often undergoes substantial modifications during the back-and-forth movement among the PAs and the Fund Secretariat in the project design phase. The rest of the Funds simply require consultations for the project design, leaving subsequent changes unaddressed. As for the content of consultations, the policies of the Funds diverge. The GEF Funds and GCF take into account in their consultations the 149 GCF, ‘Funding Proposal. FP001: Building the Resilience of Wetlands in the Province of Datem del Marañón, Peru’ (2015) GCF, E.5.3. 150 F. Martone et al., ‘Indigenous Peoples and the Green Climate Fund’ (2017) Tebtebba Foundation, 33–39. 151 Lorimer, Masao and Grimm (n 200), 8. 152 AF (n 182). 153 AF, ‘Project/Programme Proposal. Bunda Climate Resilience and Adaptation Project’ (2021) AF.

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different capacities of local stakeholders. In keeping with this, the GEF Funds encourage stakeholders to propose project ideas or identify the most appropriate ones. In contrast, the GCF only offers stakeholders opportunities to express their views on the projects. Meanwhile, the AF limits itself to establishing that consultations are oriented at taking stakeholders’ interests and concerns into account. Accordingly, the GEF Funds offer the best practice policy, for they allow stakeholders to both give inputs on project ideas and propose their own. However, numerous instances suggest that consulted stakeholders may not exert a significant impact on the project design phase of any of the Funds. To provide the clearest example of this, let’s examine the GEF Trust Fund’s Mesoamerican Biological Corridor project, approved in 2000. Mexico, in collaboration with the World Bank, requested USD 14.8 billion in order to promote conservation and sustainable use of biodiversity through the establishment of biological corridors that connect different protected areas in the Southeast of Mexico.154 The project proposal promised consultation with local stakeholders twice or three times a year to discuss the project’s strategic and operational framework.155 It also indicated that consultations had been organized during the project preparation. However, these simply consisted of informing communities and representatives of farmers’ organizations about the objectives of the project and “establishing a dialogue” with them.156 Empirical evidence based on fieldwork carried out in the area of Chiapas between 2005 and 2006 suggests that stakeholder consultation during the project design was limited to a poll that restricted answers to choosing between a predetermined set of permissible sustainable use projects as eligible by corridor architects. It has been noted that the design was completed long before the assessment, and consultations simply served as mere confirmatory steps.157 This means that participants had no influence on the project design, and shows how the process of stakeholder participation was irrelevant to that end.

154 GEF, ‘Mesoamerican Biological Corridor’ (2021) GEF, https://www.thegef.org/ project/mesoamerican-biological-corridor, accessed 1 February 2021. 155 GEF, ‘Project brief. MX-GE-60908. Mexico: Mesoamerican Biological Corridor’ (2000) GEF, 10. 156 Ibid., 21. 157 Ervine (n 131), 778–782.

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Another example of this is brought by the aforementioned case study of the LDCF project Developing Core Capacity to Address Adaptation to Climate Change in Tanzania in productive Coastal Zones.158 On the one hand, the project partly offered influential participation to stakeholders. This can be concluded from the minutes of the steering committee meetings, which reveal that major decisions on the project were taken with its consultation.159 Likewise, the Mid-Term Review of the project states that city, municipal, and district actors participated on a regular basis, whereas communities participated in the selection of sites.160 More concretely, the Project Implementation Report reveals that these stakeholders were engaged in the project design, including site selections, environmental impact assessment, and awareness raising.161 But on the other hand, some of the affected local stakeholders had no influence on the project design at all. The Mid-Term Review also reveals that the project lacked strong dayto-day participation at the local level.162 In this regard, empirical evidence based on interviews with these actors suggests that the engagement of some stakeholders was limited to simply being told what to do once the sea wall had already been planned. Furthermore, some of the affected local stakeholders objected to specific aspects, such as where the sea wall should have been constructed, but their input was disregarded.163 Regarding the influence of decisional participation, in all Funds observers can make interventions and submit petitions. However, from the Fund policies, one can conclude that observers cannot exert much influence on Board or Council decisions. This is because their interventions are only permitted once the decision-makers have concluded their discussion on a particular item agenda. Moreover, in the AF, this only occurs provided Board members raise no objections, while in the GCF, 158 E.g., for a GEF project that disregarded the territorial and land claims of

affected indigenous peoples, see, GEF, ‘Paraguayan Wildlands Protection Initiative’ (1999) GEF, https://www.thegef.org/project/paraguayan-wildlands-protection-initiative, accessed 5 May 2021; For a critical analysis, see L. Taylor and T. Griffiths ‘A DeskBased Review of the Treatment of Indigenous Peoples’ and Social Issues in Large and Medium-sized GEF Projects’ (2005–2006) Forest Peoples Programme. 159 Garcia (n 247), para. 75. 160 Ibid., para. 77. 161 GEF (n 247), 3. 162 Garcia (n 247), para. v. 163 Omukuti (n 5).

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only if their input should be requested by one Board member. Additionally, there is no certainty that their concerns are heard, or questions answered. Board and Council documents do not identify which items of project or program proposals are discussed by observers, what comments they make, and whether these have any influence on decision-makers. In practice, the AF does not engage sufficiently with local stakeholders in the AFB meetings.164 In fact, the AF has been rated below average for local stakeholders’ limited level of participation in AFB meetings.165 In the case of the GCF, whereas observers have noted that they are able to contribute to all discussed items, and that their views are often taken into account,166 there have been instances where their input has been ignored and decisions have been adopted without seeking the clarifications demanded.167 As for the GEF Funds, there is evidence of serious concerns having been brought before the GEF Council and no response being given.168 This happened at the meeting where the Council approved the India Ecodevelopment Project, a USD 20 million GEF Trust Fund project requested by India and the World Bank to improve protected area management by taking local community needs into account.169 Local communities expressed dissatisfaction with their level of involvement in the project design. The Centre for Science and Environment, acting as observer in GEF Council meetings, raised these participation-related complaints. However, these concerns were disregarded by the Council.170

164 Ballesteros et al. (n 65), 286; Trujillo and Nakhooda (n 90) 8; S. Nakhooda et al. (n 88), 33; Amerasinghe et al. (n 52); Sharma (n 64), 10. 165 Transparency International (n 110) 14. 166 IEO GEF, ‘Evaluation of the GEF-Civil Society Organization Network’ (2016)

IEO GEF, Technical Note 2, para. 17. 167 T. Kalinowski, ‘Institutional Innovations and Their Challenges in the Green Climate Fund: Country Ownership, Civil Society Participation and Private Sector Engagement’ (2020) 12 Sustainability, 8. 168 Sharma (n 64), 18. 169 GEF, ‘India Ecodevelopment’ (2021) GEF, https://www.thegef.org/project/india-

ecodevelopment, accessed 12 April 2021. 170 Sharma (n 64), 20.

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4.3

Resources Required to Participate Effectively

Finally, all Funds have established different mechanisms to facilitate stakeholder participation in the resource allocation process. The five Funds provide assistance to developing countries through readiness or support programs in order to help them engage with local stakeholders in the project design. The GCF offers the highest amounts of funding to this end, capped at USD one million per country per year as compared to USD 30,000 per project for the other Funds. However, it must be noted that the GCF’s cap relates to the maximum funding that a country (and not a project) shall receive. In terms of access, these programs can only be requested by applicant countries through their NDA. Once received, the NDA of the recipient country determines how the funding is disbursed and the related readiness activities to be undertaken. However, these activities may not necessarily involve local stakeholder participation. Consequently, the application and receipt of readiness support by official entities leaves financial support for local stakeholder participation at the expense of the management of the recipient country’s authority. Lastly, the GEF Funds offer the best practice policy in terms of covering traveling costs for local representatives to participate in the decision-making. The AF does not offer any funding for observers to attend AFB meetings, and the GCF only covers expenses for the two active observers. This poses a factual barrier for ineligible local stakeholders to participate in the decision-making, for it seems implausible that they can cover the costs of traveling to the headquarters of the AF and the GCF in Washington, D.C. and Songdo, respectively.

5

Final Remarks

The chapter has examined the circumstances under which stakeholder participation within the Climate Funds could be deemed as inadequate, and the potential impacts of this inadequacy on the rights and interests of local stakeholders. By delving into the standard of participation within global institutional decision-making, the chapter has elucidated how individuals should be engaged in the activities of the Climate Funds and has underscored deficiencies in their policies that contribute to the detrimental effects experienced by local populations.

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Drawing from the literature on participation in global institutions, it can be concluded that decisional participation should be offered to representatives of all local stakeholders potentially affected by the putative funding decision. Furthermore, every individual who could potentially be affected should both be consulted and have the opportunity to participate through notice-and-comment procedures. They should be allowed to offer inputs on all relevant aspects of the global decision through effective communication, to ensure their contributions are duly considered by the Secretariat and the decision-making organs of the Funds. In keeping with all this, the Climate Funds should oversee that their decisions are adopted in compliance with local stakeholder participation procedures, either de facto or at the request of local stakeholders themselves. In light of this, the chapter has offered a deep analysis of each of the Climate Funds’ procedures on stakeholder participation, scrutinized compliance with these procedures, and highlighted good practices. From the analysis, it can be concluded that, although through different approaches, all five Funds have policies in place that promote local stakeholders’ participation to a considerable extent. This is achieved through a combination of consultations, participatory procedures, and scrutiny in the decision-making of these institutions. Overall, the Funds oblige PAs to identify and consult local stakeholders during the project preparation and design for the submission of the proposal, scrutinize compliance with these obligations, and may provide grants to facilitate these consultations. Furthermore, local stakeholders can engage as observers in the Board and Council meetings, thereby voicing their opinions on agenda items. The GEF Funds offer best practices on all three dimensions of participation: their definition of local stakeholders includes ‘potentially’ affected individuals as well as those ‘having an interest’; these actors are allowed to both give inputs on project ideas and propose their own; and the travel costs of their representatives to participate in their Council meetings are covered by the Funds. The AF offers best practice policies in that it offers a notice-and-comment procedure; an unlimited number of representatives can act as observers at the AFB meetings, and it establishes consultation procedures for any changes in the proposals. Finally, the GCF offers best practice policies in that its definition of local stakeholders and indigenous peoples also includes ‘potentially’ affected individuals. Moreover, observers may be allowed to participate in closed sessions after signing a confidentiality agreement and indigenous peoples may carry on their own deliberative processes before consenting to a project or program.

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While these policies do appear to offer local stakeholders the opportunity to engage and have an influence on the projects and programs to a certain extent, the chapter’s critical review also reveals that the Funds still fall short in their efforts to fully incorporate the participation standard in its different dimensions regarding range, influence, and resources of participation. Overall, current practices concerning the selective participation of local stakeholders in consultations can leave affected stakeholders disengaged in the project design and decision-making. Not all individuals or groups who may wish to participate are offered an opportunity to comment on proposals except in the case of the AF, which has an open notice-and-comment procedure in place. Even here, time constraints may sometimes impede the active and effective engagement of stakeholders. Moreover, most Funds establish a limited number of observers that can attend Board and Council meetings. This allocation falls short of representing the diverse range of affected local stakeholders, who in most cases are anyway unable to attend closed meetings. Regarding FPIC policies, these only require the consent of a majority, are weak in the GEF Funds, and absent in the AF. Besides the AF, the Funds do not offer additional consultation processes when proposals undergo changes and, even in instances when consultations are conducted, stakeholders’ inputs wield minimal influence over project design. Additionally, interventions in the decision-making are only possible when discussions over an item agenda have already been concluded and are allowed by a Board or Council member. Lastly, funding for local stakeholder participation is limited, and can only be requested and disbursed by recipient countries. These circumstances considerably limit local stakeholders’ capacity to have their views and interests considered in the design and approval of a proposal, which can have far-reaching consequences for their rights and interests. The case studies presented in this chapter serve as vivid illustrations of these possible consequences. Notably, an inadequate understanding of local interests and necessities can lead to projects not taking into account the unique characteristics of the affected communities. This disregard can result in the disruption of local traditions and social structures, which can have irreparable impacts on communities’ social fabric. A remarkable example of this is the GEF project Reducing Land Degradation on the Highlands of Kilimanjaro, where external businesses monopolized timber harvesting and charcoal production, leaving certain individuals without livelihoods and access to local wildlife resources.

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Additionally, limited stakeholder involvement can result in projects neglecting environmental concerns or the traditional ecological knowledge of local populations, and lead to environmental degradation, loss of biodiversity, and unsustainable resource management practices that harm the natural environment and the livelihoods of local inhabitants. An illustrative example is the GEF Trust Fund’s project Addressing barriers to the adoption of improved charcoal production technologies and sustainable land management practices through an integrated approach, where local knowledge was disregarded, and the use of monoculture tree plantations, which is unsuitable for the project’s goal of improving charcoal production, has left the affected area barer, drier, and less biodiverse. Lastly, the consequences of the Funds’ shortcomings can also manifest in an unequal distribution of burdens, disproportionately impacting specific groups while benefiting others, potentially leading to local conflicts over resources. A telling case is presented by the LDCF’s project Ecosystem-Based Adaptation for Rural Resilience, where the Maasai community was given inadequate access to irrigated land compared to neighboring farmers, heightening tensions between the two groups. However, there might be more to the story. When combined with inadequate transparency, these concerns could be intensified even more deeply. How meaningful can stakeholders’ participation truly be if they lack access to sufficient and comprehensible information before engaging in consultations? How can it be guaranteed that the inputs of all (potentially) affected stakeholders have been taken into account when the Funds refrain from revealing evidence that they have accounted for their concerns? What happens when representatives of affected stakeholders are excluded from Board or Council meetings, and the information relating to deliberations is kept secret? To further explore the interrelation between the policies of the Funds and their effects on the rights and interests of local populations, the next chapter will complement the analysis from this chapter by examining the Funds’ transparency policies. This evaluation will shed light on how transparency may intersect with the participation-related impacts discussed in this chapter, providing a more holistic understanding of the dynamics at play.

CHAPTER 4

Transparency in the Climate Funds

1

Introduction

The negative impacts of the Climate Funds on the rights and interests of local stakeholders have also been associated with insufficient levels of transparency. The literature review presented in Chapter 2 highlights scholars’ criticisms of the lack of clarity, completeness, and consistency of project-related information within the Climate Funds, suggesting that rectifying these issues could mitigate the damages experienced by local populations. Transparency in the resource allocation process of the Climate Funds is crucial for achieving SDG 13, which expressly demands “meaningful actions and transparency” in pursuit of the goal to mobilize USD 100 billion to developing countries annually. Nonetheless, some of the conflicts outlined in the case studies presented in earlier chapters suggest that projects may sometimes be designed and approved without providing sufficient information to affected populations regarding their scope or potential impacts. If stakeholders had been appropriately informed, they could have engaged differently during the project design stages, or more effectively opposed the implementation of projects that ultimately infringed upon their rights and interests. Hence, insufficient transparency may have, to some extent, contributed to the adversities faced by these communities.

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While the literature has raised concerns about the level of transparency displayed by the Funds, it remains unclear when information disclosure policies may be deemed inadequate, and how these may contribute to the specific concrete impacts experienced by local stakeholders. What constitutes a sufficient level of information disclosure? How do we define when information is adequately clear and accessible to local communities? What initiatives are the Climate Funds undertaking to ensure that affected populations have a realistic understanding of the potential consequences of project implementation on their livelihoods? Furthermore, a notable gap exists in the literature concerning the absence of a rigorous comparison of transparency policies across all Climate Funds, as well as the intricate interplay between these policies and the participation concerns raised in the previous chapter. The lack of such a comprehensive exploration hinders the identification of well-developed and pertinent recommendations that could drive essential reforms to address these shortcomings. This chapter will examine whether transparency is adequately regulated in the policies of the Climate Funds, and whether and how these policies might contribute to the adverse effects experienced by local stakeholders. In keeping with this, the concept of transparency in global institutions will be analyzed as outlined in the literature and applied to the context of the Climate Funds, in order to identify the different elements that the Funds should consider in their policies, including the disclosure of sufficient, clear, and accessible information. Lastly, the chapter will conduct an indepth examination of the Climate Funds’ policies to gain comprehensive insights into the extent to which the current policies might be negatively impacting local populations.

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2 Content and Scope of Transparency in Climate Finance Transparency relates to access to information by making it publicly accessible to all the actors involved in a rule-making process.1 Like participation, transparency is present in domestic legal settings. It offers public access to the information necessary for participating and reviewing relevant decisions, and it is a vital foundation for the effective exercise of participatory rights and the promotion of accountability of administrations. Transparency mechanisms are also present within global bodies such as the World Bank, the International Monetary Fund (IMF), and the World Trade Organization (WTO), which have responded to criticisms of decision-making secrecy by enhancing transparency and granting public access to internal documents.2 The information that they share consists of agendas, minutes or proceedings transcripts, final decisions, reports, internal documents, rules, or guiding documents. These can be made publicly available in a “passive” way as a response to a specific request of an outsider, and “actively” when automatically made available to the public, for example, through a website.3 In the context of climate finance, transparency works as a structural principle. Article 11(2) of the Convention establishes that the financial mechanism shall have “a transparent system of governance.”4 However, the Convention does not elaborate further on the components and specifics of such a transparent governance system. The transparency standard, as applied to the resource allocation process of the Climate Funds, would consist of offering local stakeholders access to information related to a project or program. This information is necessary to expose the resource allocation process to public scrutiny. Furthermore, it enables local stakeholders to scrutinize proposed actions

1 Steffek and Nanz (n 118), 10–11; Kingsbury, Krisch and Stewart (n 113), 38–39; B. Kingsbury, ‘The Concept of ‘Law’ in Global Administrative Law (2009) 20 European Journal of International Law, 48–49; R.B. Stewart, ‘The Normative Dimensions and Performance of Global Administrative Law’ (2015) 13 International Journal of Constitutional Law, 252. 2 Kingsbury, Krisch and Stewart (n 113), 38; Stewart (n 113), 74. 3 Ibid. 4 Convention, Article 11.2.

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and identify potential negative impacts that a project or program might have on their livelihoods. Lastly, access to information empowers stakeholders to evaluate these impacts and assess whether these are due to a failure of compliance with the Funds’ policies. Transparency is imbued with a quantitative dimension which relates to the volume of information that shall be publicly disclosed. However, although the literature generally acknowledges the importance of disclosing decision-related materials and relevant documentation related to an issue and its proposed solutions,5 it is unclear how much of this information should be disclosed in order to be considered adequate. Transparency arrangements may vary significantly across global institutions in terms of their coverage, but overall, scholars contend that they may relate to “agendas, minutes or proceedings transcripts, proposed and final decisions, rules, standards, guidance documents, policy statements, reports, and internal documents and data collected by the organization.”6 This suggests that the Climate Funds should, at a minimum, disclose the project proposal and the funding decisions; the agendas of the meetings of the Boards and the minutes or proceedings transcripts with the deliberations for the adoption of decisions; rules, policy documents, and eligibility criteria; and environmental and social reports and technical reviews with the impacts of projects on local stakeholders. All this information should be subject to a general “active” provision to be routinely disclosed and made available to the public.7 Moreover, in climate finance, there is other, more specific information that should be disclosed to enable stakeholders to argue against or contest projects with potential adverse consequences. This includes detailed budgets for project-related activities implemented at the local level, the location of proposed projects, and the identity of potentially affected communities. Without this information, stakeholders would not be able to ascertain whether projects will affect them and to what extent, understand the costs of funded activities, and scrutinize how much finance is flowing to the PAs and for what purposes.8 Therefore, this information

5 Steffek and Nanz (n 118) 11; Kingsbury, Krisch and Stewart (n 113), 38. 6 Stewart (n 115), 258; Dany (n 133), 59. 7 Ibid.; Steffek and Nanz (n 118), 17. 8 For a similar argument see, Fenton et al. (n 112).

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should be included in the project proposals in order to foster sufficient transparency toward local stakeholders. As for the disclosure of information about global decisions, it is generally acknowledged that these should offer an “adequate record” of justifications for the regulatory choices made by decision-makers. These justifications should be provided in relation to those whose interests and concerns are affected, in accordance with the norms of the regime. However, this literature does not define what constitutes “adequate.” Instead, it seems to be assumed that it varies, depending on how transparent the global institution is.9 In the case of climate finance, an “adequate record” of the choices made by the Climate Funds in relation to local communities should consist of at least three things. First, project proposals should incorporate justifications in relation to their adherence to the environmental and social safeguards outlined in the policies of the Funds, particularly in relation to the risks and potential impacts on the interests and concerns of local stakeholders. Secondly, proposals should also provide justifications demonstrating that stakeholders’ inputs during consultations or noticeand-comment procedures have been adequately considered. Building on the arguments of the preceding chapter, proposals should at least provide evidence of stakeholder consultation, including those suggestions and concerns raised by these stakeholders. Moreover, proposals should also include responses and proof of consideration of these suggestions and concerns. And thirdly, the funding decisions should contain a record of the deliberations that led to the approval of the project or program and evidence that the comments of observers have been taken into account. Accordingly, there is an overlap with participation and transparency in that a requirement to disclose justifications in relation to the inputs of stakeholders and observers offers evidence that their concerns voiced during consultations or other participatory processes have been taken into account. It also provides a record that the Fund Secretariat can scrutinize in evaluating the adequacy of participation. Secondly, information presents a qualitative dimension related to the clarity with which it is presented. This is a pivotal aspect, for certain vulnerable groups may not have the technical capacities to access, let alone understand information and justifications, which could accordingly hinder

9 Stewart (n 113), 83; Stewart (n 115), 264–265.

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their ability to understand and evaluate projects and programs and their impacts on them. A few scholars have alluded to the necessity for global institutions to disclose ‘digested’ and ‘reliable’ information that can permit effective scrutiny of global decisions, suggesting that this information should be ‘properly integrated and interpreted,’ oriented toward stakeholders and ‘accessible’ by them.10 However, they do not define what ‘digested,’ ‘reliable,’ ‘properly integrated and interpreted,’ and ‘accessible’ mean. ‘Digested’ generally refers to understandable information,11 whereas ‘reliable’ relates to the accuracy of this information.12 In this setting, information related to a climate project or program should be conveyed to local stakeholders in a manner that ensures they may be understood and relied upon, in order to guarantee a comprehensive scrutiny of the project or program and its effects. Consequently, information should be available in a language familiar to local stakeholders, and technical concepts should be fully explained to ensure that stakeholders can understand the rationale behind the project or program, its relevance, and its potential impacts on their interests and concerns.13 Moreover, the concept ‘integrated’ relates to coordinating or combining information,14 whereas in order to be ‘accessible,’ information and justifications must be reachable.15 For information to be ‘properly integrated’ and ‘accessible,’ the literature emphasizes that their disclosure should take into account stakeholders’ needs, capacities, and resources.16 In keeping with this, the Climate Funds should ensure that the PAs inform local stakeholders about all relevant aspects of the project via information gatherings and workshops. This may be done during 10 A. Buchanan and R. Keohane, ‘The Legitimacy of Global Governance Institutions’ (2006) 20 Ethics & International Affairs, 259. 11 Cambridge Dictionary, Digested (2021) Cambridge University Press, https://dictio nary.cambridge.org/dictionary/english/digested, accessed 16 June 2021. 12 Cambridge Dictionary, Reliable (2021) Cambridge University Press, https://dictio nary.cambridge.org/dictionary/english/reliable, accessed 16 June 2021. 13 Schalatek (n 52) 963; O’Neill and Nicholson-Cole (n 110). 14 Cambridge Dictionary, Integrated (2021) Cambridge University Press, https://dic

tionary.cambridge.org/dictionary/english/integrated, accessed 16 June 2021. 15 Cambridge Dictionary, Accessible (2021) Cambridge University Press, https://dictio nary.cambridge.org/dictionary/english/accessible, accessed 16 June 2021. 16 Schalatek (n 52), 962; Shome and Marx (n 110).

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the consultation processes studied in the previous chapter before being offered the opportunity to express their views and interests. In these, stakeholders should be informed about proposed choices and policies comprehensively in order to be able to express their views and opinions. Moreover, all information should also be published on the Funds’ websites, in order to enhance general, easy, and equitable access to all relevant project or program-related information to any stakeholder via relatively low-cost channels.17 In the third place, transparency may be subject to restrictions under certain circumstances. In fact, some global institutions establish that information may not be disclosed pursuant to a transparency requirement due to costs, confidentiality, or pragmatic reasons.18 Regarding these restrictions, the costs associated with collecting, organizing, and providing information might sometimes be substantial enough to justify non-disclosure.19 But disclosing information related to the resource allocation process or the reasons underpinning a funding decision does not strictly require a bureaucratic exercise of collection or organization. Conversely, advancing transparency would predominantly involve the release of documents prepared in the course of adopting a funding decision, documents that already exist and of which the Funds are in possession. This means that the potential associated costs are residual at most. A second rationale for restrictions is based on the need to uphold confidentiality for security and law enforcement reasons, the privacy of involved parties, or government secrecy.20 Confidentiality has also been justified in order to prevent threats to the success of negotiations from interest groups who may mobilize to block global decisions.21 In the realm of climate finance, this could apply to instances where certain information may affect the security or privacy of a member of the Secretariat or the Council or Board of the Fund, or when it is covered by government secrecy in the applicant country.

17 For a similar argument see, Persson and Remling (n 90). 18 Ibid., 250–260; Steffek and Nanz (n 118), 16–17. 19 Stewart (n 115), 250–260; Kingsbury (n 283), 50. 20 Ibid. 21 Stewart (n 113), 68.

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The third basis for restrictions is founded on pragmatic considerations. These restrictions might be employed to facilitate effectiveness and better deliberations among decision-makers and enhance the ability of consensus-based deliberative processes.22 Some scholars suggest that restrictions may also be justified for expediency purposes, such as permitting the use of reasons that may not take into account public interests or which are too shallow.23 In the context of climate finance, these types of restrictions would relate to not disclosing the minutes and transcripts of Board and Council meetings, or holding closed sessions when public openness could compromise the adoption of a decision. Accordingly, information relating to deliberations may be kept secret, or Board or Council meetings may be held in closed sessions, with their recordings kept undisclosed. When this happens, as highlighted in the preceding chapter, observers may not be welcome to attend the decision-making meetings in which the approval of projects and programs is deliberated. This aspect further underscores the intersection between transparency and participation. Lack of disclosure of information should be justified based on the reasons that prompted the restriction.24 Without proper justification, lack of access to information or absence of representatives in the decisionmaking diminishes stakeholders’ capacity to understand a decision that can negatively affect their rights and interests. Additionally, the literature contends that global institutions may as well publish undisclosed information in a “passive” way upon request.25 In keeping with this, the Climate Funds should offer a mechanism for requesting information.

3

Transparency in the Climate Funds

Having explored the concept of transparency within the context of global institutions and its application to the Climate Funds, it becomes clear that this standard comprises at least three different dimensions: (1) the 22 Stewart (n 115), 260. 23 Kingsbury (n 283), 50. 24 For a similar argument, see, Transparency International (n 173), 6; See also, L. Elges, ‘Protecting Climate Finance. Progress Update on the Global Environment Facility’s Anti-Corruption Policies and Practices’ (2017) Transparency International. 25 For more on transparency in the global entities, see Kingsbury, Krisch and Stewart (n 113), 38; See also, Stewart (n 115), 258.

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nature and volume of information that should be disclosed to local stakeholders; (2) the clarity, intelligibility, and accessibility of this information; and (3) the justifications that shall be given when information is not proactively disclosed for confidential or pragmatic reasons. The chapter will now delve into the Climate Funds’ policies concerning each of these dimensions, aiming to ascertain whether and to what extent they might be adversely affecting local populations. In relation to the sufficiency of information, it will be determined whether and to what extent the Climate Funds are subject to requirements to disclose information. Do the Fund policies establish an obligation to publicly disclose all information related to a funding proposal? Which documents are susceptible to being disclosed? Do policies pose any obligation as to justifying potential risks or impacts on local stakeholders? As for the clarity and accessibility of information and justifications, it will be examined whether the policies mandate a qualitative approach to information disclosure. Are the Climate Funds subject to any obligation in relation to how information should be disclosed in order to make them understandable for local stakeholders? Are project and program documents and funding decisions disclosed in relevant local language(s)? How can stakeholders have access to these documents? Finally, the section will analyze the possible restrictions to disclose information to local stakeholders. Under what specific circumstances do the Funds restrict access to information? Do they offer any procedure for stakeholders to request access to missing or undisclosed information when needed? In order to answer all these questions, the overview of the policies will proceed Fund by Fund. The section will first assess the GEF policies on sufficiency, clarity, and accessibility, and the restrictions of information. When doing so, a clear distinction will be made in each of the three mentioned aspects (sufficiency, clarity and accessibility, and restrictions). The same analysis will then be followed in relation to the AF, and ultimately to the GCF.

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3.1

The GEF Funds

3.1.1 Sufficiency of Information Transparency is a structural principle of the GEF Funds.26 This can be inferred from the GEF Instrument, which stipulates that GEF-financed projects “shall provide for full disclosure of all non-confidential information.”27 The Policy on Public Involvement of the GEF adds that “there should be transparency in the preparation, conduct, reporting, and evaluation of public involvement activities in all projects.”28 The Policy on Access to Information subjects all information concerning a proposal to a general rule that it be disclosed, except for those cases in which this is expressly prohibited.29 As for the type of information that shall be publicly disclosed, this relates, among others, to: • Documents of any type—including paper, electronic, audio, or video recordings—prepared by the Council in the course of its official activities. This shall include joint summaries, funding decisions, and approval documents, meeting agendas, Council meetings,—which are webcast, and recordings archived—reports of Council committees, bodies, and working groups, and work program documents30 ; • Documents related to projects and programs, including proposals, letters of endorsement, Secretariat and technical reviews, Council and stakeholder comments on work programs, and terminal evaluations of completed projects.31 According to the template for project proposals, detailed budgets for funded activities and their locations should be included, along with the

26 The GEF procedures apply also to the LDCF/SCCF Council unless the LDCF/ SCCF Council decides otherwise. Where the LDCF/SCCF has not decided otherwise, the same policies apply. 27 See, the GEF Instrument, para. 5. 28 See, GEF Council (n 138), para. 9. 29 GEF, ‘Policy on Access to Information’ (2018) GEF Doc. GEF/C.55/06, para.

6(a). 30 Ibid., Annex I, 6, and Annex II. 31 Ibid., Annex II.

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identification of potentially affected communities.32 However, the policies do not address the disclosure of the minutes and transcripts of the deliberations of the Councils in relation to proposals, nor do they oblige to disclose the justifications behind the decisions made by their members. Yet, the Rules of Procedure of both Councils establish that, even if closed, Council meetings are to be summarized into a document that is publicly accessible. These summaries must provide a concise résumé of the main questions, discussions, and conclusions on the decisions they adopt with respect to a proposal, with Council members’ comments in anonymous form.33 Moreover, Council meetings are webcast, which implies that the deliberations are publicly accessible. Regarding justifications for the choices made in response to inputs raised through consultations, the previous chapter has highlighted that the GEF Funds’ policies place a procedural obligation upon the PAs to document stakeholders’ consultations34 and to prepare summary reports of stakeholder consultations describing “how they all are consulted with and engaged in the project.”35 However, the policies do not further specify the content of these summary reports, or whether they should include responses to the comments put forward by stakeholders, explaining whether they have or have not been taken into account, or the reasoning behind such decisions. Moreover, the GEF policies also require additional justifications for the choices made in project design. To be more specific, the Policy on Environmental and Social Safeguards lays down mandatory requirements for PAs to include environmental and social assessments in proposals.36 The risks associated with projects and programs, and their potential impact on local stakeholders, shall be identified and documented by PAs, which must justify the approval of the proposal in spite of these risks or impacts by establishing measures through which these can be avoided or prevented, 32 GEF, ‘GEF-7 Request for CEO Endorsement/Approval (For Child Projects and MSP One-Step)’ (2018) GEF, 2 and 10; See also, Chapter 3, Sect. 3.1.1. 33 In relation to the GEF Council see GEF (n 151), para. 46; In relation to the LDCF/SCCF Council, see GEF, ‘GEF Council Meetings’ (2020) GEF, http://www.the gef.org/gef/council_meetings, accessed 31 March 2020; See also, LDCF/SCCF Council Meetings’ (2020) GEF, https://www.thegef.org/council-meetings/ldcf-sccf. 34 GEF Council (n 167), para. 9. 35 GEF (n 116) paras. 37 and 41(a). 36 GEF Policy on Environmental and Social safeguards, paras. 5, 12.

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minimized, mitigated, or compensated for.37 This justification shall be then scrutinized by the Fund Secretariat, reported to the Council,38 and publicly disclosed to provide stakeholders with relevant information.39 3.1.2 Clarity and Accessibility of Information In relation to the clarity and accessibility of information, the 2017 Policy on Stakeholder Engagement stipulates that stakeholders should have access to “appropriate” and “relevant” documentation.40 Similarly, the Policy on Environmental and Social Safeguards establishes that PAs shall document the results of environmental and social screenings in relation to the risks and potential impacts on local stakeholders in order to provide these with “timely, relevant and understandable information about projects and programs.”41 However, the terms ‘appropriate,’ ‘relevant,’ or ‘understandable’ are not explicitly defined within these policies. Moreover, the Policy on Environmental and Social Safeguards further establishes that consultations shall be based on the prior disclosure of relevant, timely, and easily accessible information “in a culturally appropriate format, in relevant local language(s).”42 However, according to the Rules of Procedure, interventions at the Council meetings are made in English, French, and Spanish.43 Therefore, the policy seems to refer only to information relating to environmental and social assessments and reports, which shall be translated into the relevant local language(s). Finally, the GEF’s Guidelines for the Implementation of the Public Involvement Policy 44 establish that GEF project documents, policies, and procedures shall be disclosed in a manner that is accessible to stakeholders.45 On the one hand, the document establishes that consultations 37 Ibid., paras. 5, 11, and Annex I.A, para. 4(c). 38 Ibid., para. 13. 39 Ibid., Annex I.A, para. 4(h). 40 GEF, ‘Policy on Stakeholder Engagement’ (2017) GEF/C.53/05/Rev.01, paras. 6(a) and (e). 41 GEF Council (n 167), Annex I.A, para. 4(h). 42 Ibid., 7–8. 43 GEF (n 151). 44 GEF (n 116). 45 Ibid., para. 24.

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and workshops should be organized in order to reach stakeholders to inform them and receive feedback on the project design.46 More concretely, the national authorities of applicant countries should hold at least one meeting every year, and another at the beginning of each GEF replenishment cycle with interested CSOs to inform them about GEF projects and their opportunities for participation.47 Moreover, the Secretariat shall also invite CSOs to GEF workshops and conduct webinars to provide information on GEF activities.48 Ultimately, the policy establishes that information on proposals should be circulated to—and group sessions conducted with—those relevant stakeholders “that will be directly affected by or involved in the project.”49 However, how this information will be circulated is not mentioned. On the other hand, the policy document GEF Practices on Disclosure of Information 50 and the Policy on Access to Information establish that all information related to GEF projects or programs, policies, and procedures shall also be made accessible through the GEF website. 3.1.3 Restrictions on Information Disclosure Any decision to restrict information disclosure must be based on the list of restrictions provided by the Policy on Access to Information.51 This includes personal information of Council members, alternates, and advisers; information that may compromise any individual’s or the environment’s security, safety, or health; information received in confidence or communicated to the Council as confidential and barred from public access; information prepared by the Council as part of Executive Sessions or other deliberative information as decided by the Council; and information subject to attorney-client privilege.52 Accordingly, in addition to reasons for confidentiality relating to security or the privacy of involved parties, the deliberations of the Council for

46 Ibid., para. 40(a). 47 Ibid., para. 26 and 32. 48 Ibid., paras. 28 and 30. 49 Ibid., para. 40(c). 50 GEF Council, ‘GEF Practices on Disclosure of Information’ (2011) GEF/C.41/

Inf.03, para. 55. 51 GEF (n 311), para. 6(a). 52 Ibid., para. 8.

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adopting a funding decision, and any documents related to the exercise of that deliberation, may not be subject to the general rule of information disclosure if the Council deems it necessary to restrict access to enable better deliberations. While ‘deliberative information’ is not defined anywhere in the policy document, one could assume that this relates to the minutes and transcripts of the Council meetings, or other emails, notes, letters, or draft documents exchanged during the course of the Council’s deliberations. Accordingly, this information could to a large extent contain the justifications of the regulatory choices made by Council members. In order to exclude information on deliberations from public access, the Rules of Procedure for the GEF Council allow the Council to hold private sessions, or to not release this deliberative information, without explaining its reasons for so doing. Consequently, the Council is able to depart from the default position of having to disclose all information at its own discretion and without the need for justifications. The policy document foresees “exceptional circumstances” under which access may be granted, which should stand as ‘an exception to the exception’ to disclose all information. However, these circumstances are not further defined, and consequently, it is uncertain which considerations the Council may take into account for sessions and/or deliberative information to be accessible.53 Where information is not disclosed pursuant to any of the exceptions described above, the policy document foresees a procedure for requesting this information.54 However, the specific steps involved in this procedure are not very detailed. It is only stated that, following receipt of a request for information, the Council has ten business days to respond unless “additional time is required because of the nature, scale and scope of the request.”55 In the event that the Council denies the request, and excludes certain information from public access due to any of the mentioned restrictions, it shall inform the requester accordingly, although nothing is said about whether denial should be justified.56 For these cases, the policy document also contemplates an appeals mechanism for the

53 Ibid., para. 12. 54 Ibid., para. 6(c). 55 Ibid., para. 9. 56 Ibid., para. 10.

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requester, but it is unclear what form the appeals procedure takes. The policy only mentions that appeals should be considered by the Council in Executive Session at the following Council meeting.57 3.2

The AF

3.2.1 Sufficiency of Information Transparency is also a structural principle of the AF. In 2005, the COP 11 that established the AF decided that its operation shall be guided by “sound financial management and transparency.”58 In decisions guiding the establishment of the AF, the COP Serving as the Meeting of the Parties to the Kyoto Protocol (CMP) emphasized the need for transparency in the operation of the Fund.59 As part of its efforts to enhance transparency, in 2013, a formal public disclosure policy was adopted in the form of the Open Information Policy, which recognized the centrality of this standard for the Fund and its commitment to disclose information to local stakeholders60 and adopted a general rule to publicly disclose all information proactively, save for a compelling reason for confidentiality.61 As for the type of information that shall be disclosed, it includes: • Project or program proposals—to be published prior to Board approval for interested persons to comment on them; • The results of environmental and social screening and assessment— before stakeholder consultations; • Any significant changes to the project or program62 ; • Information relating to AFB meetings which are webcast, and recordings archived, working documents discussed during Board 57 Ibid., para. 11. 58 CMP Montreal, Decision 28/CMP.1. 59 Ibid., para. 3; CMP Nairobi, Decision 5/CMP.2, para. 1; COP Bali, Decision 1/

CMP.3, para. 17. 60 It states that the AF “is an organization committed to open access to information.

Transparency is essential to building and maintaining public dialogue, increasing public awareness, enhancing good governance, accountability, and ensuring programmatic effectiveness.” AFB, ‘Open Information Policy’ (2013) AFB/EFC.12/5/Rev.1, paras. 1 and 5 and Annex I, para. 1. 61 Ibid., para. 2. 62 AFB (n 176), para. 33.

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meetings, technical reports and recommendations, reports on the Board meetings, and funding decisions.63 The AF’s policies further require that proposals include the exact location of funded activities, their components, and specific budgets, as well as the identity of the potentially affected communities.64 However, these policies do not address the issue of whether minutes and transcripts of AFB deliberations over proposals should be disclosed. As for the disclosure of justifications for the choices made in project design, building on the previous chapter’s observation that AF’s policies on the notice-and-comment procedure are scant, they do not establish whether considerations of submitted comments shall be publicly disclosed.65 The policies on the documentation of consultations are more specific, as they establish procedural obligations requiring to PAs descriptions of the techniques that have been employed and the key suggestions and concerns raised by stakeholders, for Secretariat scrutiny.66 However, nothing is said about whether the Fund is required to respond to these suggestions and concerns, or whether it is required to justify which ones have or have not been taken into account and why. Yet, the AF’s environmental policy places more explicit obligations related to justifications on PAs. These obligations require PAs to identify and document potential risks of the projects on the environment, public health, or vulnerable communities,67 and categorize the proposal accordingly into three levels (A for diverse and irreversible impacts, B for fewer and reversible impacts, and C for those with no adverse impacts).68 If the funding proposal presents severe potential risks, an environmental and social assessment will be required to be submitted with the proposal, which shall include a risk management plan to avoid, minimize, or mitigate those risks. This shall be scrutinized by the Fund for approval, and

63 AFB (n 342), para. 4. 64 AFB (n 186), 2 and 8. 65 See, Chapter 3, Sect. 3.2.2; See also, AF (n 182); Harmeling and Kaloga (n 190),

2–3. 66 AFB (n 186), 8. 67 AFB (n 176), paras. 6 and 7. 68 Ibid., paras. 8 and 10.

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be publicly disclosed through the Fund’s website and to affected local stakeholders.69 In relation to the justifications for the choices made in decisionmaking, the Operational Policies and Guidelines for Parties to Access Resources from the Adaptation Fund (OPGs ) have placed an obligation on the Board to explain its decision to endorse, not endorse or reject concepts, or approve, not approve or reject fully developed proposals.70 In keeping with this, the AFB is required to disclose explanations, which can be found in the Board meeting reports. The discussions justifying decisions from Board meetings are summarized and made publicly available.71 3.2.2 Clarity and Accessibility of Information In relation to the clarity and accessibility of this information, the Open Information Policy establishes that, in order to promote accessibility, all project and program information shall be disclosed “in an easy to understand, graphical format.”72 Moreover, according to the OPGs , the Board’s explanations to endorse, not endorse, or reject concepts, or approve, not approve, or reject fully developed proposals, must be “clear.”73 However, no effort is made to better define “easy to understand” or “clear.” Furthermore, the Open Information Policy makes no reference to whether information should be disclosed in the local language of stakeholders. The working language of the AF is English, and its Board meeting documents are only available in this language, although the reports of the meetings are translated into all six official UN languages upon request by Board members or alternates.74 Finally, for accessing all this information, the AF policies do not specifically require workshops and meetings to inform stakeholders about

69 Ibid., paras. 9, 10, 30, 31 and 33. 70 AFB, ‘Operational Policies and Guidelines for Parties to Access Resources from the

Adaptation Fund (OPG)’ (2022) AF (hereinafter OPGs), para. 47(e). 71 L. Elges and C. Martin, ‘Protecting Climate Finance. An Anti-Corruption Assessment of the Adaptation Fund’ (2014) Transparency International, 38. 72 AFB (n 342), para. 3. 73 OPGs, para. 47(e). 74 AFB (n 186).

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projects or programs. However, the Environmental and Social Policy of the Fund establishes that PAs shall inform communities directly affected by the project or program of the results of environmental and social screenings for consultation.75 Likewise, the Revised Guidance Document for Project and Programme Proponents to Better Prepare a Request for Funding poses a procedural guarantee, requiring that project proposals include a strategy and timetable for sharing information with stakeholders for consultation.76 However, there is no indication of how this information shall be shared. At the same time, the AF offers an interactive mapping portal on its website where users can access full data on the projects and programs in the AF’s portfolio.77 3.2.3 Restrictions on Information Disclosure In relation to the exclusions from information disclosure, the Open Information Policy justifies them on the basis that in certain situations information disclosure can “have a negative impact on the Fund, the implementation of its projects and programs, or deal with the legal obligations pertaining to privacy or intellectual property.”78 To determine the existence of any of these causes, the AFB has established five main criteria. These provide for the exclusion of disclosure where it would harm the Fund’s relations with other governments or institutions; pose a risk to the security or safety of an individual; concern personal information; harm the AF or its partners’ or suppliers’ commercial interests; and contain information pertaining to the deliberations of the AFB and of technical bodies.79 Accordingly, together with reasons justifying confidentiality in relation to a particular funding proposal, the content of deliberations during AFB meetings is exempt from the general rule of information disclosure, if the AFB considers that restricting access is necessary. Again, ‘deliberative information’ is not defined anywhere in the policy document, but one could assume that this relates to the minutes and transcripts of the AFB meetings, or other emails, notes, letters, or draft documents exchanged 75 AFB (n 176), para. 33. 76 AFB (n 186), 8. 77 AFB (n 342), para. 4. 78 Ibid., para. 2. 79 Ibid., para. 3.

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during the course of the AFB’s deliberations. Therefore, this information could contain to a great extent the reasons underpinning the adoption of the funding decision. Consequently, while the approved decision is published, the AFB also has the power to not disclose the underpinning minutes, transcripts, or recordings of the meetings, or hold the Board Committee meetings in closed sessions. This is because, as the policy document explains, the Board votes by consensus, and therefore, “it needs room to develop that consensus,” which implies preserving “the integrity of its deliberative processes by facilitating and safeguarding the free and candid exchange of ideas.”80 However, the policies are not clear as to the concrete circumstances in which “developing that consensus” or “preserving the integrity of its deliberative processes” would make it necessary to depart from the default position of having to disclose all related information. Finally, there is neither a procedure to request information nor an appeals mechanism to challenge the rejection of a request to disclose information. If information is not proactively disclosed, it cannot possibly be requested. 3.3

The GCF

3.3.1 Sufficiency of Information Transparency is also a structural principle that guides the operation of the GCF. In the Governing Instrument of the GCF, it is stated that the Fund “will operate in a transparent and accountable manner.”81 To promote this, in 2016, the GCF Board adopted the Information Disclosure Policy of the Green Climate Fund with the aim of ensuring “the greatest degree of transparency in all its activities through the effective dissemination of information to stakeholders and the public at large.”82 In keeping with this, it set out the rules to “share the majority of the information in

80 Ibid., para. 10. 81 Governing Instrument, para. 3. 82 GCF Board, ‘Information Disclosure Policy of the Green Climate Fund’ (2016)

GCF/B.12/35, para. 1.

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its possession with stakeholders and the public at large,”83 except when information falls into a number of exceptions.84 As for the types of documents that shall be publicly disclosed, this includes: • Policy papers, project-related information, project and program funding proposals—as soon as submitted to the Board; • Project-related environmental and social reports and assessments85 ; • A summary of the activities related to the project or program— including their nature, scale, duration, and a summary of stakeholder consultations86 ; • Board meeting documents and proceedings—including Board meeting recordings, which are webcast and then archived; • And funding decisions87 (containing a summary of the activities, including their specific budget, location, and the intended beneficiaries).88 Regarding the disclosure of justifications for the choices made in project design, the GCF policies place a procedural obligation upon the PAs to meaningfully consult stakeholders and provide a plan with a summary of the consultations undertaken for the project or program and an Indigenous Peoples Plan with a summary of the outcomes and how the issues raised by these communities have been addressed.89 However, the policies do not further specify whether the plans shall include responses to concerns raised by stakeholders during consultations. Yet, the GCF Environmental and Social Policy imposes more explicit obligations related to justifications on PAs. These obligations involve screening and categorizing the potential risks and impacts of the proposal on local stakeholders, and justifying the approval of the proposal in spite 83 Ibid., para. 8. 84 Ibid., para. 6. 85 Ibid., paras. 15—18. 86 GCF Board (n 202), paras. 62 and 65. 87 GCF Board (n 364), paras. 15–18. 88 GCF Board (n 202), para. 65(a); GCF (n 223), Annex 2 and Annex 16. 89 See, GCF (n 223), section G.1; GCF Board (n 202), para. 65(c); For the indigenous

peoples, see GCF (n 205), para. 44; GCF Board (n 202), para. 18.

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of these risks or impacts. This may be achieved by adopting an environmental and social management system consisting of avoiding, minimizing, mitigating these risks, and providing remedies.90 These justifications and the environmental and social management system shall then be scrutinized by the Secretariat—which shall confirm that impacts and risks are adequately and properly addressed91 —and publicly disclosed and delivered to (potentially) affected local stakeholders.92 As for the disclosure of the justifications underlying funding decisions, the only reference is made in the policy document Procedures for adopting decisions in the event that all efforts at reaching consensus have been exhausted.93 In this document, it is only stated that “Board members may, after the results of a vote have been announced, make a brief statement to explain their vote.”94 However, the extent to which these statements should elaborate on the justification for the vote is not specified. Moreover, the Information Disclosure Policy offers the possibility of disclosing minutes and deliberative materials from Board executive sessions upon request.95 The policy establishes that these deliberative materials relate to emails, notes, letters, draft documents, or reports prepared during the deliberations of the Board with PAs, countries, its own staff, or other professionals.96 3.3.2 Clarity and Accessibility of Information The Information Disclosure Policy does not specifically address the clarity and accessibility with which all this information should be disclosed. It only makes reference to the fact that information shall “provide the public with a clear picture of the GCF’s work.”97 The Environmental and Social

90 AFB, (n 176), paras. 5(c), 8(f), 14(a)(i) and 39ff. 91 Ibid., paras. 11(b), (c) and (d) and 34. 92 Ibid., paras. 8(i) and 12(a); GCF Board (n 364), para. 17. 93 GCF Board, ‘Procedures for Adopting Decisions in the Event that all Efforts at

Reaching Consensus Have Been Exhausted’ (2019) GCF/B.23/03, Annex III. 94 Ibid., para. 22. 95 GCF Board (n 364), 8. 96 Ibid., para. 11(f). 97 Ibid., para. 7.

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Policy of the Fund mentions that information provided to local stakeholders will be disclosed in an “understandable format.”98 However, neither of the policies defines “clear picture” or “understandable format.” Moreover, the Environmental and Social Policy of the GCF further mandates that local stakeholders (potentially) affected by the activities shall be informed of the activities and related risks both in English and the local language(s).99 However, the rest of the information is posted in English, the only language in which the GCF operates.100 Finally, the Environmental and Social Policy also establishes that information will be made available both “in locations convenient to affected peoples” and through its website.101 In relation to the first means, it is uncertain what ‘convenient’ indicates, and how this information will be disclosed. However, the policy document establishes that stakeholders shall be informed in order to provide inputs on the design of the proposed activity.102 From this one could assume that stakeholders could be informed through workshops or similar events in order to facilitate their participation. As for the second means, Information Disclosure Policy establishes that all project or program information is proactively disclosed and should be accessible through the GCF’s website.103 3.3.3 Restriction on Information Disclosure The Information Disclosure Policy defines narrowly and clearly the exceptions to information disclosure.104 These include personal information or in relation to staff appointment; information subject to legal professional privilege, matters in a legal dispute, or that relates to grievance proceedings; communications involving members of the Board and advisers; information that would compromise the security, safety, or health of the GCF staff; confidential information related to the Board, Secretariat, any Accountability Unit, or the application of an entity for accreditation; deliberative information of the GCF Secretariat, Board or PAs; financial 98 GCF Board (n 202), para. 69. 99 Ibid., para. 62. 100 GCF Board, ‘Rules of Procedure’ (2013) GCF, para. 33. 101 GCF (n 202), para. 62. 102 Ibid. 103 Ibid., para. 15. 104 GCF Board (n 364), para. 6(b).

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information, or information of any of the organs of the Fund that may prejudice the interests of the GCF; and pre-meeting documents or video recordings of closed sessions.105 According to this list of exceptions, like the other Funds, deliberative information is, together with other confidentiality reasons related to a particular proposal, an exception to the rule of general disclosure. Therefore, when the GCF Board deems it necessary, deliberative information may not be disclosed because “it would damage the free flow of information and ideas.”106 However, unlike the rest of the Climate Funds, this type of information is defined in the policy document and encompasses minutes and emails, notes, letters, draft documents, or reports prepared during the deliberations of the Board with PAs, countries, its own staff, or other professionals.107 Accordingly, deliberative information could contain to a large extent the justifications underpinning the adoption of the funding decision. As with the GEF Funds, the GCF’s policies foresee the possibility of granting access to this information under some “exceptional circumstances,” which should stand as ‘an exception to the exception’ to disclose all information. But these circumstances are not defined, and therefore, it is uncertain which considerations the Board may take into account for disclosing this information. Consequently, the GCF Board is able to depart from the general rule to disclose all information, hold its meetings closed, and not disclose deliberative information, unless it determines that these non-defined exceptional circumstances occur. In the event that information should fall within any of the listed categories, the GCF shall make reference to it, and if requested, the requester shall be informed of the reason for such removal.108 The Information Disclosure Policy also establishes a procedure for requesting missing information. This may be done by contacting the Secretariat in writing or via email indicating the information required.109 The request can only be denied if any of the aforementioned exceptions

105 See, ibid., para. 11. 106 Ibid., para. 11(f). 107 Ibid. 108 Ibid., para. 10. 109 Ibid., para. 23.

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apply or if the information does not exist.110 The information disclosure policy further specifies the timelines for responding to requests—30 working days after the receipt of a written request, “unless additional time is required because of the scope or complexity of the information requested.”111 The GCF may decide to grant access to information that falls under any of these exceptions “if it determines that the benefit to be derived from doing so would outweigh the potential harm.”112 Finally, in order to have access to information where an initial request has been denied, the Information Disclosure Policy recognizes the right to have such a decision reviewed.113 To this end, the GCF offers an appeals mechanism through an Information Appeals Panel (IAP).114 Within 60 days from the notification of the denial of information,115 the requester may appeal to the IAP, which is authorized to recommend the upholding or reversal of prior decisions denying access to information within 30 working days from the receipt of the appeal.116

4

Critical Assessment of Transparency

Table 1 above outlines the key features of the transparency policies of each Fund. By examining these policies, it is clear that the Climate Funds have established various processes for the public disclosure of understandable information related to the resource allocation processes. Restrictions to disclosure predominantly revolve around considerations of confidentiality and pragmatism in the deliberative processes of decision-making. Building upon these policies and processes, the chapter will delve into a comparative assessment of the Funds, in order to uncover criticisms and best practices across all dimensions of transparency: the volume of information that is disclosed to local stakeholders, the clarity and accessibility of this information, and the justifications that are given when information is not disclosed due to confidential or pragmatic reasons. 110 Ibid., para. 24. 111 Ibid., para. 25. 112 Ibid., para. 12. 113 Ibid., para. 6. 114 Ibid., para. 28. 115 Ibid., para. 35. 116 Ibid., paras. 30–1.

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Table 1

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Transparency in the Climate Funds The GEF Funds

Sufficiency

Clarity and accessibility

Rule to disclose Yes all information Documents All but minutes Justifications No on consultations Justifications Yes on env/soc risks Justifications No— on decisions summaries Obligations

Local language Accessibility

Exceptions

Information

Request procedure Appeals procedure

4.1

The AF

The GCF

Yes

Yes

All but minutes No

All, minutes upon request Uncertain

Yes

Yes

Yes

No, brief statement—minutes upon request Clear and understandable

Appropriate, relevant, and understandable

Easy to understand, graphical, and clear Env/soc Only information English Workshops and Inform website those affected and the website Confidential Confidential and and deliberative deliberative Yes No Yes

No

Env/soc information In locations and website

Confidential and deliberative Yes Yes

Sufficiency of Information

Transparency is a structural principle of all Climate Funds, which have adopted a general rule to publicly disclose all information proactively except when information falls under a number of exceptions. This information includes project documents—such as proposals (including information about the specific budgets and location of activities), technical reports, and environmental and social assessments—and council documents—such as working documents, meeting agendas, and funding

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decisions. Furthermore, all Climate Funds webcast their Board or Council meetings, and the recordings are accessible from their respective websites. However, the literature has offered some criticisms on the transparency practice of the Climate Funds, such as the lack of information about the concrete flows of funding to certain projects and about the access to the minutes of Board and Council meetings.117 In relation to the GEF Funds, an examination of its project portfolio reveals that there is some information missing. By way of example, the GEF Trust Fund Outer Island Renewable Energy Project offers a summary of the project and the proposal, a technical report, various reports from the PA, and a project review sheet of the Secretariat.118 While subsequent implementation reports are more detailed, initial environmental and social risk evaluations contained within the project proposal do not provide any information about the detailed budgets for local activities, or the exact locations of these activities and the name of affected communities. For instance, the project proposal generally refers to building a solar hybrid mini-grid system in Niuatoputapu by using “[t]he investment costs of an additional GEF grant,”119 without any specification as to how much money would be employed for building the solar mini-grid system and in which part of the island of Niuatoputapu it would be built. This is only one of several projects that were randomly selected from the GEF’s portfolio database, and therefore, it is possible that many other GEF-funded proposals present similar flaws in terms of insufficiency of disclosed information. The GEF website further offers Council information such as the funding decision or the agenda of the meeting in which its projects or programs were approved.120 On the page of the meeting in which the Outer Island Renewable Energy Project was approved, there is only a brief summary of the project in the approved work program.121 However, 117 Fenton et al. (n 112). 118 GEF, ‘Outer Island Renewable Energy Project’ (2021) GEF, https://www.thegef.

org/project/outer-island-renewable-energy-project, accessed 22 April 2021. 119 GEF, ‘GEF-6 Request for Project Endorsement/Approval. Outer Island Renewable Energy Project’ (2017) GEF, 7. 120 For the Outer Island Renewable Energy Project, see, GEF, ‘GEF 53rd Council Meeting’ (2021) GEF, https://www.thegef.org/council-meetings/gef-53rd-council-mee ting, accessed 22 April 2021. 121 GEF, ‘Work Program for GEF Trust Fund’ (2017) GEF/C.53/13, para. 34.

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there is no information about the minutes, comments or proceeding transcripts in the adoption of the decisions. In this regard, the GEF policies do not establish an obligation to disclose this type of information. As a consequence, the only deliberative information about the project can be found in a document containing the highlights of the Council’s discussions prepared by the GEF Secretariat, which generally states that “[t]he Council welcomed the very impressive and large Work Program that showed good focal area diversity and geographic scope.”122 Regarding the AF, its policies do not differ much from those of the GEF Funds in terms of sufficiency of information. Yet, taking a closer look, it becomes evident that the AF demonstrates commendable transparency practices.123 All projects and programs, including those recently approved, have information available on the AF’s website.124 In most cases, there is only one file uploaded, but it offers all necessary information about the project or program. By way of example, taking another randomly selected case relating to the project Building Climate Resilience in Liberia’s Cocoa and Rice Sectors, the AF has publicly disclosed the proposal on its website,125 which offers a detailed description of the project or program context, objectives, activities with the expected finance, components and calendar, the implementation arrangements, and a full overview of the potential environmental and social impacts.126 Moreover, the AF further publishes the technical reports on

122 GEF, ‘Highlights of the Council’s Discussions. 53rd GEF Council Meeting’ (2017) GEF, para. 20. 123 For similar arguments, see e.g., Elges and Martin (n 353), 38; AF, ‘The Operationalization of the Adaptation Fund: Lessons Learned’ (2019) AF, https://www.adapta tion-fund.org/the-operationalization-of-the-adaptation-fund-lessons-learned/, accessed 27 December 2020; C. Bals, ‘Germanwatch: 10 Years of Active Civil Society Engagement in the Adaptation Fund’ (2017) AF, https://www.adaptation-fund.org/germanwatch-10years-active-civil-society-engagement-adaptation-fund/, accessed 27 December 2020. 124 See e.g., AF, ‘Adaptation to Climate Change and Resilience in the Montenegrin Mountain Areas-Gora’ (2023), https://www.adaptation-fund.org/project/adaptation-toclimate-change-and-resilience-in-the-montenegrin-mountain-areas-gora/, approved on 5 July 2023 and accessed on 25 July 2023. 125 AF, ‘Building Climate Resilience in Liberia’s Cocoa and Rice Sectors’ (2019) AF, https://www.adaptation-fund.org/project/building-climate-resilience-in-lib erias-cocoa-and-rice-sectors-2/, accessed 23 April 2021. 126 See, AF, ‘Request for Project Funding from the Adaptation Fund. Building Climate Resilience in Liberia’s Cocoa Rice Sectors’ (2019) AF.

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the project127 and Board documents related to the project.128 In this regard, the AF offers the best practice policy. However, it shall be noted that the AF’s policies do not establish an obligation to disclose the minutes and comments, nor transcripts of the AFB meetings. This information is notably absent in relation to the AF project in Liberia. The over four hours of recordings of the meetings are available on its website—although the part of the meeting in which the project was examined is not available, and therefore, there is no information about the discussion and approval of the project.129 In relation to the GCF, its policies are very similar to those of the rest of the Climate Funds. Additionally, information on all projects and programs is available on its website. To provide a concrete example, let’s consider the GCF’s Saïss Water Conservation Project, a USD 38.19 million project approved in 2017 to improve the climate resilience of agricultural systems in Morocco that is currently being implemented by the PA European Bank for Reconstruction and Development.130 The GCF has publicly disclosed the proposal on its website, which offers a detailed description of the project, the activities and the estimated financial costs and expenses, components and dates, and implementation arrangements.131 Furthermore, the website also offers access to a document with the environmental and social safeguards of the project.132 However, local stakeholders have voiced concerns regarding the lack of information on the affordability of access to water resulting from the project.133 While the project proposal is very specific as to the activities 127 AF, ‘Project/Programme Review Committee (PPRC)’ (2021) AF, https:// www.adaptation-fund.org/document-type/projectprogramme-review-committee-pprc/, accessed 23 April 2021. 128 AF, ‘Meetings’ (2019) AF, https://www.adaptation-fund.org/meeting/, accessed 23 April 2021. 129 AF, ‘35th.a/35th.b Intersessional’ (2019) AF, https://www.adaptation-fund.org/ meeting/35th-a-35th-b-intersessional/, accessed 23 April 2021. 130 GCF, ‘FP043. The Saïss Water Conservation Project’ (2020) GCF, https://www. greenclimate.fund/project/fp043, accessed 24 August 2023. 131 GCF, ‘Funding Proposal. FP043: Saïss Water Conservation Project’ (2017) GCF. 132 GCF, ‘Environmental and Social Safeguards. FP043. The Saïss Water Conservation

Project’ (2016) GCF. 133 GCF IRM, ‘Grievances and complaints. Initial Steps Report. GCF Project FP043—Saïss Water Conservation Project. IRM Case: C-0003-Morocco’ (2020) GCF Documentation.

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and expected results, it is true that it generally refers to “guaranteeing the affordability of water for farmers” in general terms without any reference to expected results in figures. This leaves room for improvement in terms of offering quantifiable expected outcomes. Lastly, the GCF has further disclosed Board documents, such as the agenda of the meeting, the funding proposal package of the project, and a report of the meeting with the minutes and deliberations including anonymous comments from Board members and observers.134 In this regard, the GCF’s policies also offer the best practice policy, as they explicitly offer the possibility to request the minutes of meetings and other deliberative materials in the event that these are not published. As for the disclosure of justifications in relation to the adherence of projects or programs to environmental and social policies, all Funds oblige proponents to study, justify, and plan remedies to avoid, mitigate, or compensate for potential environmental and social risks and impacts that may affect stakeholders. Drawing insights from the aforementioned case studies, it can be observed that these policies are generally implemented in practice, as all the corresponding proposals offer justifications for the potential risks and impacts of projects on local stakeholders. However, when it comes to stakeholder consultations, neither the GEF Funds nor the AF’s policies establish obligations to include responses or justifications in relation to the comments raised by stakeholders to explain whether they have or have not taken these into account and why. In this regard, the GCF offers a best practice policy, for it establishes procedural obligations requiring that the PAs evaluate whether stakeholders’ perspectives have or have not been taken into consideration and, crucially, to elucidate the reasons for these considerations. However, these requirements are exclusively directed at consultations with indigenous peoples. Additionally, the GCF also requires that the PAs consult stakeholders in a manner that enables them to respond to the concerns raised. However, the policies do not require these responses to be reflected in the proposals or the Secretariat to examine the adequacy or sufficiency of these responses. In practice, the aforementioned case studies do include information about stakeholders’ consultations. The Outer Island Renewable Energy Project mentions very specifically the issues discussed with local 134 GCF, ‘Report of the Sixteenth Meeting of the Board. 4–6 April 2017’ (2017) GCF/B.16/24, paras. 273–281.

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stakeholders. However, no responses are given to local stakeholders’ comments, and there is no indication of whether these comments have had any impact on the project’s design. For instance, women’s groups raised the need for streetlights and other community facilities, but these concerns are not addressed anywhere in the proposal.135 The AF’s project Building Climate Resilience in Liberia’s Cocoa and Rice Sectors reflects on the discussions held during stakeholder consultations in greater detail, in relation to the attendees and their circumstances, the topic of discussions, the comments raised, and the main findings. There were very serious gender, inequality, and poverty-related concerns raised. However, these comments are not answered or expressly addressed through a particular policy in the project nor is it mentioned whether these had any impact on the proposal.136 Moreover, nothing is said in relation to the notice-and-comment procedure of the project. There is no note of whether comments were received or, if they were, whether they were answered or had any impact on the proposal. Moving on to the GCF’s Saïss Water Conservation Project, several stakeholders were consulted during three site visits. However, no information is given in relation to the topics discussed and the issues that they raised. The proposal mentions that, as a consequence of these consultations, a number of recommendations have been designed to set out how (potentially) affected stakeholders will be involved in the implementation of the project.137 But this outcome is very vague, and no further details have been given. Against this backdrop, it was not possible to examine whether comments and concerns raised by stakeholders were effectively addressed, and the impact that these had on the proposal. Yet, the fact that the proposal offered assumptions in relation to the willingness of local farmers to pay for the water provision, and yet, that it raised complaints among stakeholders as this section has reflected above, reveals that these were not taken very seriously.138

135 Ministry of Finance and National Planning, Government of Tonga, ‘TON: Outer Island Renewable Energy Project Additional Financing’ (2018) ADB, 23. 136 AF (n 408), Annex 7. 137 GCF (n 413), E.5.3. 138 GCF Watch, ‘FP043 Saïss Water Conservation Project (EBRD), Morocco. CSO Comments on the Project Given as Intervention during the 16th GCF Board Meeting, April 2017’ (2017) GCF.

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In relation to decision-making justifications, only the AF’s policies oblige its Board to give a “clear explanation.” However, no further clues are given as to what a “clear explanation” means, and how and to what extent this information should be shared publicly. As mentioned above, the minutes and transcripts of the AFB decision in which the AF project Building Climate Resilience in Liberia’s Cocoa and Rice Sectors was approved have not been disclosed. While board meetings are summarized and published, these do not provide exact information about the strengths and weaknesses of proposals, about comments raised by observers,139 or about the scoring of proposals on the criteria of the Fund are disclosed.140 The same is true in relation to the other Funds. While the GEF Funds do not incur an obligation to explain the reasons underpinning their funding decisions, they are obliged to publish information about the main questions, discussions, and conclusions raised during the meetings. However, nothing is said about the extent to which these discussions and conclusions shall be reflected in the published documents or the disclosure of reasons underpinning the decisions. In this regard, the case study of the Outer Island Renewable Energy reveals that published information does not include detailed minutes with comments raised by observers and their responses and does not mention the particular scoring of proposals. Accordingly, it is difficult to understand both the impact of the interventions of observers and the justification underpinning the adopted decisions. Finally, the GCF policies simply permit the Board members to “make a brief statement to explain their vote.” This does not place an obligation upon Board members but rather offers them the possibility to justify or explain their vote. However, the Fund offers a best practice policy, for it discloses the minutes of the Board upon request. Moreover, the practice of the Fund reflected in the case study of the Saïss Water Conservation Project demonstrates that the minutes and deliberations are publicly disclosed even if there is no request. However, these do not include considerations on how the comments made by Board members and observers are considered, how the applications have been scored, or how the criteria have been weighted. In this context, the

139 For a similar argument, see Elges and Martin (n 353), 38. 140 For a similar argument, see Fenton et al. (n 112); See also, Persson and Remling

(n 90), 488–506.

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CSO GCF Watch complained about the budgetary resources for community involvement and demanded the elaboration of a clearer stakeholder engagement plan with better-defined roles of stakeholder participation and more affordable water tariffs.141 Nevertheless, there are no signs of these comments having been considered. 4.2

Clarity and Accessibility of Information

In relation to the clarity of disclosed documents, the Climate Funds make vague references to disclosing understandable information, without any clear explanation as to the means through which this should be done. In practice, empirical evidence from a survey offered to local stakeholders on GEF governance, conducted by the Independent Evaluation Office of the GEF, suggests that the Fund offers inadequate clarity and communication regarding programming decisions, project selection, review criteria, the initial preparation of the integrated approach pilots in GEF-6, and the GEF-7 impact programs.142 Interviews conducted with local stakeholders during an independent evaluation of the AF by TANGO International reveal that they do not really understand the overall projects, but rather only small parts of them or related activities.143 Another study from Germanwatch suggests that stakeholders often face challenges in understanding lengthy project proposals from the AF, which can span several hundreds of pages.144 And finally, the Independent Evaluation Unit of the GCF also suggests from a survey of stakeholders that the language and procedures of the Fund are complex.145 Indeed, disclosed information in the aforementioned case studies is accumulated in several extensive documents that make use of technical language—such as “polychlorinated biphenyl,” “photovoltaic panel,” or “chlorofluorocarbons”— for which there are neither definitions nor explanations. 141 GCF Watch (n 420). 142 GEF IEO, ‘The GEF in the Changing Environmental Finance Landscape. Draft

Final Report of OPS6 (Sixth Comprehensive Evaluation of the GEF)’ (2017) GEF/ME/ C.53/Inf.01, xi. 143 TANGO International and ODI (n 87), 27. 144 Grimm, Weischer and Eckstein (n 127), 34. 145 GCF IEU, ‘Independent Evaluation of the Adaptation Portfolio and Approach of the Green Climate Fund. Final Report’ (2021) GCF, 45; For a different study, see also, Lottje et al. (n 106), 12.

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With regard to the language in which information is disclosed, only the policies of the GEF Funds and the GCF establish that documents should be made available in the relevant local language. However, these documents relate exclusively to environmental and social assessments. The rest of the project or program and Board or Council information is disclosed mainly in English. This is also evident in the case studies, where all information published on the Funds’ websites is only available in that language. Among the PAs’ websites, only that of the GCF’s Saïss Water Conservation Project offers information on the environmental and social safeguards of the project also in French.146 However, French is only a secondary language in the recipient country, whereas the main languages that local stakeholders speak in the area of implementation of the project are Tamazight and Arabic. This can present a serious burden for many local stakeholders, as obtaining certified translations is time-consuming, expensive, and prone to error given that local translators rarely have a strong command of technical terms.147 Finally, in relation to the accessibility of information, all Funds’ policies require that local stakeholders are directly provided with all relevant information on the projects or programs. In this regard, the GEF Funds offer a best practice policy, for they specify a minimum number of workshops and information-gathering sessions that shall be organized. In contrast, the AF and the GCF require more vaguely that stakeholders are informed about proposals. However, although none of these Funds establish more concretely how project or program information shall ultimately be circulated, there is no record of projects or programs in which these sorts of events were not held. Moreover, all Board and Council documents pertaining to projects and programs are publicly accessible on the Funds’ respective websites. However, when it comes to the GEF Funds, Council and project information is not integrated. In order to have access to Council information, one must access the GEF Council’s page and search for the specific meeting in which the decision was adopted. Going back to the example of the Outer Island Renewable Energy Project, the Council documents were adopted

146 EBRD, ‘Environmental and Social Safeguards. FP043: Saïss Water Conservation Project’ (2016) GCF Documentation. 147 TANGO International and ODI (n 87), para. 135.

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during the 53rd GEF Council Meeting,148 although this is mentioned nowhere in the project documentation. Also, while the recordings of the GEF Council meeting are publicly available, they are divided into four videos that last for over 23 hours and 20 minutes. The discussion of the work program alone lasts for one hour and a half.149 Accordingly, while watching the discussion is possible, it is significantly harder to find information through observation compared to navigating documents if the minutes of meetings and deliberative materials were to be publicly disclosed. In relation to the AF, the technical reports are disclosed separately on pages of the Fund website that are different from those of the project documentation,150 and the dates of each document do not always coincide. For instance, following the example of the project Building Climate Resilience in Liberia’s Cocoa and Rice Sectors, the proposal was adopted in December 2019, whereas its official technical report can be found within the document Proposal for Liberia, which was published in June 2020.151 Similarly, Board documents are also disclosed on a different website and with different timelines.152 The project in Liberia was approved in the 35th Board meeting, in November 2020.153 Moreover, the videos of the meetings last for over four hours, without a clear indication as to which parts of the meeting took place in which minute of the video recording. Therefore, one needs to go through the whole recording to realize that the videos of the inter-sessional meeting in which the project was examined are not available. Overall, one must navigate and search through a myriad of Board meetings, reports, and recordings to find relevant information about a project. As for the GCF, the related Board documents are published on a different page from one of the projects or program information. However, the GCF offers a best practice policy, for the page of the project offers

148 GEF (n 402). 149 GEF, ‘53rd GEF Council Day 3 Nov 29, 2017’ (2017) YouTube, https://www.

youtube.com/watch?v=XGIQYeuozlY&t=25342s, accessed 22 April 2021. 150 For the AF project in Liberia, see AF (n 409). 151 AFB, ‘Proposal for Liberia’ (2020) AFB/PPRC.26.a–26.b/38. 152 AF (n 410). 153 AF (n 411).

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a link that directs the user to the relevant Board meeting and its documents.154 Moreover, the videos of the meeting are divided into topics, which offers the possibility of directly accessing the part of the meeting recording in which the user is interested.155 Accessibility is further enhanced by the fact that each video offers, at the same time, the possibility to navigate through the slides that were employed during the discussion, and by clicking on them, the video plays the part of the discussion related to that slide. 4.3

Restrictions on Information Disclosure

All Climate Funds establish in their policies exclusions from information disclosure. While lack of disclosure information must in all Funds be based on a listed restriction, Fund policies are not clear as to why information should not be disclosed. The AF policies declare that the AFB needs to develop a consensus for which it should preserve “the integrity of its deliberative processes by facilitating and safeguarding the free and candid exchange of ideas,”156 whereas the GCF establishes that disclosing deliberative information may “damage the free flow of information and ideas.”157 Yet, both “the integrity of the process” and “the free flow of information and ideas” are vague concepts, and it is unclear when the Boards and Councils of the Funds would consider it necessary to make an exception to the general rule to disclose all information and restrict access to their deliberative information. Moreover, when these exceptions are considered applicable in the context of a concrete project or program, and it is consequently decided to hold closed decision-making sessions or not to disclose information, the Funds are not obliged to provide any justification under their policies. Against this backdrop, civil society research has criticized the Climate Funds for (1) not justifying when decision-making is carried out in 154 For the GCF’s Saïss Water Conservation Project, see, GCF, ‘Sixteenth Meeting of the GCF Board (B.16)’ (2021) GCFhttps://www.greenclimate.fund/boardroom/meetin g/b16, accessed 23 April 2021. 155 For the GCF’s Saïss Water Conservation Project, see, GCF, ‘Sixteenth Meeting of the GCF Board (B.16). Videos’ (2021), https://www.greenclimate.fund/boardroom/mee ting/b16#videos, accessed 5 May 2021. 156 Ibid., para. 10. 157 Ibid., para. 11(f).

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closed sessions158 or (2) for the fact that non-disclosure of information is insufficiently justified.159 In relation to the former set of criticisms, in practice, the GEF Council does not enter into closed sessions frequently.160 However, a study published by Germanwatch has revealed that the number of closed AFB sessions has increased, excluding the public without explanation.161 The same occurs with the GCF Board, which frequently opts to close its meetings.162 Against the backdrop of the fact that in most cases observers are not allowed in closed sessions, as the previous chapter has revealed, restrictions on transparency negatively affect stakeholder participation. Given the fact that none of the Funds explain their reasons for holding closed sessions, they offer inconsistent and discretionary approaches to closed meetings that impair both standards.163 As for the second set of criticisms regarding the lack of information disclosure, local stakeholders have noted that recourse to exceptions can be widespread, especially in relation to commercial sensitivity or damage to business interests.164 When this occurs, usually no justifications are provided. By way of example, it has already been observed that the parts of the recordings of the AFB meeting in which the project Building Climate Resilience in Liberia’s Cocoa and Rice Sectors was discussed before being approved have not been disclosed. Yet, no reasons have been given as to why this information is not publicly accessible. For these situations, the GEF Funds and the GCF offer a best practice policy, as they introduce an exception to non-disclosure of deliberative information in relation to certain “exceptional circumstances.” However, these circumstances have not been further detailed, and there is not enough evidence to ascertain when the Councils and Board may decide that these are present. 158 In relation to the GEF Funds, see Elges (n 306); Regarding the AF, see Lorimer, Masao and Grimm (n 200), 14; For the GCF, see Transparency International (n 173), 20. 159 In relation to the AF, see Elges and Martin (n 353), 35; See also, Lorimer, Masao and Grimm (n 200). 160 Elges (n 306), 7. 161 Grimm, Weischer and Eckstein (n 127), 34. 162 Transparency International (n 173), 20. 163 For a similar argument, see Transparency International (n 110), 2. 164 Amerasinghe et al. (n 52), 54.

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Finally, unlike the other Funds, the AF does not provide a process to request information, nor an appeals mechanism. This means that information can only be disclosed proactively and that there is no procedure through which applicants may be allowed to challenge the absence of information related to the project or program. Accordingly, it is not possible to request the AF to furnish the missing recording of the AFB meeting in which the Building Climate Resilience in Liberia’s Cocoa and Rice Sectors project was discussed before being approved. This can have important negative impacts on local stakeholders. For instance, it has been argued that even though the GCF’s Saïss Water Conservation Project offered very detailed information in relation to the funded activities and expected results, this information was not entirely useful for local stakeholders, who complained about the lack of information on the affordability of access to water resulting from the project.165 Without an appeals mechanism, local stakeholders would not have been able to request the GCF information that was crucial for them to evaluate the potential impacts of the project.

5

Final Remarks

The chapter has explored the conditions in which the transparency of the Climate Funds might be deemed insufficient, and the potential implications for the rights and interests of local stakeholders. By examining the standard of transparency within global institutions, the chapter has elucidated how the Climate Funds should disclose project-related information to local stakeholders and has highlighted shortcomings in their policies that contribute to the adverse effects experienced by local populations. Drawing insights from the existing literature on transparency in global institutions, it can be deduced that individuals should have access to all non-confidential information about a project or program. This access is crucial for them to gauge the potential impact of global decisions on their livelihoods. Of particular importance is the availability of detailed information about budget allocations of implemented activities, the location of these activities, and the identity of potentially affected communities. In a similar vein, justifications shall be provided to demonstrate adherence of projects to the internal norms of the regime the (lack

165 GCF IRM (n 415).

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of) consideration of individuals’ inputs and the nature of the deliberations that led to the approval of the decision. Moreover, information should be understandable (and thus disclosed in a language that individuals can comprehend), accurate, coordinated, and accessible through either information-provision gatherings or the internet. Lastly, deliberative information should not be restricted unless it may compromise the adoption of the global decision, and if so, both explanations of the non-disclosure and a summary of the deliberations should be provided. In light of this, the chapter has conducted a thorough analysis of transparency practices within the Climate Funds and highlighted good practices. Based on this analysis, it can be concluded that the Funds’ transparency policies are developed to a certain extent. Even though they have different policies, all five Funds have guidelines in place that promote transparency by requiring the public disclosure of nonconfidential information related to the resource allocation process and Board or Council meetings. Restrictions to disclosure are mainly due to confidentiality concerns or pragmatic reasons. The former is related to security and law enforcement, privacy of involved parties, or government secrecy, and depends on each project or program. ‘Pragmatic’ non-disclosure relates mainly to protecting the deliberative processes of decision-makers. Furthermore, project proposals include justifications in relation to the risks and potential impacts on individuals, and summaries of most decision-making meetings are made publicly available. All the Funds present best practices, although the AF has the fewest in comparison. It discloses technical reports on the projects and programs, and its policies oblige the AFB to give a “clear explanation” in relation to funding decisions. The GEF Funds offer best practice policies with regard to disclosing environmental and social policies in the local language; setting a minimum number of information gatherings; establishing an ‘exception to the exception’ to disclose restricted information “in exceptional circumstances”; and offering both a request and an appeals procedure for undisclosed information. The GCF is the Fund that offers the greatest number of best practice policies. It offers the same best practice policies as the GEF Funds, except for establishing a minimum number of information gatherings. Additionally, the GCF may further disclose the minutes of Board meetings and other deliberative materials upon request; it requires the PAs to evaluate whether indigenous peoples’ inputs have been taken into account; its website offers linkages between Board and project documents; and the recordings of Board meetings are

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divided into topics, which offers the possibility of directly accessing the relevant part of the meeting. These practices enable local stakeholders to access information about the projects and funding decisions, and to understand and evaluate whether potential risks and impacts are due to a failure of compliance with the Funds’ policies to varying degrees. However, the chapter’s critical assessment also reveals that the Funds still fall short in their efforts to fully incorporate the transparency standard and its different dimensions regarding sufficiency, clarity, and exceptions to disclosure. Overall, local stakeholders do not receive sufficient information on aspects such as the detailed budgets for local activities, the exact locations of these activities, the identity of potentially affected communities, or the strengths and weaknesses of proposals. Furthermore, Council or Board information does not usually include the minutes or transcripts of deliberations in most cases. Disclosed information lacks clarity given the fact that in most cases they are only available in English and are contained in lengthy documents laden with complex and highly specific language. Moreover, project or program and Council or Board information are disclosed on different pages of the websites. The Funds also neglect to specify when or why information shall not be disclosed, and the AF offers neither a process to request such information nor an appeals mechanism. These circumstances significantly undermine the rights and interests of local stakeholders. At the forefront of these challenges is the issue of insufficient disclosure of essential information, such as detailed budgets, project locations, and potentially affected communities. As exemplified by the GEF Trust Fund Outer Island Renewable Energy Project, this information gap significantly limits the exposure of projects to public scrutiny, hindering stakeholders’ ability to gauge the potential repercussions that these projects may have on their lives and surroundings and implement preventive measures. Moreover, this opacity presents a barrier to local stakeholders’ capacity to track and evaluate the specific performance of the Funds on project design and approval. This impedes them from taking corrective action when negative impacts arise due to non-compliance with the Funds’ policies, which points to an overlap between transparency and accountability. Fundamentally, the ability of local stakeholders to ensure that climate projects have no negative impacts on them (or if they do, that this is not due to a failure of compliance with the Fund policies) is contingent upon

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their ability to access information about the projects and funding decisions. For instance, in the case where the AF project Addressing Climate Change Risks on Water Resources in Honduras were to result in adverse consequences, local stakeholders would have lacked the capacity to verify whether the mandated consultations had indeed been carried out. Lastly, the lack of clarity and accessibility of information compromises local stakeholders’ ability to understand both the projects themselves and the decisions made by the Funds. This has clear repercussions on participation, illustrated by the way insufficient or ambiguous information impedes stakeholders from meaningfully engaging with informed inputs in the project design. Additionally, the lack of access to the minutes or transcripts of deliberations not only curtails local stakeholders’ ability to ensure the alignment of projects with the Funds’ policies but also obstructs their capacity to scrutinize and challenge the reasons underpinning decisions. To delve deeper into the intricate relationship between the Climate Funds’ policies and their effects on the rights and interests of local populations, the subsequent chapter will extend this analysis by exploring the Funds’ policies on accountability. Have the Climate Funds established accountability mechanisms capable of reviewing projects implemented with inadequate stakeholder participation or transparency? Can these mechanisms effectively mitigate the negative repercussions that projects might have on local stakeholders? By seeking answers to these questions, the next chapter will further illuminate how the effects of accountability, transparency, and participation converge, culminating in a more holistic understanding of the multifaceted challenges faced by local populations based in recipient countries.

CHAPTER 5

Accountability in the Climate Funds

1

Introduction

The final set of academia’s criticisms regarding the detrimental impacts of the Climate Funds on the rights and interests of local stakeholders revolves around the accountability mechanisms of these Funds. The literature review in Chapter 2 reflects that some scholars link the adverse effects of climate projects to the limited responsiveness of these mechanisms and their inadequacy in addressing the concerns of affected individuals. Indeed, there is little evidence suggesting that the negative impacts of the climate adaptation and mitigation projects exemplified in previous chapters have been rectified in any significant manner. This indicates that individuals affected by such projects may lack adequate avenues to have the related funding decisions reviewed and be offered remedies. Had local stakeholders been afforded the opportunity to subject projects and programs to scrutiny and be offered remedies for the negative impacts endured, the infringement upon their rights and interests could have been mitigated. Therefore, deficient accountability mechanisms within the Climate Funds may have, to a certain extent, contributed to the detriments of their livelihoods and endured the consequences they continue to grapple with. While the literature has criticized the shortcomings in the Funds’ accountability to local stakeholders, it remains unclear when the related

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 G. Larrea, Climate Funds and Sustainable Development, Sustainable Development Goals Series, https://doi.org/10.1007/978-3-031-50218-7_5

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mechanisms may be considered inadequate, and how this inadequacy results in detrimental effects on the rights and interests of these stakeholders. How should the Funds’ accountability mechanisms redress negative impacts incurred by individuals in recipient countries? What remedies should they offer in the event local stakeholders are found to be adversely affected by a climate project? And how should these remedies be accessed by local stakeholders? In addition, a significant gap exists within the literature—the lack of a rigorous and comprehensive comparative analysis of accountability mechanisms across all the Climate Funds. This hinders the ability to identify and compare good (and less good) practices among these Funds, and subsequently formulate well-informed recommendations aimed at improving and refining the accountability mechanisms of these Funds. The chapter will begin by examining the standard of accountability as put forward by the literature on global institutions. Can individuals request the review of global entities’ decisions, and if so, how? Are the accountability mechanisms’ decisions binding or enforceable? Do these mechanisms examine compliance with the internal norms of global entities, or can they address any negative impacts, regardless of whether the latter adheres to their policies? The insights drawn from this review will be subsequently applied to the realm of climate finance, in order to establish a benchmark against which the policies of the Climate Funds can be assessed to determine whether they adequately promote accountability to local communities. Finally, the chapter will offer an in-depth comparative analysis of the Funds’ policies on all dimensions of accountability, such as accessibility and the legal status of accountability mechanisms’ decisions and remedies. This analysis will provide novel perspectives on the potential ramifications of the accountability mechanisms of the Climate Funds on local stakeholders. These accountability mechanisms have not been used much to date as they were established only a few years ago. Since then, their main focus has been institution-building. Likewise, the literature examining these mechanisms is growing, but so far little research has been conducted on them as working institutions. Accordingly, it is difficult to ascertain the kind of problems that may arise in relation to their practice, and how they may be able to promote accountability to local stakeholders. However, the World Bank’s Inspection Panel, another mechanism reviewing funding decisions that operates at a fund level, can shed light on the practice of the accountability mechanisms of the Climate Funds. As

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the chapter demonstrates, this is because some of their policies and procedures are similar and, since the Inspection Panel was created in 1993, it has been more extensively used and scrutinized. Accordingly, the Panel’s experience could be useful in understanding how the accountability mechanisms of the Climate Funds could operate in practice, at least insofar as their policies and procedures are similar in nature. For these reasons, the chapter will supplement its analysis of the mechanisms of the Climate Funds with a comparative analysis of the Inspection Panel.

2 Content and Scope of Accountability in Climate Finance The concept of accountability has received considerable attention within scholarly discourse, having been explored from multiple perspectives.1 Various authors have examined accountability in the domestic context,2 while others have done so in the context of global governance,3 international organizations,4 and regulatory administrations.5 However, there is no common definition of the concept of accountability in international law and, in many cases, the literature fails to offer a clear and concise definition. Yet, there is wide agreement on the fact that accountability is fundamentally a relational concept involving two key actors, an ‘account holder’

1 D. Curtin and A. Nollkaemper, ‘Conceptualizing Accountability in International and European Law’ (2005) 36 Netherlands Yearbook of International Law, 5; R.W. Grant & R.O. Keohane, ‘Accountability and Abuses of Power in World Politics’ (2005) 99 American Political Science Review, 29; R. Mulgan, “‘Accountability”: An-Ever-Expanding Concept? (2000) 78 Public Administration Review, 555; Stewart (n 115), 244–246. 2 See in general, M. Bovens, ‘Analysing and Assessing Accountability: A Conceptual Framework’ (2007) 13 European Law Journal; See also, R. Mulgan, Holding Power to Account: Accountability in Modern Democracy (2003) Palgrave Macmillan; J.L. Mashaw, ‘Structuring a “Dense Complexity”: Accountability and the Project of Administrative Law’ (2005) 5(1) Issues in Legal Scholarship. 3 Grant and Keohane (n 448), 30. 4 Curtin and Nollkaemper (n 448), 83. 5 C. Scott, ‘Regulation in the Age of Governance: The Rise of the Post-Regulatory

State’ in J. Jordana & D. Levi-Faur (eds.) The Politics of Regulation: Institutions and Regulatory Reforms for the Age of Governance (2004) Edward Elgar, 145.

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and an ‘account giver.’6 This relationship consists of the former, the account holder, calling upon the account giver to justify his prior conduct and to provide some form of remedy for deficient performance by reference to a set of standards that vary according to the setting.7 Drawing from this literature, an assessment of the accountability of the Climate Funds involves an evaluation of whether, and to what extent, the Funds are accountable to local stakeholders who are affected or have the potential to be affected by their funding decisions, with accountability being judged by reference to a set of standards. The literature has identified different accountability mechanisms through which account holders can demand justifications from account givers for their actions.8 Some of these include electoral accountability—whereby the prospect of reelection is contingent upon officeholders’ performance meeting the expectations of voters—hierarchical accountability—where superiors have the right to evaluate and sanction their subordinates—or supervisory accountability—where a grantor of authority delegates authority to a grantee, and can hold the latter accountable by either revoking or not renewing the delegated authority.9 The most conventional accountability mechanism is legal accountability, which arises when the conduct of an actor (the account giver) is evaluated by reference to legal standards. The standards of deficient conduct are defined by the law, which determines when an account holder may be able to bring legal action against an account giver.10 The account 6 Stewart (2014) 245–246; Keohane similarly distils from a literature review that the concept is generally employed in a relational manner. See, R.O. Keohane, ‘The Concept of Accountability in World Politics and the Use of Force’ (2003) 24(4) Michigan Journal of International Law, 1124. 7 According to Stewart, there is wide consensus on the fact that accountability mech-

anisms include at least these three key elements: (1) an account giver who is called to provide an account; (2) an account holder who is empowered to require an account giver to justify his prior conduct and (3) the availability of some sort of remedy in the case of deficient performance which entails negative consequences for an account giver. See, Stewart (n 115); Ruth Grant and Robert Keohane argue that another key element of accountability consists of a set of standards according to which the conduct of the account giver can be evaluated. See, Grant and Keohane (n 448), 29. 8 Some of these are electoral, hierarchical, supervisory, fiscal, legal, market and participatory accountability. For more on these mechanisms see e.g., ibid., 246–248; See also, Keohane (n 453), 1131–1134. 9 Stewart (n 115). 10 Ibid., 246.

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holder may come in the form of a court, tribunal, or a review body, which may be empowered to impose a sanction when the conduct in question is found to be unlawful.11 The entitlement to have deficient conduct of an entity evaluated by an independent third party is being mirrored in some global institutions, which have established review mechanisms that receive complaints in relation to their own activities. A few examples include the World Bank Inspection Panel or the Court of Arbitration for Sport.12 These mechanisms can potentially be considered as legal accountability mechanisms, as they enable outsiders to bring legal action against global entities in a reviewing body, which assesses the existence of an infringement and provides a remedy as outlined in the internal regulations of the respective global entity.13 However, these types of review mechanisms are generally absent in global regulatory regimes or rudimentary at best. This is because, despite some exceptions such as the WTO, the UN Convention on the Law of the Sea and certain human rights tribunals, power to review compliance and make authoritative determinations is rarely ceded to third bodies.14 Members and officials of many global administrations generally oppose measures to increase independent review which can be costly or potentially impair flexibility, or otherwise not contribute much to the overall performance of the regime.15 Against this backdrop, most global regimes have been built without robust reviewing bodies capable of promoting legal accountability. The literature is vague as to the kinds of review mechanisms that global entities should establish to promote this legal accountability. In general, the term “review” might suggest a kind of judicial body. However, other types of institutional mechanisms capable of examining complaints could also be included, such as an assembly, an executive board, or a legal counsel of an organization, or a separate institution overseeing and interpreting the decisions of a body.16 11 Ibid. 12 Kingsbury, Krisch and Stewart (n 113), 39–40. 13 Stewart (n 283), 234, 246, 248. 14 Kingsbury, Krisch and Stewart (n 113), 37. 15 Ibid., 267. 16 See, Chapter 5; See also, B. Kingsbury and L. Casini ‘Global Administrative Law

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In this regard, some of the PAs might offer grievance mechanisms or an ombudsman office to deal with complaints over the implementation of climate projects or programs. However, the Funds are too far removed from these entities, which may not be able to call upon the Funds to justify their conduct or provide some form of remedy for their deficient performance.17 In the Climate Funds, one may find at least two types of review mechanisms: a compliance-review procedure and a problem-solving procedure.18 The former consists of an investigation of a complaint by the review mechanism in the light of established standards.19 Meanwhile, the problem-solving procedure consists of a participatory and flexible approach oriented at assisting parties with a conflict in finding a mutually acceptable solution.20 Although the latter procedure seems less ruledriven at face value, it can have an element of review and rule compliance. This is because a problem-solving procedure may be triggered where non-compliance leads to a conflict between two parties. For these cases, this type of procedure could enable local stakeholders to have a decision reviewed by an independent body, and rule compliance could be promoted when stakeholders are found to be negatively affected by the decision. Returning to the broader literature on review mechanisms within global institutions, it remains unclear what types of remedies these mechanisms might employ in the event individuals are found to be (potentially) adversely affected by a decision of a global institution. Some authors generally refer to the faculty of review mechanisms to adopt decisions to Dimensions of International Organizations Law’ (2009) 6(2) International Organizations Law Review, 337. 17 Moreover, while they perform a relevant oversight function, the PAs are not the primary focus of the analysis in this book as they are rather oriented at ensuring that developing countries implement their projects. As this book focuses on the implementation of SDG 13 through the Funds and the impacts of their decisions within the overall resource allocation process,—and not just the implementation of projects or programs—it studies whether the Funds have established review mechanisms within their own governance architecture. 18 The clearest example of these two procedures is offered by the Independent Redress Mechanism of the GCF, further analyzed below. See, GCF Board, ‘Procedures and Guidelines of the Independent Redress Mechanism’ (2019) GCF/B.22/11, para. 36. 19 Ibid., para. 50. 20 Ibid., para. 38.

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“halt or modify non-conforming projects.”21 Others also refer to “taking steps to prevent and remedy discrete unjustified harms and deprivations” on individuals.22 As for the legal status of the review mechanisms’ decisions, and the question of whether they are binding or enforceable, this is an unresolved issue. While certain review bodies’ decisions are binding on their members and enforceable, this is more often the case in dispute settlement tribunals or certain human rights tribunals.23 Other review bodies may not have strong decision-making power leading to the adoption of binding and enforceable decisions. This is because members and officials of global institutions may generally view the creation of review entities as ceding too much control to such bodies and thus oppose it, as also impairing flexibility and organizational effectiveness in decision-making or as involving significant costs in terms of resources and delay, among other reasons.24 Against this backdrop, the literature suggests that review bodies’ decisions may also consist of reports and recommendations.25 However, it is not more specific in identifying the types of measures that review mechanisms may adopt and the impacts that these may have on decisions that are subject to review, or on the interests and rights of (potentially) negatively affected stakeholders. Nor do scholars mention whether these instruments should eventually be considered, ratified, or approved by another organ of the global institution (i.e., its decision-making body), or whether review bodies’ decisions may enjoy independent effects. It is only recognized that review mechanisms may invariably not have the capacity to halt or modify global decisions by themselves as courts and tribunals would at a domestic level.26 As for the accessibility of review mechanisms regarding the identifying of those who can submit complaints, some authors generally refer

21 Kingsbury, Krisch and Stewart (n 113), 34. 22 Stewart (n 115), 224. 23 E.g., the investor protection provisions of North American Free Trade Agreement’s

Chapter 11, or the European Court on Human Rights. 24 Stewart (n 113), 104–105; Stewart (n 115), 251, 267; Kingsbury, Krisch and Stewart (n 113), 40. 25 Kingsbury, Krisch and Stewart (n 113), 34. 26 Ibid., 34 and 55.

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to those “addressed”27 or “regulated,”28 by a global decision, or to “affected individuals and groups.”29 Other authors explicitly refer to “NGOs, business firms, and other civil society actors.”30 Accordingly, review mechanisms should have the capacity to hear individual complaints from local stakeholders that are (potentially) affected by a project or program, including NGOs or representatives. Each review mechanism may have a different procedure for the submission of these complaints, according to which the body should give detailed consideration to the admissibility of complaints.31 However, these scholars have not better defined what is meant by stating that individuals should be given an opportunity to submit their complaints, besides what information individuals should include in order to support their complaint—regarding the content of the complaint and evidence—and the time constraints for the submission of complaints and responses.32 Moreover, from the experience of some global entities, it would seem that local stakeholders may not have direct access to the review mechanism in some cases, having to submit the decision for review by a different body first.33 Yet, this possibility and its potential implications for accountability to individuals have not caught the attention of the literature to a great extent. Finally, regarding the substantive assessment, or the type of complaints that the review mechanisms can examine, some academics generally refer to “the rules and decisions [the global bodies] make.”34 This literature contends that the assessment should consist of examining whether these instruments adhere to both the substantive and procedural norms within the internal directives, regulations, and policies of the respective global

27 Kingsbury (n 283), 38. 28 Stewart (n 113), 89. 29 Kingsbury, Krisch and Stewart (n 113), 34; Stewart (n 115), 220. 30 Kingsbury, Krisch and Stewart (n 113), 50. 31 For an analysis of human rights review mechanisms, see Kingsbury (n 283), 45–46. 32 Transparency International (n 110), 49. 33 E.g., at the Inter-American Court of Human Rights,aggrieved individuals must first apply to the Inter-American Commission of Human Rights, which can then bring claims before the Court. See, Stewart (n 113), 94. 34 Kingsbury, Krisch and Stewart (n 113), 17.

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body.35 Therefore, according to these scholars, review mechanisms are rule- or policy-oriented, as they seek to ensure compliance with the norms of the regime. Moreover, review mechanisms may also help to guarantee that the other standards of participation and transparency are respected. When individuals are able to have global decisions reviewed by a third party, this may help to ensure that these standards are sufficiently promoted.36 However, it is uncertain to what extent review bodies should be able to examine the promotion of transparency and stakeholder participation. In principle, and to the extent that review mechanisms are rule-oriented, they may be expected to do so to the extent that these standards have been included in their policies. If this is the case, the previous two chapters have demonstrated that the Funds still fall short in their efforts to fully incorporate the participation and transparency standards in their policies. Therefore, as I have demonstrated, even when Funds adhere to their policies, their decisions can still be harmful to local stakeholders. The rule-oriented approach of review mechanisms that some scholars seem to propose triggers the question of whether review mechanisms should also seek to prevent adverse effects, even where these are not prohibited by the norms of the regime, or when internal norms or policies have not been breached. Similarly, in the event that the parties in a conflict reached an agreement, is it possible to sanction an agreement that is not in compliance with the internal rules and policies of the regime? These questions have not been addressed by the literature so far.

3

Accountability in the Climate Funds

Drawing from the literature on global institutions, it becomes apparent that certain legal accountability mechanisms in the form of review bodies have been established to receive complaints from individuals concerning global decision-making. From this literature, at least three dimensions of these types of accountability mechanisms can be distilled: (1) the legal status of decisions and remedies; (2) the accessibility of review mechanisms by individuals; and (3) the substantive assessment regarding the types of complaints subject to review. The chapter will now examine the

35 Ibid., 34; Stewart (n 113), 90. 36 Kingsbury and Casini (n 463), 356; Stewart (n 115), 266.

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review mechanisms that the Climate Funds have established and their regulation within internal policies, in order to ascertain whether and to what extent they effectively foster accountability, or if they might be reinforcing the adverse impacts experienced by local stakeholders. Regarding the legal status of decisions, it will be examined whether the decisions of the review mechanisms of the Funds are binding and enforceable. Do these decisions compel decision-makers toward specific outcomes or actions? If not, does the lack of binding legal status hinder addressing negative impacts on local stakeholders? Do these decisions yield automatic effects, or do they need to be ratified by the decisionmaking body of the Fund? What remedies are available in the event local stakeholders are found to be (potentially) adversely affected by a decision? As for the accessibility of review mechanisms, it will be determined who can submit complaints before these bodies. Can any local stakeholder directly access these mechanisms, including those who might potentially be affected? Can representatives of affected stakeholders file complaints on their behalf? Under what circumstances do the review mechanisms study complaints? Lastly, in relation to the substantive assessment, it will be explored the types of complaints that the review mechanisms can assess. Does the assessment consist of examining whether the Funds adhere to their internal norms? Can the review mechanisms also seek to prevent adverse effects even where these are not prohibited by the norms? To what extent can they evaluate compliance with participation and transparency standards within the Funds? In order to answer all these questions, the overview of the policies proceeds Fund by Fund. I first examine the legal status of the decisions of the GEF’s review mechanism and associated remedies that may be granted to (potentially) negatively affect local stakeholders. Then, I proceed with ascertaining which local stakeholders may access this review mechanism, followed by the types of complaints that the mechanism can investigate. The same analysis is then followed in relation to the review mechanisms of the AF and the GCF. 3.1

The GEF

3.1.1 Legal Status of Decisions and Associated Remedies The GEF has a review mechanism at the Fund level: The Conflict Resolution Commissioner (CRC). The CRC is a conflict resolution service

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established in 2007 in the GEF Secretariat as a response to the concerns expressed by smaller countries in relation to the operation of the GEF.37 On the GEF CRC’s website, there are a number of case summaries of complaints involving GEF-funded projects.38 Yet, in none of the summaries or documentation publicly available is there evidence of the CRC having acted upon the complaints in any manner. On the contrary, the cases only reflect the work of the PAs’ grievance mechanisms. Accordingly, it is uncertain whether the CRC has itself received any complaint and, if so, how it has acted upon it. The CRC’s role is mostly oriented toward managing and solving conflicts between actors involved in the work of the GEF, such as local stakeholders concerned about a GEF-related project or program, and PAs or other implementing entities of a project or program.39 The GEF has not adopted a concrete policy document on the CRC. But according to the GEF environmental and social policies, the CRC works “directly with member countries and PAs to help resolve disputes and address complaints”40 about GEF-funded projects and operations. Hence, there may be a mismatch between the label ‘conflict resolution’ and the nature of review mechanisms as defined by the literature, as the CRC’s role seems confined to cooperating with other entities to assist in handling complaints raised by local stakeholders about projects and operations. More concrete information on the mechanism can be found on the GEF website, which further establishes that the CRC works to seek the resolution of conflicts through a number of actions. These “may include” facilitating dialogue among concerned parties to solve their issues, seeking appropriate responsive action, facilitating conciliation or mediation, conducting independent fact-finding, or referring the matter to the grievance mechanism of a PA.41 While the words ‘may include’ tell us that these actions are not exhaustive, they all relate to facilitative roles 37 Nakhooda (n 87) 21. 38 GEF, ‘Conflict Resolution Commissioner’ (2021) GEF, https://www.thegef.org/

conflict-resolution, accessed 25 May 2021. 39 K. Orenstein, J. Redman and N. Tangri, ‘The Green Climate Fund’s No-Objection Procedure and Private Finance: Lessons Learned from Existing Institutions’ (2012) Gaia, IPS and Friends of the Earth. 40 GEF (n 142). 41 GEF, ‘Conflict Resolution—Voice and Right of Recourse for Affected People’ (2018)

GEF.

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aimed at steering parties in conflict toward a solution, except for the last resource, which consists of referring the matter to another review mechanism. Accordingly, the CRC does not seem to have the capacity to adopt binding decisions or provide for remedies, nor to recommend possible solutions to resolve the complaints that it receives. Therefore, remedies are to be agreed upon by the parties in conflict themselves, although there is no indication as to which remedies shall be mutually agreed upon. 3.1.2 Access to the CRC by Stakeholders According to its website, complaints to the CRC may be raised by any person concerned about a GEF-related activity, including its funded projects or programs.42 Accordingly, there is no standing requirement or admissibility threshold other than any actor being subjectively ‘concerned’ about an activity, which should also include any individual or representative of those (potentially) affected by a decision. The procedure is very informal. Complaints can be delivered in the form of a simple email, letter, or other format, and in any language. Persons submitting these complaints may request confidentiality and anonymity, which shall be respected at all times. The CRC has three weeks to review complaints and to determine whether they fall within its mandate. If so, it will then develop the next steps to seek a resolution of the conflict in dialogue with the parties involved, including facilitating dialogue and seeking appropriate responsive action.43 Yet, the procedure lacks any further information in relation to content and evidence that should support the complaint and the time constraints for the submission of complaints and responses. 3.1.3 Substantive Assessment As for the types of complaints that the CRC should examine, these are not outlined in a specific policy document. However, the GEF website establishes that they “may include, among others,” lack of stakeholder consultation, lack of compliance with GEF policies—such as the Environmental and Social Safeguards or Indigenous Peoples Policy—or “perception of wrongdoing or mismanagement.”44 The words ‘may include,

42 Ibid. 43 Ibid. 44 GEF (n 488).

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among others’ seem to point to a non-exhaustive list of elements that the CRC is able to examine. Therefore, this does not seem to preclude the CRC from examining respect for procedural standards of participation and transparency, as well as other standards internal to the GEF. Accordingly, the CRC assesses conflicts arising from non-compliance with standards and GEF policies. Moreover, the open-ended nature of these policies triggers a question: can the CRC also examine other types of conflicts among relevant parties to a project or program that may produce adverse effects, even where these are not prohibited by the norms? If this is the case, the CRC would not be of an exclusively norm-driven nature. However, the level of acceptable negative effects on people is not defined anywhere, which means that it would be unclear when individuals are considered to be adversely affected by a funding decision, and accordingly, when the latter is susceptible to being reviewed by the CRC. At the same time, if the aim of the CRC is to bring the parties to a mutually acceptable solution, it is unclear whether that solution must be one that is respectful of these norms and standards. While one could instinctively lean toward an affirmative answer, from the GEF policies and website, and from the record of case summaries in the latter, it cannot be ascertained to what extent the CRC’s review is a norm-driven procedure, given its open-ended nature. 3.2

The AF

3.2.1 Legal Status of Decisions and Associated Remedies The AF offers a complaints mechanism at the executive level of the Fund in the form of the Ad Hoc Complaint Handling Mechanism (ACHM). The ACHM is an institutional mechanism within the AF Secretariat that was officially established in 2016 in order to assist in responding to complaints raised against AF-funded projects.45 The AF has a dedicated website where it publishes every complaint received.46 However, there are no complaints published on this website at the time of writing. 45 AFB, ‘Ad Hoc Complaint Handling Mechanism’ (ACHM) (Approved in October 2016)’ (2016) AF, para. 2. 46 Ibid., paras. 29–30; AF, ‘Complaints and Reports’ (2019) AF, https://www.ada ptation-fund.org/projects-programmes/accountability-complaints/complaints-reports/, accessed 1 January 2021.

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From its published policies,47 it can be ascertained that the ACHM takes the form of a problem-solving procedure. Yet, it presents an element of review insofar as it has the power to review complaints in relation to AF projects or programs. Moreover, the ACHM has the authority to adopt assessment reports on the complaints it receives. These reports consist of “an agreed upon strategy toward the mutual understanding of the issues (…) and the potential ways forward in order to reach solutions.”48 Accordingly, the ACHM studies complaints and designs solutions and strategies agreed upon by the parties to the dispute. Therefore, the ACHM can enable local stakeholders to have a decision reviewed by an independent body, which may promote rule compliance when the former is found to be negatively affected by the decision through facilitative dialogue. However, the policies do not indicate the types of solutions and potential remedies that might be mutually agreed upon by the parties. The assessment report is delivered to the Ethics and Finance Committee (EFC), composed of Board members and alternates,49 which examines them and makes a recommendation for approval by the AFB. Therefore, the report is not binding in itself. Only if there is no objection by the EFC within 14 business days, will the Secretariat seek to implement the strategy with the participation of the parties. This strategy cannot be appealed.50 If the EFC objects, the Secretariat shall cease all dispute resolution activities.51 But even if there is no objection from the EFC, the AF policies explicitly establish that “[t]he ACHM is not a guarantee to achieving resolution.”52 In the task of implementing the strategy, the Secretariat will adopt “trust-building measures or dispute resolution activities” in order to seek the engagement of the parties. In this process, it submits update reports on the implementation of the strategy, but if within two Update Reports of the ACHM the proposed resolution is not implemented, the

47 AFB (n 492). 48 Ibid., para. 9. 49 Adaptation Fund, ‘Board’ (2021) Adaptation Fund, https://www.adaptation-fund. org/about/governance/board/, accessed 15 October 2021. 50 Ibid., paras. 9–11. 51 Ibid., para. 10. 52 Ibid., para. 13.

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Manager of the Secretariat may decide to terminate the process. However, parties may seek to reengage if they want to.53 3.2.2 Access to the ACHM by Stakeholders According to the AF’s policies,54 the ACHM assists in responding to complaints of the PAs and “members of the communities that are adversely affected” by the funded projects and programs.55 This includes “[a]ny individual, or their representative(s), living in an area where impacts of a Fund-supported project may occur.”56 Therefore, its access is significantly open, as impacts are not a condition of access, but rather the possibility of their occurrence. These complaints can be submitted to the ACHM only when complainants have not succeeded in settling their dispute through the grievance mechanisms offered by the competent PAs. Accordingly, complainants should first refer to the PAs to settle a complaint, and in the event that the matter is not resolved within a year, complainants can appeal to the ACHM.57 In any case, complaints must be filed before the final evaluation report of the project is issued.58 If complainants, their representatives or any other individual believe they risk a reprisal for raising their concerns, they can request confidentiality regarding their names, addresses, pictures, and any other identifying information.59 Confidentiality can be requested at any time and is granted throughout the whole process. No one will have access to confidential information, except the Secretariat.60 The ACHM’s procedure is also very informal, and it may receive the complaint via mail or email and in any of the six official UN

53 Ibid., paras. 12–14. 54 Ibid. 55 Ibid., para. 2. 56 Ibid., para. 20. 57 Ibid., para. 3;

AF, ‘Ad Hoc Complaint Handling Mechanism’ (ACHM)’ (2019) AF, https://www.adaptation-fund.org/projects-programmes/accountability-com plaints/ad-hoc-complaint-handling-mechanism-achm/, accessed 26 January 2021. 58 AFB (n 492). 59 Ibid., para. 21. 60 Ibid., para. 22.

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languages.61 Submissions shall contain any information relevant to the project, including the activities believed to be the (potential) source and nature of the disservice or wrong.62 Then, the Manager of the Secretariat determines whether it can be examined and informs of its receipt within 5 business days. If a compliant is deemed eligible, the Secretariat then develops the next steps for the adoption of an assessment report in consultation with the parties,63 and for the implementation of this strategy as mentioned above. 3.2.3 Substantive Assessment With regard to the types of complaints that the ACHM is empowered to investigate, these do not need to relate to breaches of the Fund’s policies and procedures. In fact, it suffices for an individual to be “adversely affected by the implementation of projects or programs funded by the Fund,”64 and for a complaint to relate to potential adverse impacts of the project or program without a norm necessarily being breached.65 Accordingly, the ACHM is not rule-oriented and can examine complaints about adverse impacts, even when these are not covered by the AF rules or policies. However, the policies do not indicate as to what counts as adverse effects on people, which means that it is unclear when individuals may be considered to be adversely affected by a funding decision, and accordingly, when a decision is susceptible to being reviewed by the ACHM. Equally obscure is whether the solution to the conflict agreed by the parties must be respectful of the norms and standards of the AF. Again, from the AF policies and website, and from the lack of records of case summaries in the latter, it cannot be ascertained to what extent the ACHM’s review is a norm-driven procedure.

61 Ibid., paras. 23 and 24. 62 Ibid., para. 26. 63 Ibid., paras. 8 and 9. 64 Ibid., para. 2. 65 AF (n 504).

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143

The GCF

3.3.1 Legal Status of Decisions and Associated Remedies The GCF has established the Independent Redress Mechanism (IRM). The IRM was set up in 2013 by the GCF Board in order to “receive complaints related to the operation of the Fund and (…) evaluate and make recommendations.”66 It is independent from its Secretariat, and its head is appointed by the Board, who then selects its own staff. As of September 2023, the IRM has received nine complaints from local stakeholders involving GCF-funded projects. These will be critically assessed in Sect. 4 below. According to the Updated Terms of Reference of the Independent Redress Mechanism, it “is not intended to be a court of appeals or a legal mechanism.”67 The Procedures and Guidelines of the Independent Redress Mechanism establish two modalities of resolution of complaints, to be selected by complainants: a problem-solving phase and compliancereview proceedings.68 The former consists of a participatory and flexible approach oriented toward assisting the parties in finding a mutually acceptable solution.69 Regarding the compliance review proceeding, it is a more formal process whereby the IRM investigates the complaint in depth to establish whether there has been non-compliance with the GCF policies and procedures.70 Pursuant to the investigation, a compliance report is published with recommendations and sent to the Board.71 Accordingly, the IRM may perform a facilitative role by fostering communication and facilitating dialogue among the involved parties, as well as conducting activities such as conciliation, mediation, and factfinding.72 However, the IRM can also perform a compliance-review

66 Governing Instrument, para. 69. 67 GCF Board, ‘Updated Terms of Reference of the Independent Redress Mechanism

(Revised)’ (2017) GCF Doc B.BM-2017/10, para. 1. 68 GCF Board (n 465), para. 36. 69 Ibid., para. 38. 70 Ibid., para. 50. 71 Ibid., para. 61 and 63. 72 GCF, ‘About the IRM’ (2020) GCF, https://irm.greenclimate.fund/about/functi

ons-processes, accessed 29 January 2021.

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assessment through which it investigates the matter by itself and recommends remedies directly to the Board. In relation to these remedies, the Updated terms of reference of the Independent Redress Mechanism specifies that they may address the GCF or PAs to seek compliance with the GCF policies and procedures, request the development of a remedial plan, or financially compensate the complainants.73 As for the legal status of these recommendations, they are not binding, but simply sent to another body, the Board, which can then choose whether or not to follow them “as it sees appropriate.”74 The Board decision cannot be appealed or reviewed.75 If approved, the Board will take steps to implement the recommendations within thirty days, which may consist of the development of a remedial action plan by the Secretariat in consultation with the IRM, proposing appropriate steps to be taken by the GCF or PAs to bring the project into compliance with the GCF policies and procedures or to provide redress.76 If this plan is not implemented, the IRM shall report it to the Board.77 However, the policies do not establish what the Board would do in that case. 3.3.2 Access to the IRM by Stakeholder The IRM has competence to address, among other things, complaints by individuals or communities that may be affected by negative impacts related to a project or program funded by the GCF.78 These complaints can be filed by a person, group of persons, or community members who may have been or may potentially be adversely affected by a GCF project or program.79 Accordingly, it is not necessary for the complainant to have already been harmed. Conversely, complaints by persons who may be harmed in the future are also welcome, which should presumptively be considered by the IRM. These complaints may also be submitted

73 GCF Board (n 514), Annex II, para. 14. 74 Ibid., paras. 61 and 63. 75 Ibid., para. 65. 76 Ibid., paras. 63, 66 and 67. 77 Ibid., para. 68. 78 Ibid., para. 2. 79 Ibid., para. 20.

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on the complainant’s behalf by its government or a representative duly authorized by the former.80 Complaints can be submitted directly to the IRM without complainants needing to exhaust other remedies.81 To this end, the IRM establishes a prescription or limitation period of two years from the time the individual first became aware of the negative impacts or the closure of the project.82 Complaints can be sent through an online complaints form, voice or video recording, or through a toll-free hot-line call in any language.83 A complaint shall contain an identification of the complainant and the project, a brief explanation in relation to the (potential) adverse impacts, and an indication of whether confidentiality is requested for the complainant or a representative. The complainant’s right to confidentiality includes confidentiality of identities and information provided to the IRM, and should not be available to anyone, including the GCF Secretariat, during a compliance review.84 Complaints may also include a description of the GCF policies and procedures breached, previous efforts of solving the dispute if any, and other relevant documents that might facilitate the IRM’s processing of the complaint. However, complainants do not have to prove their complaints. They need only to file a complaint and the IRM will then gather evidence.85 Within thirty-five days from its receipt, the IRM will either communicate to the complainant the eligibility of the complaint or provide reasons in the case of ineligibility. If eligible, it will inform the GCF Secretariat and initiate the steps to resolve the dispute as mentioned above.86 Moreover, the GCF also contemplates the possibility of the IRM “selfinitiating” proceedings under certain circumstances: first, there must be

80 Ibid., para. 21. 81 Ibid., para. 11. 82 GCF, ‘GCF Independent Redress Mechanism. Opening Accountability Doors to

Accountability and Redress’ (2019) GCF. 83 GCF Board (n 514), paras. 27 and 28. 84 Ibid., para. 97. 85 Ibid., paras. 25–26. 86 Ibid., paras. 30–33 and 36ff.

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evidence from a credible source that a GCF project or program has negatively impacted a person, group or community, or that it may do so in the future; secondly, the information must pose a significant reputational risk to the GCF; and thirdly, the IRM must find that the affected actor is unable to access the IRM due to any circumstance such as lack of skills or means to register.87 If these conditions are met, the IRM may initiate the procedure as if it was an eligible complaint.88 3.3.3 Substantive Assessment As for the elements that the IRM is empowered to assess, these are different for problem-solving and compliance-review processes. For problem-solving, there is no requirement for policies or procedures to be breached. Any person who has been or may be affected by adverse impacts of a project or program can access the IRM,89 which will focus on addressing the concern in a way that meets the interests of all involved parties.90 As in previous discussions, there is no definition of what counts as an adverse effect. But the IRM policies specify that the agreement shall not violate GCF policies or domestic laws of the parties, or international commitments of the country concerned.91 Regarding compliance review, the IRM focuses on whether the GCF project or program has complied with the GCF policies and procedures, and whether such non-compliance may cause adverse effects on the complainant.92 Accordingly, the IRM is rule-oriented, and its competence is limited to reviewing adherence to policies such as the Environmental and Social Policy, Indigenous Peoples’ Policy, or the Information Disclosure Policy.93 Therefore, it will evaluate compliance with the procedural standards of participation and transparency to the extent to which these are defined in their policies.

87 Ibid., para. 71. 88 Ibid., para. 72. 89 Ibid., para. 20. 90 Ibid., para. 38. 91 Ibid., para. 47. 92 Ibid., 50. 93 Ibid., 6.

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Critical Assessment of the Review Mechanisms

Table 1 offers a concise overview the main characteristics of the review mechanisms that each of the Climate Funds has established for addressing complaints raised by individuals in recipient countries. A careful examination of these policies reveals that these mechanisms, while employing different approaches, subject funding decisions to further scrutiny, enabling stakeholders to address their grievances through either recommendations or a facilitative process. Building upon these policies and processes, the chapter will now offer a comprehensive comparative analysis of the review mechanisms of the Funds, in order to distill a number of criticisms and best practices. This analysis will predominantly focus on the legal status of the decisions Table 1

Accountability in the Climate Funds GEF Funds

AF

GCF

Legal status of decisions and associated remedies

Problem-solving Compliance-review Binding decisions Board approval Remedies

Yes No No No Agreed by parties

Yes No No Yes Agreed by parties

Accessibility

Who

Members of communities adversely affected No

Yes

Time constraint

Any person concerned about a project/ program Deferred to PAs N/A

Yes Yes No Yes Comply, remedial plan and compensate Individuals that may be affected by negative impacts

Language

Any

2 years since awareness of the impact/end project Any

Self-initiating Policies/ Procedures Other

No Yes

Before the final evaluation report 6 UN Languages No No

Open (consultation)

Adverse impact

Any problem

Direct access

Substantive assessment

Yes Yes

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of each of the review mechanisms and associated remedies, the accessibility of individuals to these mechanisms, and the elements that these mechanisms should have the capacity to examine. 4.1

Legal Status of Decisions and Associated Remedies

All the Climate Funds have established review mechanisms that play facilitative roles in solving problems related to their own projects and programs. These facilitative actions are oriented toward seeking solutions to potential adverse effects and steering conflicted parties toward a solution. Solutions and potential remedies are agreed upon by conflicted parties themselves, although the review mechanisms offer no information as to which remedies shall be mutually agreed upon. Still, the problemsolving procedures can indirectly enable local stakeholders to have a decision reviewed and to promote rule compliance when they have been negatively affected by the decision. In relation to the CRC, its facilitative role is exclusively oriented toward seeking appropriate responsive action of the parties by facilitating dialogue, engaging in mediation, independent fact-finding, or by forwarding the complaint to the grievance mechanism of the competent PA. Accordingly, the CRC is not structurally dependent on the GEF and it’s Council. However, its determinations are not binding. As mentioned earlier, there is no information available about the role that the CRC has exercised in the complaints that GEF projects have received so far. Likewise, there is very little empirical evidence in the literature that can shed light on this. In a recent study, Daniel Honig et al. assessed some 23,000 aid projects from different donors, including the GEF.94 The authors argue that the enforceability of the review mechanisms’ decisions is weak, but it is uncertain whether this relates also to the CRC and to what extent.95 Overall, there is scarce information regarding the question of whether the legal status of the CRC’s decisions has proven to be an effective means of resolving disputes.96

94 D. Honig et al., ‘When Does Transparency Improve Performance? Evidence from 23,000 Aid Projects in 148 Countries’ (2020) AidData Working Paper. 95 Ibid. 96 For a similar argument, see, A. Johl and Y. Lador, ‘A Human Rights-Based Approach

to Climate Finance’ (2012) Friedrich Ebert Stiftung, 8–9.

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Like the CRC, the ACHM facilitates dialogue among stakeholders and assists them in resolving issues raised. However, although the CRC offers an open list of means of solving disputes, the ACHM seems to perform a more active role, as it ultimately prepares a report setting out the parties’ shared understanding of the issues and solutions potentially acceptable to the parties. Yet, it is not a recommendation, but an assessment submitted to the EFC, which then makes a recommendation for approval by the AFB. Lack of adherence to the assessment does not give rise to any further consequences besides the termination of the procedure. The IRM offers a best practice policy, for it has two distinct modalities to be selected by the complainant. The first one is a problem-solving modality similar to that of the CRC and the ACHM, oriented toward conciliating, mediating, and performing fact-finding activities. The second is a more legalistic modality consisting of a compliance-review proceeding that concludes with a recommendation. Therefore, as opposed to the CRC and the ACHM, the IRM has the capacity to review policy compliance and adopt a recommendation with a solution to the complaint that is directly sent to the Board. However, this recommendation needs to be approved by the latter, and the IRM does not offer any appeals mechanism. This means that this mechanism is designed to present findings to the GCF Board, rather than rectify problems of projects and programs or provide remedies to negatively affected stakeholders. While presenting the findings to the Board might presumably prompt corrective actions, the Board still retains the capacity to decide whether such actions will be taken. One of the main differences between the more legalistic modality of the IRM on the one hand, and the more facts-oriented problem-solving modality of the three Funds on the other, is that potential solutions do not come mainly from the parties themselves. In this regard, the IRM specifies the types of remedies that it shall seek through its compliance review procedure. These might consist of either requiring the GCF or PAs to seek compliance with the GCF policies and procedures, requesting the development of a remedial plan, or financially compensating the complainants. Moreover, these solutions do not need to be presented to another body before a recommendation of an action plan reaches the GCF Board, as in the case of the ACHM regarding the EFC. Still, both the ACHM and the IRM are structurally dependent on the decision-making organs of the

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Funds, and their decisions do not commit the Boards to rectifying problems uncovered by the review mechanism. This means that if the review mechanisms found that the respective Board should reconsider or modify its decision, they would only be able to signal it, and the organ would ultimately decide. Therefore, the power to change the decision remains in the hands of the same organ that approved the reviewed project or program in the first place. But arguably the most significant distinction between these two modalities lies in their potential to promote accountability. The compliancereview procedure of the IRM amounts to a legal accountability mechanism with review power, as it entails conduct by the account giver, the Fund, contrary to a set of standards, its norms and procedures, and for which it provides a remedy for account holders, the local stakeholders, to be determined by the IRM. When doing so, the IRM has the potential to promote accountability to local stakeholders by providing them a platform to address their complaints through a recommendation addressed to the GCF Board. However, the impact of these recommendations, given their non-binding nature and the review mechanism’s dependency on the decision-making organ, remains uncertain. In contrast, the problem-solving assessments of the review mechanisms do not amount to legal accountability mechanisms. They do not grant local stakeholders the ability to demand that the Funds justify their actions by reference to their norms and standards and provide some form of remedy, strictly speaking. However, the fact that complaints are made publicly available could yield positive effects on accountability, as they offer local stakeholders the opportunity to organize collectively and exert pressure on the Funds.97 While some have gone a step further, and argued that reputation alone can amount to an accountability mechanism,98 this has been received with skepticism in much of the literature, among other reasons because there is not a specified account holder with the ability to impose remedies for deficient performance.99 Nonetheless, collective 97 The category of public reputational accountability has been suggested by Keohane,

who argues that while this category can be involved in other forms of accountability, it is present even when these are lacking. See, Keohane (n 453), 1133–1134. 98 Keohane (n 453), 1133–1134. 99 Stewart (n 115), 252–253; Others have opposed this argument, as reputation does

not reflect the interests of all, may not succeed in promoting change, or may be considered a substitute for formal oversight. See, e.g., Newell (n 92); M.E. Keck and K.

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mobilization and public pressure can make it hard for Funds to not to seek a solution to the potential adverse effects alleged by local stakeholders. Moreover, problem-solving procedures further offer stakeholders a reasonable opportunity to have their evidence observed. Against this backdrop, the facilitative and conciliatory role of review mechanisms in problem-solving procedures could facilitate solutions to the complaints of local stakeholders and advance the redress of adverse effects or some form of remedy. However, these points are mainly theoretical and, as mentioned above, there is no record of cases that have reached and/or acted upon by the ACHM or the CRC. The available evidence only pertains to complaints that have reached the IRM. However, of the nine cases that the mechanism has addressed, two were ineligible—which will be further analyzed below—and two were suspended upon request by the complainant. One case involved a complaint pertaining to the project DBSA Climate Finance Facility in South Africa,100 whose primary goal was to obtain more information about the project. Upon receiving such information through the procedures for information requests from the GCF Secretariat, the complainant called for the complaint to be suspended.101 The other case relates to the project Scaling-up Glacial Lake Outburst Flood (GLOF) risk reduction in Northern Pakistan.102 The (anonymous) complainant denounced that fees had not been paid despite the completion of work, but during the eligibility determination phase, the complaint was withdrawn.103

Sikkink, Activists Beyond Borders: Advocacy Networks in International Politics (1998) Cornell University Press; Woods and Narlikar (n 92) 569–583; Smythe and Smith (n 109), 31–53; Birdsall and de Nevers (n 110); R.C. Briggs, ‘Does Foreign Aid Target the Poorest?’ (2017) 71(1) International Organization, 187–206. 100 GCF, ‘FP098. DBSA Climate Finance Facility’ (2021) GCF, https://www.greenc limate.fund/project/fp098, accessed 29 June 2021. 101 IRM, ‘Case Register. C0005 South Africa. FP098: DBSA Climate Finance Facility’ (2020) GCF, https://irm.greenclimate.fund/case/c0005, accessed 18 May 2021. 102 GCF, ‘FP018. Scaling-up Glacial Lake Outburst Flood (GLOF) Risk Reduction in Northern Pakistan’ (2021) GCF, https://www.greenclimate.fund/project/fp018, accessed 17 October 2021. 103 IRM, ‘Case Register. C0007 Pakistan. FP018. Scaling-Up Glacial Lake Outburst Flood (GLOF) Risk Reduction in Northern Pakistan’ (2021) GCF, https://irm.greenc limate.fund/case/c0007, accessed 17 October 2021.

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Another case, concerning the project Building the Resilience of Wetlands in the Province of Datem del Marañón, Peru,104 arose as a result of a self-initiated preliminary investigation by the IRM. Although it was concluded that there was sufficient evidence to warrant a formal investigation, it was decided not to initiate formal proceedings in view of an undertaking given by the Secretariat to implement remedial actions. Upon the implementation of these actions, the case was subsequently closed. Therefore, out of the cases examined by the IRM, only four have been considered eligible and subsequently subjected to formal investigations. The first relates to the project Bio-CLIMA: Integrated climate action to reduce deforestation and strengthen resilience in BOSAWÁS and Rio San Juan Biospheres in Nicaragua105 ; the second to The Saïss Water Conservation Project in Morocco106 ; the third to the REDD+ Results-based payments in Paraguay for the period 2015–2017 in Paraguay107 ; and the fourth to the GCF -EBRD Egypt Renewable Energy Financing Framework in Egypt.108 These cases will be further examined below, but it can be advanced that only the last one is still under consideration at the time of writing. The Saïss Water Conservation Project and the REDD+ Results-based payments in Paraguay for the period 2015–2017 were dealt with through a problem-solving proceeding, and the role of the IRM consisted exclusively of assisting the parties in finding a mutually acceptable solution (i.e., through consultations and by organizing virtual meetings among the parties to the conflict). Therefore, the IRM did not adopt any decision or recommendation strictly speaking (as it would have in the compliancereview modality). Notwithstanding this, the parties in both cases reached an agreement. The Bio-CLIMA: Integrated climate action to reduce deforestation and strengthen resilience in BOSAWÁS and Rio San Juan Biospheres also originated from a problem-solving proceeding. The complainants raised 104 GCF (n 260). 105 IRM, ‘Case Register. C0006 Nicaragua’ (2023) GCF, https://irm.greenclimate.

fund/case/c0006, accessed on 17 October 2021. 106 GCF (n 412). 107 IRM, ‘Case Register. C0008 Paraguay’ (2023) GCF, https://irm.greenclimate.

fund/case/c0008, accessed on 26 August 2023. 108 IRM, ‘Case Register. C0009 Egypt’ (2023) GCF, https://irm.greenclimate.fund/ case/c0009-egypt, accessed on 17 October 2021.

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concerns about several breaches of the GCF’s policies—including insufficient consultation with indigenous communities and failure to adhere to FPIC during the project design—and various negative impacts—such as violent conflicts among local groups, land encroachments, and human rights violations. However, when parties were unable to reach an agreement, the IRM decided to refer the complaint to a compliance-review proceeding on January 17, 2022. After conducting a compliance investigation and interviewing relevant parties, the IRM submitted a final IRM Compliance Review Report to the GCF Board on August 31, 2022. This report concluded that GCF’s safeguard provisions on informed consultation and participation had not been complied with and that more due diligence on local conditions should have been conducted prior to the approval of the project proposal.109 During the subsequent Board meeting in October 2022, the Board considered the Compliance Review Report and requested the Secretariat to prepare a Management Response examining the extent of noncompliance. In this Management Response, the Secretariat did not fully agree with the extent of policy non-compliance stated in the Compliance Review Report and decided to address specific instances with the implementing PA that it considered not to align with the GCF policies. This response was deliberated over the course of the next two Board meetings in March 2023 and July 2023, and in the final meeting, the Board adopted a decision endorsing the Secretariat’s report and concluded its consideration of the Compliance Review Report without taking further action.110 The experience of this case is significantly relevant, as it highlights that despite careful consideration of the IRM’s recommendations, the Secretariat and ultimately the GCF Board disregarded them to a certain extent. Notably, the Secretariat’s Management Response did not agree with the review mechanism that more due diligence on local conditions should have been undertaken prior to the project approval. Considering that it was the Secretariat’s and ultimately the Board’s duty to

109 Independent Redress Mechanism of the GCF, ‘Compliance Review Report. Case C-0006-Nicaragua’ (2023) GCF. 110 GCF Board, ‘Decision B.36/17: Consideration of Independent Redress Mechanism compliance report C-0006’ (2023) GCF; GCF Board, ‘Reasons of the Board Relating to Its Decision on the Compliance Review Report for Case C-0006’ (2023) GCF.

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oversee the proposal’s adherence to the GCF’s policies prior to the ultimate approval, the dismissal of some of the review mechanism’s findings regarding breaches of due diligence obligations raises questions about the effectiveness of the IRM’s recommendations in guaranteeing compliance with GCF norms, as well as in providing appropriate remedies for stakeholders negatively affected by GCF-funded projects. However, there is still too little information available in relation to the review mechanisms of the Climate Funds, and a single case is not sufficient to draw robust conclusions about the impacts that the recommendations of these entities may have in the future. Yet, the World Bank’s Inspection Panel can serve as an example, as it shares some similarities with the review mechanisms of the Climate Funds, has more experience, and has been widely analyzed in academic literature.111 It offers a compliancereview procedure similar to that of the IRM, through which it investigates complaints received pertaining to World Bank policies. In terms of the legal status of its decisions, the reports of the Panel have the same factfinding nature as those of the ACHM and the IRM. Pursuant to the investigation, the Panel produces a public report that is delivered to the Bank Management.112 Against these findings, the Bank Management can then deliver its own recommendations and action plans to the Board, which ultimately discusses them and adopts a final decision on the remedial measures to be taken.113 Accordingly, like the ACHM, the Panel does not have the capacity to directly issue recommendations. Furthermore, similar to the IRM, it cannot prescribe solutions, modify projects, or grant remedies. Conversely, the Panel can only present its findings to the Management, which eventually reach the Board of the World Bank for final approval.

111 I.F.I. Shihata, The World Bank Inspection Panel: In Practice (2000) Oxford University Press, 104–108; See also, R.E. Bissel, ‘Recent Practice of the Inspection Panel of the World Bank’ (1997) 91(4) The American Journal of International Law, 741–744; Buntaine (n 105); Woods and Narlikar (n 92), 576–577. 112 Inspection Panel, ‘Operating Procedures’ (2014) World Bank Group, para. 4. 113 Ibid., para. 71.

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Both the lack of restrictiveness of the Panel’s determinations114 and its dependency on the Board of Executive Directors,115 have been widely criticized by academic commentators and identified as some of the main concerns expressed by local stakeholders.116 More concretely, the literature has criticized the recommendatory nature of the Panel’s decisions, arguing that its power of change is limited. This is because nothing in its resolution commits the World Bank to rectify its decisions. The Bank Management only needs to respond to panel findings and inform the Board of the actions it intends to take, if any. And eventually, the Board is free to approve or reject these recommendations. This can be problematic, for the Board has to balance a diverse range of interests related to the Bank’s mandate, the common interests of its Member States, or the commercial aspects linked to credit rating. In this context, when the Panel identifies non-compliance with the Bank’s policies, a significant number of findings can go unanswered in action plans.117 The first two reports of the Panel provide insights into two very different outcomes that the legal status of the Panel’s decisions can

114 Shihata (n 558), 89–90; E.R. Carrasco and A. Guernsey, ‘The World Bank’s Inspection Panel: Promoting True Accountability Through Arbitration’ (2008) 41(3) Cornell International Law Journal; J. Zalcberg, ‘The World Bank Inspection Panel: A Tool for Ensuring the World Bank’s Compliance with International Law’ (2012) 8(2) Macquarie Journal of International and Comparative Environmental Law, 83. 115 Y. Wong and B. Mayer, ‘The World Bank’s Inspection Panel: A Tool for Accountability’ (2015) 6 World Bank Legal Review, 511; D. Hunter, ‘Contextual Accountability, the World Bank Inspection Panel, and the Transformation of International Law in Edith Brown Weiss’s Kaleidoscopic World’ (2020) 32(3) Georgetown Environmental Law Review, 460–461. 116 Inspection Panel, ‘Accountability at the World Bank: The Inspection Panel at 15 Years’ (2009) World Bank, 44. 117 E.g., for a critique on the lack of commitment of the Bank to the Panel’s decision, see, Sharma (n 64), 32; For a critique on the extent of the Panel’s powers and their lack of commandment upon the Board, see Wong and Meyer (n 562), 514; For a criticism of the lack of adherence of states to the decisions of the Panel, see, N. Bridgeman and D. Hunter, ‘Narrowing the Accountability Gap: Toward a New Foreign Investor Accountability Mechanism’ (2007) 20 Georgetown Environmental Law Review, 187–236; For a criticism of the interests of the Board, see B.K. Sovacool et al., ‘Disequilibrium in Development Finance: The Contested Politics of Institutional Accountability and Transparency at the World Bank Inspection Panel’ (2018) 50(4) Development and Change; See also, D.D. Bradlow, ‘The Reform of the Governance of the IFIs: A Critical Assessment’ in H. Cissé, D.D. Bradlow and B. Kingsbury (eds.) The World Bank Legal Review: International Financial Institutions and Global Legal Governance (2011) World Bank, 37–58.

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entail in relation to complaints about projects. The first report was on a complaint over the Arun III Hydropower Project in Nepal, which aimed at enhancing energy supply through the construction of a hydro-power plant in the Arun River. The project was brought before the Inspection Panel because it was alleged to violate the Bank’s policies on environmental assessment, among others, as the project involved the construction of a road that could cause irreversible damage to the natural environment in the valley. The proposal lacked an adequate investigation of alternatives to the project, and it did not consider the cumulative impacts of the project.118 The Panel found that the project did not comply with the environmental policy requirements of the Bank as it had not prepared an adequate assessment of its impacts and that the potential of direct, serious long-term damage was significant.119 As a consequence, the Bank decided to withdraw from the project and refrained from approving financial loans to the government of Nepal in the hydro-power sector for the following decade.120 The next report that the Panel adopted was on the China Western Poverty Reduction Project, where again, the Bank was accused of failing to perform an adequate environmental assessment. The project had been flagged as Category B or Moderate Risk regarding its impacts, implying potential adverse environmental effects on human populations or natural habitats, though not significant.121 However, there were clear indicators, including an internal assessment of the World Bank,122 that serious environmental consequences merited its classification as Category A. The Panel reported to the Bank Management that the World Bank had indeed

118 Inspection Panel, ‘Request for inspection’ (1994) World Bank Group, 4–5. 119 Inspection Panel, ‘The Inspection Panel Report on Request for Inspection. Nepal:

Proposed Arun III Hydroelectric Project and Restructuring of the Arun III Access Road Project (Credit 2029-NEP)’ (2009) World Bank Group, para. 45. 120 Wong and Mayer (n 562), 515. 121 Independent Evaluation Group,

‘Safeguards and Sustainability Policies in a Changing World. An Independent Evaluation of World Bank Group Experience’ (2010) World Bank, xvii. 122 D. Clark and K. Treakle, ‘The China Western Poverty Reduction Project’ in D. Clark, J. Fox and K. Treakle (eds), Demanding Accountability: Civil-Society Claims and the World Bank Inspection Panel (2003) Rowman & Littlefield Publishers, 218.

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breached its Environmental and Social Framework in this regard.123 The Bank Management recommended to the Board to reclassify the project as A and to prepare a supplemental environmental impact assessment.124 However, the Board persisted in justifying its actions by downplaying the environmental impact of the project and arguing that it adhered to its policies.125 This represents one of the many examples in which the Board has not accepted the recommendations made by the Panel.126 The two examples of complaints studied by the Inspection Panel shed light on the fact that, like the IRM, the Panel’s decisions only imply that Bank Management submits a report with an action plan informing the Board, which can be either followed or ignored in equal measure.127 Nevertheless, the practice of the Panel also demonstrates that it is significantly effective. Most of its ultimate recommendations are ultimately approved,128 and these generally end in an action plan that leads to improvements over the long term.129 Although the success of these action plans ultimately depends on states implementing sanctions and altering future lending, the Panel has proved significantly effective in promoting

123 See, J. MacNeill, E.S. Ayensu & M. van Putten, ‘The Inspection Panel Investigation Report. The Qinghai Project’ (2000) World Bank Group; See also, World Bank, ‘Environmental and Social Framework’ (2017) World Bank Group. 124 J.D. Wolfensohn, ‘Management Report and Recommendation in Response to the Inspection Panel Investigation Report. China: Western Poverty Reduction Project. Qinghai Component’ (1999) World Bank Group. 125 See, World Bank, ‘World Bank Press Release on China Western Poverty Reduction Project’ (2000) World Bank Group, https://www.inspectionpanel.org/news/world-bankpress-release-china-western-poverty-reduction-project, accessed 13 May 2021; See also, Zalcberg (n 561), 83. 126 For instance, in the case of Yacyretá Hydroelectric Project in Argentina/Paraguay,

the Panel identified violations of policies, and the Board did not intervene. In the Mumbai Transport Project, the Panel found various errors including flaws in the environmental and social assessment, and while the Board approved the action plan of Management, a number of issues remained unresolved and target dates were not met. See, Zalcberg (n 561), 90–91. 127 Inspection Panel (n 563), paras. 42–43. 128 N. Matz, ‘Financial Institutions between Effectiveness and Legitimacy—A Legal

Analysis of the World Bank, Global Environment Facility and Prototype Carbon Fund’ (2005) 5 International Environmental Agreements, 265–302; D. Hunter, ‘Using the World Bank Inspection Panel to Defend the Interests of Project-affected People’ (2003) 4 Chicago Journal of International Law, 207; Buntaine (n 105), 103. 129 Wong and Mayer (n 562), 515.

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accountability to local stakeholders for World Bank projects.130 For instance, as previously mentioned, after the Arun III Hydropower Project in Nepal was sent for Inspection Panel review, the Bank withdrew from the project and did not approve lending to the government of Nepal in the hydro-power sector for the following decade.131 Another example is the case of India: NTPC Power Generation Project in Singrauli, which led to an increased compensation for over 1200 families affected by forced evictions.132 At the same time, the Panel has also been able to trigger action by the Bank even without investigation or registration of the case. This happened in the case of Nepal: Enhanced Vocational Education and Training Project, which aimed at expanding the supply of skilled labor by increasing access to quality training programs.133 The Panel received a request for inspection from the LGBTI community of Nepal because the project invited only men and women to apply for training offered under the project, which discriminated against those who prefer to choose “other” when a gender option has to be selected. Following this request, the Bank and the Ministry of Education and Sports engaged in discussions to address these concerns, which resulted in the agreement to rectify the situation without registering the complaint.134 In this context, some claimants have argued that engagement with the Inspection Panel has increased attention to their grievances, leading to the resolution of their concerns.135 Some authors suggest that this is because the very existence of the Panel indirectly puts pressure on the World

130 See, ibid.; See also, Buntaine (n 105), 103. 131 Ibid. 132 Ibid. 133 World Bank, ‘Nepal: Enhanced Vocational Education and Training’ (2021) World

Bank Group, https://projects.worldbank.org/en/projects-operations/project-detail/P10 4015, accessed 19 May 2021. 134 Inspection Panel, ‘Panel Cases. Nepal: Enhanced Vocational Education and Training Project (Not Registered)’ (2013) World Bank Group, https://www.inspectionpanel.org/ panel-cases/enhanced-vocational-education-and-training-project-not-registered, accessed 19 May 2021. 135 Inspection Panel, ‘Report and Recommendation. Case 74, Kazakhstan: South-West Roads Western Europe-Western China International Transit Corridor (CAREC 1b & 6b) (IBRD Loan No. 7681-KZ)’ (2011) World Bank, para. 66.

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Bank’s staff to adhere more closely to its policies,136 although this impact is difficult to measure and remains a matter of speculation. However, this may be related to the fact that, regardless of the outcome of the investigation, the Panel raises awareness of the problems of local stakeholders to the highest levels in the World Bank and the recipient country. Moreover, the publicity of the reviews can be a soft form of redress, suggesting that there is an overlap between transparency and accountability. Some authors posit that, in spite of its recommendatory nature, the flexibility and capacity of the Inspection Panel to bring conflicts to the surface is what gives it strength.137 Others argue that a powerful element of the enforceability of the Panel relates to the fact that its findings are made public producing a “sunshine effect” that reflects on problems.138 Overall, given the fact that the CRC and the ACHM can only adopt facilitative roles and assessments, and the IRM recommendations, and that the last two ultimately need to be approved by the Boards of their Funds, the experience of the Inspection Panel can shed light on the question of how the review mechanisms of the Funds may operate in practice. On the one hand, although the IRM’s experience might point to the opposite, its practice could be impactful and bring more attention to stakeholders’ grievances. But on the other, the fact that decisions are not binding and the dependency of the IRM and ACHM on their respective Boards could also imply that their decisions may sometimes not be upheld and might prove insufficient to secure positive change to redress harm experienced by local stakeholders. 4.2

Access to the Review Mechanisms by Stakeholders

All review mechanisms can receive complaints from any individual or representative who is concerned about a funded project, or who may be affected by its impacts. Therefore, they are open to any individual, vulnerable group, NGO, or indigenous people based in the territory in which

136 Wong and Mayer (n 562), 516–517. 137 M. Circi, ‘The World Bank Inspection Panel: Is it Really Effective’ (2006) 6(3)

Global Jurist, 1–29. 138 D. Barlas and T. Tassoni, ‘Improving Service Delivery Through Voice and Accountability: The Experience of the World Bank Inspection Panel’ (2015) 6 World Bank Legal Review, 477–494.

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the project is implemented, and to the representatives of these. Additionally, complaints can not only be submitted when there is an actual damage but also when negative impacts may be experienced in the future. This permits a pre-emptive remedy in relation to activities that could otherwise cause irreparable damage. (Potential) adverse impacts must be directly connected to the Funds’ projects or programs. In this regard, the two complaints that were found ineligible by the IRM were dismissed because damage was not directly related to the GCF projects. The first complaint related to the project Enhancing Climate Resilience of India’s Coastal Communities, a project that aimed at conserving mangroves in the state of Andhra Pradesh in India.139 The complainant— whose identity remains confidential upon request—raised concerns about a housing development implemented by the regional government that had caused the destruction of mangroves. The claim alleged that the GCF should have taken steps to stop the felling of mangroves in the context of its project in Andhra Pradesh. Yet, the IRM found that the claimant was ineligible because the mangroves were not in the project area, and the felling was not conducted by the PA. Therefore, the claimant was deemed not to be (potentially) affected by a GCF project.140 The second complaint concerned the project Climate Resilient Infrastructure Mainstreaming, in Bangladesh.141 The complainant, Transparency International Bangladesh—an NGO on behalf of the Mayor of Satkhira Municipality and 427 citizens—argued that, after two years, the funds had still not been disbursed, and as a consequence of that, they had suffered financial losses and environmental damages. However, the IRM dismissed the petition, alleging that these damages were caused by climate change rather than the implementation of the GCF project.142 139 GCF, ‘Projects & Programmes. FP084. Enhancing Climate Resilience of India’s Coastal Communities’ (2021) GCF, https://www.greenclimate.fund/project/fp084, accessed 13 May 2021. 140 GCF IRM, ‘Grievances and Complaints. Eligibility Determination. GCF Project FP084: Enhancing Climate Resilience of India’s Coastal Communities. IRM Case: C0004-India’ (2020) GCF. 141 GCF, ‘Projects & Programmes. FP004. Climate Resilient Infrastructure Mainstreaming’ (2021) GCF, https://www.greenclimate.fund/project/fp004, accessed 13 May 2021. 142 GCF, ‘Independent Redress Mechanism. Eligibility Determination: Case 17/ C001—Bangladesh’ (2017) GCF.

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The GCF policies only require that complainants are (potentially) adversely affected by a GCF project or program, but do not further lay down standards on causation. Accordingly, the assessment of the causation between the GCF project and the adverse impacts is determined by the Board. Yet, in both examples, the lack of causation between the project and the damage was clear: the first one lacks geographical causation (as damage did not occur in the project area), whereas the second one lacks temporal causation (as the project had not yet been implemented). In all review mechanisms, complaints can be submitted through very informal channels, such as emails or letters, which makes them relatively easy to access in practical terms. In this regard, the GEF Funds and the GCF offer a best practice policy in that complaints may be submitted to the CRC and the IRM in any language. However, for the ACHM, these shall be written in any of the six official languages of the UN. This can present a serious burden or obstacle for complainants, who will need to translate their complaints in the event their local language is not an official language of the UN. As the previous chapter has argued, translations can be expensive, time-consuming, and prone to error since local translators may not have a strong command of technical terms.143 As for the temporal constraints that local stakeholders may experience, complaints before the ACHM can only be submitted before the final evaluation of the project. However, some kinds of harm or damage may only materialize years after the project is over. This means that all negative impacts that may be experienced after the final evaluation of the project will not be susceptible to review at the Fund level. In this regard, the IRM offers a best practice policy, as it permits local stakeholders to submit complaints within a period of two years after becoming aware of the impacts, or the closure of the project. Local stakeholders may experience other accessibility-related problems. By way of example, they may not know about the involvement of the Funds or the existence of the redress mechanisms, they may be illiterate or may be based in remote areas and lack services to submit a complaint. In this context, the self-initiation modality of the GCF is a best-practice policy. Of the nine complaints the IRM has studied, one was self-initiated. The case relates to the aforementioned project Building the Resilience

143 See, Chapter 4, Sect. 4.2; See also, TANGO International & ODI (n 87), para.

135.

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of Wetlands in the Province of Datem del Marañón, Peru.144 In 2019, the IRM initiated a preliminary investigation due to concerns raised in different articles published in the press on the impact of the conservation areas on the customary rights of indigenous peoples over the lands. It was concluded that there was enough evidence to initiate an investigation against the backdrop of the potential impacts of the project, and considering the fact that people potentially affected were unlikely to be able to access the IRM, both because some of them were illiterate, and because others did not know about the involvement of the GCF in the project or the existence of the IRM.145 In this context, the lack of selfinitiation procedures in the CRC and ACHM means that the potential negative impacts of projects may never be reviewed, as would have been the case of the project in Peru if the IRM had not included the option of this proactive modality. Finally, the IRM offers a best practice policy in that it can receive complaints directly and study them without the involvement of the PAs. On the other side of the spectrum, the ACHM is not directly accessible to local stakeholders. It can hear complaints only when the grievance mechanism of the competent PA has not succeeded in settling the dispute. In the middle between these two, the CRC directly receives complaints, although it may defer the matter to the grievance mechanism of the competent PA. Accordingly, the CRC may operate conjointly with the review mechanism of the relevant PA. Reasons such as fear of retaliation may deter some local stakeholders from using PAs’ grievance mechanisms. This is because recipient countries might be reluctant to have their projects reviewed, as this often delays the disbursement of Funds. Given the closer connection of PAs to recipient countries’ governments,—which in some cases may be a national body—the chances of stakeholders not complaining about a project or program may be higher if they do not have direct access to a review mechanism at a Fund level.146 In order to prevent this, the Funds’ review 144 GCF (n 260). 145 IRM, ‘IRM Initiated Proceedings: C-0002-Peru’ (2019) GCF, para. 22. 146 For a similar argument on fear of retaliation of individuals, see, Grimm, Weischer

and Eckstein (n 127), 33; For the reluctance of recipient countries to have their proposals reviewed, see, D. Clark, ‘Understanding the World Bank Inspection Panel’ in D. Clark et al. (eds), Demanding Accountability: Civil Society Claims and the World Bank Inspection Panel (2003) Rowman & Littlefield Publishers, 15–17.

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mechanisms offer confidentiality procedures through which the identity of complainants is anonymized. However, local stakeholders may not be aware of this, or may not fully rely on them. Against this backdrop, lack of direct access to a global grievance mechanism in the AF, or potential deferral to the PA’s grievance mechanisms by the CRC, may prevent stakeholders from complaining about a project or program. Limited experience in using the review mechanisms thwarts the possibility of illustrating an example in which fear of reprisal deterred a complainant from submitting a complaint, or more generally, from ascertaining whether the policies of the review mechanisms may give rise to access issues in practice. Against this backdrop, the record of the Inspection Panel can be exemplary. This is because it has some accessibility policies that are similar to those of the review mechanisms of the Climate Funds. In relation to the local stakeholders that can submit complaints, the Panel can study complaints filed by two or more people who are based in the territory of a recipient country and who have been, or are likely to be, adversely affected by a Bank-financed project.147 Save the fact that the Climate Funds’ review mechanisms can study complaints from just one individual and the Panel from more than one, the subjects with a right to submit a complaint are basically the same in all of them. The procedure to submit a complaint is also very informal. It consists of a letter or email indicating the identity of the requesters, the project and the harm it has caused, the actions or omissions of the Bank with respect to the design or implementation, a description of the steps taken to bring the issue to the attention of Bank staff, and, if available, supporting information.148 Moreover, it can be written in any language, as with the CRC and IRM.149 Requests to the Panel are more constrained in time, as they can only be filed before the disbursement of the financing reaches 95%.150 The Panel can receive complaints directly without these having to pass by the grievance mechanism of the implementing entity,151 although it cannot self-initiate a review of a project.

147 Inspection Panel (n 559), para. 10. 148 Ibid., paras. 12, 14, 17 and 19. 149 Ibid., para. 15. 150 Ibid., para. 11. 151 See in general the requirements for submitting a request, ibid., para. 10.

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So far, the Panel has not received criticisms in relation to time constraints. However, the Panel’s experience can exemplify the fact that fear of reprisal can become a barrier to access to the review of a project or program. When the Inspection Panel reviewed the China Western Poverty Reduction Project, the Chinese government interpreted the investigation by the Panel as an interference with its access to funding. The recipient country complained about the fact that the mechanism was “being used as an instrument to oppose China politically, acting as a proxy for those who are waging a campaign against the sovereignty and integrity of the country.”152 Given the heightened risk reprisal, the complaint was submitted through outside representation—the US NGO International Campaign of Tibet. Moreover, when the Panel traveled to the project area, its members observed a “climate of fear” among local stakeholders.153 In light of this, the review mechanism of the World Bank was the only possibility to have the project reviewed by a non-Chinese entity, as the implementation arrangements of the project were with national and local agencies.154 This case offers a clear illustration of some recipient countries’ reluctance to have their proposals reviewed due to concerns that this will cause delays.155 In this regard, empirical evidence from a study of multiple inspection requests of the Panel suggests that local stakeholders in recipient countries that repress political rights, or in which there are few CSOs mobilized around environmental issues, are not as likely to avail themselves of the Inspection Panel when their interest is impaired by a World Bank project.156 Against this backdrop, direct access to a review mechanism at a Fund level rather than through the national implementing entity of the project may diminish fear of retaliation. However, the fact that

152 Quoted in S.R. Roos, ‘The World Bank Inspection Panel in its Seventh Year: An Analysis of Its Process, Mandate, and Desirability with Special Reference to the China (Tibet) Case’ (2001) 5 Max Planck Yearbook of United Nations Law, 479. 153 Wong and Mayer (n 562), 509. 154 World Bank, ‘China-Western Poverty Reduction Project #CNPE46564’ (1999)

World Bank, para. G, https://archive.globalpolicy.org/socecon/develop/cnpov.htm, accessed 14 May 2021. 155 Clark (n 593), 15–17. 156 Buntaine (n 105).

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projects in some recipient countries are still unlikely to be reviewed by the Panel implies that this measure alone might not suffice. Accordingly, from the experience of the Inspection Panel, at least three things can be concluded: (1) recipient countries may be reluctant to have their proposals reviewed; (2) fear of reprisal may be a factor that deters local stakeholders from submitting complaints about a project; and (3) direct access to a review mechanism is crucial for maximizing the possibilities that local stakeholders submit complaints about negative impacts of projects. However, the evidence that projects in some countries are unlikely to be reviewed by the Panel, together with the IRM’s selfinitiated procedure on the project in Peru, reveal that, in practice, some local stakeholders may not have access to the review of a project that negatively affects them, even when the review mechanism offers direct access. 4.3

Substantive Assessment

In relation to the types of complaints and standards that the review mechanisms are entitled to examine, each review mechanism follows different approaches. The ACHM and the IRM—in problem-solving modality—have the authority to examine any type of adverse effect that local stakeholders may have suffered. However, for the compliancereview procedure, the IRM policies establish that it can only investigate complaints that relate to the breach of the GCF policies and procedures. The CRC refers to a non-exhaustive list of elements that include the GEF policies, stakeholder consultation, and perception of mismanagement. This open-ended fashion seems to also include other types of conflicts among parties resulting from adverse effects of projects or programs, even when these are not prohibited by the norms. Therefore, the problem-solving assessment in all review mechanisms seems to be open to reviewing complaints related to any type of (potential) adverse effect that may or may not result from a policy breach. Notably, none of the policies establish any substantive benchmark in relation to the level of acceptable adverse effects on people, which makes the problem-solving assessments more fact-oriented. Accordingly, when solving problems related to a project or program, the review mechanisms generally seek to prevent adverse effects rather than achieve compliance with their norms. Yet, the IRM offers a best practice policy in that the ultimate agreement solving the conflict must be respectful of the GCF’s

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norms and policies. For instance, the IRM’s case register states that the GCF took note of the content of the agreement of the parties to the conflict over the Saïss Water Conservation Project before the IRM decided to close the case.157 As for the other review mechanisms, nothing is mentioned in their policies or websites, and given the lack of record of case summaries, it cannot be ascertained to what extent their review is, in the end, norm-oriented. As far as the IRM’s compliance-review modality is concerned, its scope is limited to examining whether the GCF adheres to its policies and procedures. This means that if the Fund has been compliant with them, the review mechanism reports this and takes no further action.158 For instance, in the Bio-CLIMA case in Nicaragua, the complainants raised concerns about a range of adverse effects, such as violent conflicts, land encroachments, and human rights violations. However, the IRM focused its analysis on evaluating the alignment of the Fund and the PAs with the GCF’s policies, and on whether the raised concerns were linked to potential violations of these policies. Accordingly, in these types of procedures, the substantive dimension of the project and the quality of the outcome is relegated to a second background at the shade of respect for the Fund’s policies. This is because, as may be inferred from the last two chapters, the obligations of the Funds and of the proponents under the Funds’ policies and procedures are clearly distinguished. Consequently, the norms contained therein only bind the Funds to procedural obligations of means rather than substantive outcomes. More concretely, their environmental and social policies only establish due diligence obligations such as evaluating the risks of the projects or programs for local stakeholders identified by project proponents in the proposals, (in relation to the Funds’ environmental and social safeguards),159 or reviewing local stakeholder participation.160 This means that the Funds are not obliged in relation to a particular result, in 157 GCF IRM (n 415). 158 The IRM policies establish that in this case it submits its report to the GCF Board

and takes no further action. See, GCF (n 519). 159 In relation to the GEF, see GEF (n 167), paras. 11–13; In relation to the AF, see AFB (n 176), para. 8; In relation to the GCF, see GCF (n 202), para. 11. 160 In relation to the GEF, see, GEF Council (n 138), para. 10; In relation to the AF, see, AFB (n 183), Annex 5, 10; In relation to the GCF, see, GCF (n 202), paras. 13, 14(a)(i) and 15; See also, GCF (n 205), paras. 27 and 31ff.

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terms of specific social human rights and environmental standards (or lack of a result, such as local stakeholders not being harmed). While these due diligence obligations increase the involvement of the Funds in the project design, it also means that the Funds may be able to claim that they have fulfilled their obligations when their review mechanisms detect (potential) harms to local stakeholders arising from a project or program, thereby avoiding substantive accountability, as exemplified by the Bio-CLIMA case. Moreover, it has been argued that global entities should adhere to the standards of transparency and participation. However, in compliancereview assessments, the IRM can only take these standards into account to the extent that they are regulated in the GCF policies and procedures. As my analysis from the previous two chapters indicates, these standards have not been entirely developed in the GCF’s policies and procedures. Coupled with the fact that these policies only pose procedural obligations of means and not of results, this means that the IRM might not ensure participation and transparency to a sufficient degree when adherence to policies fails to guarantee sufficient respect for these standards. Furthermore, local stakeholders may not be sufficiently aware of the Funds’ policies and procedures to identify issues of compliance. This is because, as the case study of the complaint over the project in Peru demonstrates, projects may affect individuals with limited educational or political resources. On top of this, these stakeholders may struggle to understand the Funds’ policies since these are usually available only in English. Accordingly, local stakeholders may not be able to process the harm that the project or program has inflicted upon them in terms of the policies of the Fund. The case studies from the last two chapters help reflect on the dangers of centering the substantive assessment around the policies of the Funds. In relation to participation, the LDCF project Developing Core Capacity to Address Adaptation to Climate Change in Tanzania in Productive Coastal Zones —analyzed in Chapter 3—demonstrates that projects may fail to ensure that all key stakeholders participate in the project or program design, even when they adhere to GEF policies.161 As for transparency, the GCF’s Saïss Water Conservation Project —studied in Chapter 4— reflects how, in spite of projects adhering to the GCF’s policies, local

161 See, Chapter 3, Sect. 4.1, above.

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stakeholders may receive little information about the aims and activities of a project.162 If these cases were reviewed according to the policies of the GCF, and the standards of participation and transparency contained therein, the IRM would not be able to request the redress of these harms. The Inspection Panel is subject to very similar constraints. This is because, according to its policies, its assessment is limited to analyzing whether the harm “has totally or partially resulted from failure of the Bank to comply with its policies and procedures.”163 The clearest example of a review of a project that has been in compliance with the Bank’s policies and yet has been problematic is on the Chad-Cameroon Oil Pipeline Project.164 The project aimed at drilling 300 oil wells in the Doba region of southern Chad and the construction of an export pipeline through Cameroon to an offshore loading facility. Mr. Ngarlejy Yorongar, a Member of Parliament in Chad’s National Assembly, filed the complaint on behalf of more than a hundred residents before the Panel. They claimed, among other things, that the project violated a number of policies of the World Bank because environmental assessments had not been conducted, and because the project posed a great threat to local communities and the environment.165 The Panel found that there was indeed a violation of the Bank’s policies in relation to the lack of some environmental and cost–benefit assessments, and the fact that the Bank had failed to require them.166 However, insofar as the project had included a water quality monitoring program and the project implementation was at an early stage, it was considered that concerns about pollution of surface water sources were not attributable to the Bank.167 Moreover, the Panel found that there were possible air pollution, natural

162 See, Chapter 4, Sect. 4.1, above. 163 Inspection Panel (n 559), para. 1. 164 World Bank, ‘Chad-Cameroon Petroleum Development and Pipeline Project: overview (English)’ (2021) World Bank Group, https://documents.worldbank.org/en/ publication/documents-reports/documentdetail/821131468224690538/chad-cameroonpetroleum-development-and-pipeline-project-overview, accessed 30 June 2021. 165 Inspection Panel, ‘Investigation Report. Chad-Cameroon Petroleum and Pipeline Project (Loan No. 4558-CD); Petroleum Sector Management Capacity Building Project (Credit No. 3373-CD); And Management of the Petroleum Economy (Credit No. 3316CD)’ (2002) World Bank, paras. 2–4. 166 Ibid., paras. 9–13. 167 Ibid., paras. 19–21.

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habitats, forestry, and pest management concerns, but neither were these the responsibility of the Bank.168 This case demonstrates that, as long as the Bank adheres to its procedural responsibilities, it cannot be held accountable for any harm resulting from the project unless it stems from a breach of the Bank’s policies. Against this backdrop, the Panel has received similar criticisms to those that I have raised in relation to the IRM. Some authors argue that local stakeholders may not be sufficiently aware of the World Bank’s policies and procedures to identify issues of compliance, affecting their ability to fundament their damages and consequently have access to remedies.169 Others have criticized the fact that policies simply oblige the Bank to engage in procedural conduct, which often consists of requiring the borrowing country to undertake certain actions.170 For example, the Bank has to review the capacity of the applicant to develop and implement the project and meet economic and social requirements171 ; or to identify key environmental and social risks and impacts.172 Therefore, when harm is caused, but the Bank has fulfilled these procedural obligations, the Bank cannot be found responsible. Accordingly, it is frequently argued that a mandate focused on compliance with policies and procedures constrains the ability of the Panel to promote redress of harm suffered by local stakeholders.173 However, the Inspection Panel has established that the Bank cannot evade its responsibilities simply because the primary obligation lies with a third actor. In the review of the Bangladesh: Jute Sector Adjustment Credit Project, the Panel asserted that the Bank cannot “disclaim responsibility for adverse effects of Bank/IDA-financed projects simply because

168 Ibid., paras. 22–25. 169 Wong and Mayer (n 562), 507–508. 170 See, C. Passoni, A. Rosenbaum and E. Vermunt, ‘Empowering the Inspection Panel:

The Impact of the World Bank’s New Environmental and Social Safeguards’ (2017) 49 New York University Journal of International Law and Policy; See also, Barlas and Tassoni (n 585). 171 World Bank, ‘OP. 4.00-Piloting the Use of Borrower Systems to Address Environmental and Social Safeguard Issues in Bank-Supported Projects’ (2005) World Bank, para. 33. 172 Ibid., para. 19. 173 Barlas and Tassoni, (n 585) 493; Passoni, Rosenbaum and Vermunt (n 617).

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it is not the executor of the activities included therein.”174 Likewise, in the Albania Power Sector Generation and Restructuring Project, the Panel maintained that the World Bank had responsibilities inherent to requirements that only refer to the borrower. The obligations to consult project-affected groups are not directly imposed on the Bank, and in that case, the issue arose due to consultations being conducted only after the site had been selected. Nevertheless, the Panel concluded that the Bank had failed to ensure that meaningful consultation had taken place before approving the project proposal.175 Against the experience with the complaint over the Chad-Cameroon Oil Pipeline Project, it is uncertain to what extent this approach is generally practiced in the work of the Panel. Yet, at least in principle, “the Bank cannot be a bystander in relation to harmful activities carried out in the context of Bank-financed projects.”176 The Panel seems to understand the Bank’s obligations as closely connected to those of the applicant country, allowing it to point to the former if it is somehow implicated in the harm. Therefore, in future compliance-review proceedings, the IRM might also be able to understand that the GCF is responsible for some adverse effects, regardless of whether the latter has adhered or not to its procedural obligations. Furthermore, the Inspection Panel also determines the adherence of the Bank to its policies according to a reasonable standard of care. This means that the Panel does not merely ensure that the Bank has followed its duties to the letter. Conversely, it interprets these duties by flexibly applying “reasonableness and common sense,”177 considering them “in

174 Inspection Panel, ‘Bangladesh: Jute Sector Adjustment Credit Project (Credit 2567BD) Eligibility Report’ (1997) World Bank, 4. 175 Inspection Panel, ‘Albania: Power Sector Generation and Restructuring Project (Credit No. 3872 ALB), Investigation Report’ (2009) World Bank. 176 Passoni, Rosenbaum and Vermunt (n 617), 947. 177 Inspection Panel, ‘Request for Inspection: Lesotho/South Africa: Phase 1B of

Lesotho Highlands Water Project. Report and Recommendation’ (1998) World Bank, 13.

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their entirety.”178 Accordingly, in practice, the Panel exercises its prerogatives by assessing the facts and circumstances of the case to ensure that the objectives of the policies are satisfied. To illustrate this approach, let’s return to the case of the Nepal Power Development Project. The Inspection Panel determined that the World Bank did not adhere sufficiently to its consultation policies with indigenous peoples. Even though these were free, prior, and informed as the policies mandate, the Panel established that consultations were not adequate, timely, and meaningful. As Passoni, Rosebaum, and Vermunt have put it, “the Bank cannot simply fulfill its obligations through procedural ‘box ticking’ but must be actively involved.”179 Therefore, the possibility exists that, in future compliance-review proceedings, the IRM embraces a flexible interpretation of the GCF’s policies guided by “reasonableness and common sense.” Such an approach could lead to the potential recognition of the GCF’s responsibility for adverse effects on local stakeholders irrespective of the former’s adherence to procedural obligations.

5

Final Remarks

The chapter has examined whether the Climate Funds are sufficiently accountable to local stakeholders, and the potential implications of their accountability levels for the rights and interests of the latter. By examining the accountability mechanisms that other global institutions have established, the chapter has shed light on how the Climate Funds should provide avenues for local stakeholders to have their project-related concerns reviewed and has pointed out deficiencies in their policies that may be contributing to the negative impacts experienced by these actors. Drawing from the literature on accountability in global institutions, it can be concluded that local stakeholders should be given the opportunity to have their concerns reviewed through a compliance-review procedure or a problem-solving procedure. These procedures should be directly accessible, although in some instances local stakeholders may first need to appeal the decision to a different body. The procedures should assess 178 Inspection Panel, ‘The Quinghai Project: A Component of the China: Western Poverty Reduction Project (Credit No. 3255-CHA and Loan No. 4501-CHA). Investigation Report (1999)’ World Bank, xiv-v. 179 Passoni, Rosenbaum and Vermunt (n 617), 941.

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either whether decisions have caused negative effects, or whether these adhere to the policies and internal norms of the global administrations. These procedures may ultimately lead to resolutions considering adequate remedies such as complying with breached policies, developing a remedial plan, and compensating for the negative effects. In light of this, the chapter has provided a comprehensive analysis of the Climate Funds’ review mechanisms and highlighted best practices. From the analysis, it can be concluded that the Funds are to a certain extent accountable to local stakeholders. Although they are significantly different, all the Funds include review mechanisms at the Fund level to handle complaints from local stakeholders adversely affected by a project or program. The submission triggers a number of actions. Depending on the mechanism, these go from a facilitative role among involved actors to an investigation that may end up with a report or with recommendations of remedies. On the one hand, the IRM offers a compliance-review procedure. When offering this procedure, the IRM determines the existence or scope of the norms and standards to which the Fund is obliged, and is adversarial, granting local stakeholders the possibility to set the Funds to these norms and standards. Against this backdrop, the compliance-review procedure of the IRM amounts to a legal accountability mechanism with review power, as it scrutinizes actions taken by the account giver, the Fund, that deviate from its pre-established norms and procedures and determines a remedy for local stakeholders against said actions. When doing so, the IRM can promote accountability to local stakeholders by offering them access to resolve their complaints through a recommendation addressed to the GCF Board. On the other hand, all three review mechanisms can perform problemsolving assessments. When doing so, they seek to promote mutually acceptable solutions and potential remedies by the affected parties themselves. The problem-solving assessments of the review mechanisms do not determine the existence or scope of the policies and procedures of the Funds—except for the IRM, but only to the extent that the resolution agreement does not breach any of the GCF’s policies and procedures. Accordingly, this proceeding does not seek to accord local stakeholders the possibility to set the Funds to these norms and standards, but rather to prevent adverse effects, even where these are not prohibited by the norms. Against this backdrop, when operating through this modality, the review mechanisms do not amount to legal accountability mechanisms, as they

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do not permit local stakeholders to call the Funds to justify their conduct in the light of their norms and standards, and to provide some form of remedy, strictly speaking. However, the fact that complaints are made publicly available offers local stakeholders the opportunity to collectively organize and apply pressure. This can have positive effects in the promotion of accountability of the Funds to local communities, as stakeholders have the opportunity to have their evidence observed, while making it hard for the Fund to ignore the alleged adverse effects and advancing the redress of adverse effects. Overall, while climate finance is provided by the Funds to states, all review mechanisms grant standing to individuals that are not party to the transfer of funds and yet that consider they are, or expect to be, affected by the project. Without these mechanisms, individuals could file project-/ program-related complaints to the grievance mechanisms of the PAs— although fear of reprisal may be an impediment for doing so. And even then, local stakeholders may not be able to have their complaints enforced against the Funds, given that the latter are independent of the former. In this context, the review mechanisms of the Funds allow local stakeholders to play a prominent role in the resource allocation process by exposing funding decisions to further scrutiny by a third-party, impartial actor. This enables local stakeholders to resolve their complaints either through a recommendation addressed to the decision-making organ of the Fund or through a facilitative procedure that can publicly expose the decision and exert pressure to redress it. All the best practices identified on the accountability mechanisms of the Climate Funds can be found mainly in the IRM of the GCF—except for the fact that complaints can be submitted in any language and also in the CRC. The IRM further offers best practice policies in that stakeholders can request both a problem-solving and a compliance-review procedure. Moreover, its policies specify that agreements resulting from the former procedure must respect the GCF’s internal norms, and further list the remedies that (potentially) negatively affected local stakeholders may be granted. Likewise, the latter can directly access the IRM without further involvement of the PAs’ grievance mechanisms and may do it within two years from the time they first became aware of the negative impacts or the closure of the project. Finally, the IRM is the only review mechanism offering a self-initiation modality. However, the Funds still fall short in their efforts to fully promote accountability to local stakeholders. Overall, the facilitative function of

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the CRC, the structural dependency of the ACHM and IRM on their Funds’ Boards, and the fact-finding nature of the former and the recommendatory nature of the decisions of the latter imply that their actions do not commit the Fund to rectifying problems. This means that any consequences similar to sanctions, remedies for people harmed, or changes in future behavior are left to the discretion of the Boards and Councils. Moreover, the mechanisms present some problems in terms of access. The ACHM only studies those complaints that are submitted in one of the six official languages of the UN, only by the final evaluation of the project, and cannot be directly accessed by local stakeholders; and together with the CRC, it cannot self-initiate proceedings. Finally, when the CRC and ACHM offer problem-solving assessments, it is unclear whether agreements reached by parties can ignore the policies and procedures of their respective Funds. At the same time, during its compliance-review procedures, the IRM can only assess complaints against its own policies, which may impede a sufficient securing of participation and transparency. These and the rest of the shortcomings highlighted in this chapter significantly hamper local stakeholders’ ability to have their grievances reviewed by an independent body. In cases where local stakeholders are unable to directly access these mechanisms, they are left without an effective recourse when their rights and interests are adversely affected by the Fund-supported projects. An illustration of this can be found in the China Western Poverty Reduction Project, where lack of access to the Inspection Panel would likely have left local stakeholders’ grievances unaddressed. Even in occasions where these grievances are reviewed, remedies may not be enough to hold the Funds to certain standards, either because these standards or benchmarks are not fully regulated in the policies and procedures of the Funds, because the review facilitates an agreement between parties and ignores compliance with the Funds’ rules, or because of the lack of bindingness of the remedies, as exemplified in the case on the Bio-CLIMA: Integrated climate action to reduce deforestation and strengthen resilience in BOSAWÁS and Rio San Juan Biospheres. This can lead to inconsistent responses to complaints, and potentially leave affected stakeholders without adequate redress. Consequently, the deficient performance of the review mechanisms of the Funds translates into an accountability deficit toward local stakeholders. In cases where adverse impacts manifest, these deficiencies serve as a barrier to effectively address and rectify these negative consequences. As a result, the inadequacy of the accountability mechanisms contributes

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to the solidification and exacerbation of the adverse effects on local stakeholders’ rights and interests stemming from projects. Moreover, these mechanisms are not capable of ensuring participation and transparency to a sufficient degree. To truly bolster transparency, participation, and accountability of the Funds, it is imperative to confront and rectify these limitations. The remaining question is how.

CHAPTER 6

Recommendations: Reforming the Climate Funds

1

Introduction

Throughout the past three chapters, the book has woven a tale of opacity, disregard, and limited accessibility that explains many of the unintended adverse consequences that climate projects have caused to local communities. Inadequate stakeholder engagement during project design and decision-making often leads to projects disregarding the unique circumstances of affected communities and neglecting environmental concerns, which can result in environmental degradation or even conflicts over resources. The insufficient disclosure of information not only limits the exposure of both Funds’ operations and projects to stakeholder scrutiny but also hinders the latter’s ability to understand potential repercussions, hampering their capacity to implement both corrective and preventive actions that could enhance accountability and avert negative impacts. Lastly, accessibility constraints and lack of commitment of accountability mechanisms’ actions to the Funds hinder local stakeholders’ ability to have project-related issues reviewed and rectified, thereby contributing to the solidification of adverse effects. Notably, the book has underscored the intrinsic interplay among these sources of adverse effects. For example, the exclusion of individual representatives from Board or Council meetings, coupled with the non-disclosure of minutes and deliberative materials, obstructs the

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 G. Larrea, Climate Funds and Sustainable Development, Sustainable Development Goals Series, https://doi.org/10.1007/978-3-031-50218-7_6

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understanding of the rationales behind the funding decisions. Similarly, the absence of documentation reflecting justifications for project designrelated decisions impedes ascertaining whether the voices and views of local stakeholders were adequately considered. Likewise, the ability of individuals to meaningfully participate in project design and decisionmaking depends on their access to sufficient and comprehensible project information. And ultimately, insufficient transparency undermines the accountability of the Funds by hindering local stakeholders’ ability to determine whether the former have adhered to applicable policies and internal norms, whereas inadequate accountability mechanisms obstruct the promotion of transparency and participation when these standards have been disregarded. In light of these intertwined dimensions, it is evident that addressing the negative impacts of climate projects necessitates comprehensive reforms in transparency, participation, and accountability of the Climate Funds. Only through a holistic approach encompassing reforms in all three areas can be ensured that SDG 13 is realized through climate projects that resonate with the very communities they seek to support. This last chapter is dedicated to presenting the key reforms capable of fostering this transformation. Drawing not only from the best practices observed across the Climate Funds but also from other MDBs, it will deliver recommendations tailored to policymakers within each Fund. Ultimately, the chapter will demonstrate the viability of enhancing transparency, participation, and accountability of the Climate Funds through policy reform, in order to fully operationalize SDG 13 while simultaneously avoiding or mitigating the negative impacts that these Funds currently inflict on local communities.

2

Recommendations for Participation 2.1

Range of Participation

Determining those who may be affected by a proposal and should accordingly participate is difficult, and there is no ‘one-size-fits-all’ rule. In order to secure fair and balanced participation of all potentially affected local stakeholders, the involvement of the Fund Secretariat in stakeholder identification and careful oversight of the range of participation is a best

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practice policy that is present and successfully performed in all Climate Funds.1 However, while all Funds require that proposals present evidence of having identified stakeholders and of having consulted them, more guarantees would be offered if all proposals included a concrete list of all local stakeholders directly and indirectly involved in consultations, with a reference to the criteria considered for their selection as the AF does. This is because the Fund Secretariat could more easily scrutinize the range of participation and examine whether all relevant stakeholders have been consulted and the reasons behind their selection. Otherwise, the Secretariat could miss key stakeholders, as happened in the LDCF project Developing Core Capacity to Address Adaptation to Climate Change in Tanzania in Productive Coastal Zones. Another valuable measure to prevent such oversights is the parallel scrutiny of compliance with consultation procedures conducted by civil society itself. In case where local stakeholders believe that consultation has been inadequate, they should be given an opportunity to report reasoned and substantiated concerns to the Secretariat. While there are no examples of such practice at a Fund level, it is a practice present in EU law. By way of example, under the EU Illegal Timber Regulation,2 NGOs and other local stakeholders can deliver substantiated concerns to the EU or state authorities where non-compliance is suspected.3 These authorities are then obliged to carry out checks to evaluate these concerns and examine any shortcomings in the implementation of the Regulation by operators.4 Additionally, in order to ensure wider public engagement, Secretariat scrutiny should be combined with a notice-and-comment procedure by publishing the funding proposal on the Funds’ website upon receipt. Indeed, some of the excluded stakeholders in the LDCF project in Tanzania considered that more platforms should have been created to

1 For a similar argument, see Schalatek (n 52), 963–964. 2 EU, ‘Regulation (EU) No 995/2010 of European Parliament and of the Council

of 20 October 2010 Laying Down the Obligations of Operators Who Place Timber and Timber Products on the Market’ (2010) Official Journal of the European Union. 3 Ibid, paras. 21 and 22, and art. 10(2). 4 Ibid.

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facilitate their engagement with project coordinators.5 In this context, the AF’s practice of offering an additional notice-and-comment procedure prior to Secretariat screening is a best practice that could be adopted by the other Climate Funds. However, the tight three-week timeframes for reviewing lengthy proposals, which are rarely in the local language of stakeholders, should be extended. Furthermore, efforts should be made to enhance stakeholders’ ability to provide feedback by granting these more resources.6 In relation to observer participation in decision-making, observers should be given the opportunity to attend closed sessions. To facilitate this, the GEF Funds and AF could simply require observers to sign a confidentiality agreement, as the GCF does. Furthermore, to enhance stakeholder representation in decision-making, the Funds should allow a higher number of observers representing the diversity of geographies and constituencies, including indigenous peoples. By way of example, the Forest Carbon Partnership Facility’s governing participant committee includes a substantial number of observers: four representatives of CSOs (one each from Africa, Asia, Latin America, and developed countries); four indigenous peoples’ representatives (three regional, and one representing the chair of the UN Permanent Forum on Indigenous Peoples); two representatives of the private sector; and representatives of the secretariats of the UN-REDD program, the Convention on Biological Diversity, and the Forest Carbon Partnership Facility. Crucially, the selection of these observers should be publicly disclosed before the Council or Board meeting takes place, allowing local stakeholders (potentially) affected by a proposal to contact them. This way, observers can effectively raise stakeholders’ concerns or interests in the decision-making process when the proposal is discussed. Another possibility is adopting a system similar to the AF, which does not place a ceiling in relation to the number of observers permitted in AFB meetings. The fact that any observer can potentially attend the meeting and that it can easily be ascertained which observers can or will attend makes it more accessible for local stakeholders to have their interests and concerns represented before the adoption of a funding decision. However, observers must be accredited UNFCCC observers, a process

5 Omukuti (n 5). 6 For a similar suggestion, see Grimm, Weischer and Eckstein (n 127), 35.

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that takes more than a year, and the selection process is not clear. The Montreal Protocol Multilateral Fund offers a similar system, although its meetings are open to any interested observers who only need to contact the Secretariat in advance if they wish to attend for the first time.7 This system would allow any local stakeholder to be directly represented in the decision-making process. 2.2

Influence of Participation

The GCF FPIC policies should serve as a model for other Funds to replicate. In the case of the GEF Funds, the process of obtaining indigenous peoples’ consent in projects and programs should result from these communities’ own deliberations rather than an agreement between these and project proponents. Moreover, it is essential to introduce an FPIC policy within the AF to ensure the adequate protection and respect of indigenous peoples and their lands, resources, and livelihoods. However, the FPIC should neither be simply reduced to “a consent of a majority,” nor grant veto power to every individual member of an indigenous community. FPIC is a collective right of indigenous peoples that should not be overridden by individual interests. Accordingly, it should be examined case-by-case, depending upon the premises of the consultation, the number of objections, and the collective interests involved. To address this, FPIC policies should at least ensure that the concerns of those in opposition are considered in the final decision, including measures for mitigating negative impacts and providing compensation for harm inflicted.8 With regard to the consultations, all Funds should clearly outline in their policies when these should take place. This should at least include consultations for every change the proposal may undergo, as in the AF, in order to ensure that stakeholders have participated in relation to the latest version of the project or program. Likewise, the Funds should also define what consultations should consist of. Stakeholders should be allowed not only to give input on project ideas but also to propose their own ideas,

7 Ballesteros et al. (n 65), 284; Australian Government, ‘Australian Multilateral Assessment March 2012. Multilateral Fund for the Implementation of the Montreal Protocol’ (2012) Australian AID, 13. 8 For a similar suggestion, see Ward (n 259), 84; see also, Shrinkhal (n 331), 59–63.

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as exemplified by the GEF Funds, enabling them to fully express their interests and concerns. Furthermore, policies should also establish procedural guarantees on the minimum requirements of consultation, facilitating the Funds’ assessment of whether stakeholders’ input has been meaningful and whether their views and interests have influenced the project proposal. In keeping with this, proposals should at least provide evidence of consultation with key findings in relation to suggestions and concerns raised by stakeholders, as in the AF, as well as responses to comments raised by stakeholders and proof of consideration of these comments in the proposal. In this regard, the Clean Development Mechanism (CDM) incorporates a best practice policy that could be replicated by the Climate Funds, for it offers very stringent stakeholder participation guidelines. Its rules oblige project developers to reflect on consultations and doubts raised by stakeholders by responding to the latter’s comments and to show how they have been taken into consideration in the project design documents.9 This further highlights the significant role of transparency in ensuring the influence of participation, as it allows verifying whether local stakeholder consultations are thorough and systematic, as well as tracking the receipt and acknowledgment of their input. This will be further discussed in the Sect. 3 below. With regard to observer participation in the Boards and Councils, accountability would be greatly enhanced if the Funds allowed observers to voice as many criticisms and comments as necessary and suggest item agendas without requiring consent from Board and Council members, and doing so prior to their discussion. This would ensure that the reflection of their views is not limited by the will of a Board or Council member or confined to pre-established agenda items. In this regard, the World Bank’s Climate Investment Funds serve as an exemplary model. These Funds have institutionalized formal observer roles for civil society, the private sector, and indigenous peoples encompassing three regions: Latin America, Africa, and Asia–Pacific. These can participate in committee and sub-committee meetings, with no limit

9 Dong and Olsen (n 130), 173.

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to their interventions, and are entitled to suggest agenda items and contribute to discussions.10 Additionally, a procedural requirement to give justifications in relation to those comments raised by observers would help ascertain whether their participation has been meaningful, and if their views and interests have had an influence on the approved project. Consequently, minutes and transcripts of meetings should reflect on the comments raised by observers and on the responses to these comments, as well as offer proof of consideration of these comments in the approved proposal. This recommendation will be further elaborated in the Sect. 3 below. 2.3

Resources Required to Participate Effectively

In order to ensure that all local stakeholders have the opportunity to participate meaningfully in consultations and influence the project design, they should have the ability to request and have direct access to funding that can enhance their technical capacity, knowledge, and participation capabilities. These resources should suffice for covering travel expenses, document translations, and organization of gatherings in which stakeholders can be informed about the proposals and exchange insights. One potential approach to guarantee this direct access is through the use of networks representing local stakeholders. These networks could be allocated a fixed percentage of the funds approved for the project or program that ensures that participation-related costs are covered and disbursed to relevant stakeholders upon request.11 Additionally, all Funds should replicate GEF policies and cover travel costs for any local representative participating as an observer in a Council or Board meeting.

3

Recommendations for Transparency 3.1

Sufficiency of Information and Reasons

The Funds should honor their policies on transparency and full disclosure of all non-confidential information. The GEF Funds should regularly review ostensibly available files to ensure that they can be accessed in practice. Furthermore, the GEF Funds should include in their policies stricter 10 Transparency International (n 173), 4. 11 For a similar suggestion see, Sharma (n 64), 5–6.

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obligations to disclose detailed budgets for local activities, the exact locations of proposed activities, and the identity of the communities that may be potentially affected by projects and programs. This would allow local stakeholders to assess the potential impact of projects on their communities and understand how project funds are allocated for specific purposes, in order to understand and evaluate the costs of funded activities.12 Additionally, the disclosed information provided by the Boards and Councils should also include the minutes, comments, and transcripts of the proceedings leading to the adoption of funding decisions. Alternatively, at the very least, the Funds should grant stakeholders access to these documents upon request, as the GCF does. This would enhance access to information about which elements of the proposal were discussed during the adoption of the funding decision and about the reasons put forward in favor of, or in opposition to, the proposal. Finally, regarding justifications, the Funds’ policies should establish obligations to include responses regarding the comments put forward by stakeholders during consultations or notice-and-comments procedures, and considerations as to how these have been taken into account in the proposal and subsequent decision-making. Building upon the recommendation offered in the previous section in relation to adopting the CDM’s policies on stakeholder consultation, this approach not only enhances stakeholders’ influence in consultations but also their ability to scrutinize that justifications are adequate and sufficient and that proposals take their needs and interests into account. As a result, stakeholders can better comprehend, evaluate, and scrutinize projects and programs. Likewise, the Fund policies should oblige their Boards and Councils to explain their decisions to approve proposals, following the example set by the AF’s policies. Also here, however, policies should specify that explanations shall relate specifically to the comments put forward by observers, and offer evidence of having considered these comments. This practice is necessary to ensure that stakeholders’ interests and concerns have been taken into account in the project—in addition to ascertaining whether their participation has been meaningful, as the previous section argues. Moreover, the Funds should provide guidance on how they weigh the criteria available, and establish obligations in their policies to provide exact

12 For a similar argument see, Fenton et al. (n 112).

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information about the scoring of applications in relation to these criteria, and the strengths and weaknesses of proposals. 3.2

Clarity and Accessibility of Information and Reasons

Stakeholders should have access to relevant, understandable, and digested information, so that they can evaluate projects and programs and understand any expected negative impacts. In keeping with this, project and program information should accommodate the language(s) of local stakeholders. English language-only documentation is unsatisfactory as may lead to the exclusion of many stakeholder groups.13 Nevertheless, translating every document into a different local language every time a Fund approves a project or program may be highly time- and resource-consuming and, ultimately, unrealistic in practice. In order to address this, the Funds should adopt a policy obliging the PAs to provide brief summaries of three to five pages in the recipient countries’ official language, in addition to the complete project proposal templates.14 This would permit local stakeholders to gain an idea of the main elements of the project, and how it affects them, in a simple and clear manner. Furthermore, it would also be beneficial for project-related information to be presented with narrative descriptions and other tools such as visual imagery and experiential scenarios balanced with scientific information.15 Additionally, another approach would be that proposals establish a sense of connection with the causes and consequences of climate change in a manner that ensures stakeholders see the relevance of the project for their locality and life.16 Finally, Board and Council information should be accessible in ways that take into account stakeholders’ needs, capacities, and resources.17 In keeping with this, the Funds should either directly include this information on the website of the project or program, or establish links to the concrete meeting as the GCF does. This would allow users to have access to all relevant information without having to navigate through 13 For a similar argument, see Schalatek (n 52), 963. 14 For a similar recommendation, see Grimm, Weischer and Eckstein (n 127), 34. 15 For a similar suggestion, see Shome and Marx (n 110). 16 O’Neill and Nicholson-Cole (n 110). 17 Schalatek (n 52), 962; Shome and Marx (n 110).

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several pages and Board or Council reports before finding the relevant information on a concrete project or program. Moreover, while webcasting meetings enable all local stakeholders to take advantage of a relatively low-cost way of increasing the transparency of decision-making, accessibility to meeting recordings should be further enhanced. In keeping with this, the GEF Funds and the AF should imitate the GCF’s practice policy of including the recordings in the agenda items of the meeting and enabling slide navigation. This feature would allow local stakeholders to directly reproduce the part of the meeting that they are interested in, rather than have to go through several hours of recordings. 3.3

Restrictions on Information and Reasons Disclosure

Information regarding deliberations in Councils or Boards is crucial for exposing the whole decision-making process to public and peer participation and scrutiny. This is because these deliberations play a decisive role in shaping the final decision, and therefore, access to them could help the applicant and stakeholders understand better the decision and the reasons underpinning it, and ensure that these are in compliance with the internal norms and policies of the Fund. In Stewart’s own words, “open deliberations and transparency tend to ‘level the playing field,’ alleviate information asymmetries, and check the influence of narrow interest groups.”18 Non-disclosure of deliberative information, such as the minutes or transcripts of proceedings, or the closure of sessions even to observers, might help preserve the integrity of the process and increase the ability to reach a decision. However, given the importance of this information, and the fact that Board and Council members are public officials deciding how public money should be spent, Funds’ policies should be amended in order to hold decision-making meetings in closed sessions or not disclose deliberative information only when strictly necessary as this could genuinely compromise or impede the adoption of the decision.19 Non-disclosure should be the exception, rather than the rule. A parallel 18 Stewart (n 113), 83; See also, E. Benvenisti, ‘The Interplay Between Actors as a Determinant of the Evolution of Administrative Law in International Institution’ (2005) 68 Law and Contemporary Problems, 323–324. 19 For a similar argument, see, Transparency International (n 173), 20.

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measure that could help preserve the integrity of deliberation without undermining the transparency of the Fund would be the anonymization of comments made by members of the Board or Council, as the practice currently followed in the GCF. Moreover, when deliberative information is not disclosed, or closed sessions are held, the reasons should be clearly and publicly explained to justify the exclusion of local stakeholders.20 This is because, as a consequence of the lack of disclosure of deliberative information, stakeholders may not understand a decision that can negatively affect their rights or interests. Moreover, as argued in the previous chapter, when closed sessions are held, observers may not be permitted to participate, which implies that stakeholders may not have their interests and opinions considered before the funding decision is adopted.21 Likewise, in situations where this information is not disclosed, local stakeholders should have access to summaries of discussions that should include reasons for or against the proposal and how these reasons are reflected in the final decision. At the same time, the AF should include request and appeals mechanisms with clearly set timelines, such as those in place at the GCF, so that local stakeholders can challenge the lack of disclosure and pursue access to unreleased information.

4 4.1

Recommendations for Accountability Legal Status of Decisions and Associated Remedies

The accountability of the Funds to local stakeholders would be greatly enhanced if all the review mechanisms were fully established as mechanisms entitled to adopt “hard” binding decisions through compliancereview procedures. This is because their decisions would commit the Fund, the PA, and the recipient country to rectify harm caused to local stakeholders’ rights and interests (assuming that such harm violates the policies, as recommended below). Accordingly, local stakeholders would be able to compel the Funds to respect their policies by exposing a project or funding decision to further scrutiny by an impartial third party, which would directly grant a remedy. Moreover, decisions adopted by review 20 For a similar suggestion, see Ibid, 06; see also, Elges (n 306). 21 For similar arguments, see Grimm, Weischer and Eckstein (n 127), 34; see also,

Elges and Martin (n 353), 15.

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bodies should take effect without the necessity of being further ratified by the decision-making organs of the Funds. This approach would enable review bodies to exert more independent scrutiny and control and govern the boundaries of the Funds’ powers, thereby constituting a robust system of legal accountability. However, it seems unlikely that the Climate Funds will adopt reviewing mechanisms with such wide powers. In the meantime, the compliancereview procedure of the IRM might be able to offer in practice a promising compromise between non-bindingness and promotion of redress of adverse effects and remedies. While it is too soon to argue whether this will suffice in promoting accountability to local stakeholders, especially against the backdrop of the inobservance of part of the IRM’s recommendations on the Bio-CLIMA: Integrated climate action to reduce deforestation and strengthen resilience in BOSAWÁS and Rio San Juan Biospheres, the overall experience of the Inspection Panel suggests that it might be a viable option in most instances. 4.2

Access to Review Mechanisms by Stakeholders

The ACHM should offer local stakeholders the possibility of submitting complaints in any language, as the CRC and IRM. Moreover, given the fact that some damage may only materialize after a project is completed, there should be no time constraints as in the case of the CRC, or if any, these should be considered in relation to when damage materializes, as happens in the IRM. With regard to the fact that the ACHM requires complaints to be first heard by the PAs, and the possibility of the CRC deferring these to the latter, both review mechanisms should offer direct accessibility as the IRM. This is especially important against the backdrop of fear of retaliation-related problems that may deter local stakeholders from submitting a claim, as exemplified by the China Western Poverty Reduction Project. Accordingly, the ACHM and the CRC should be able to directly investigate complaints from local stakeholders regardless of whether other grievance processes have previously been used.22 They should be complementary to other procedures at the hands of states,

22 For a similar argument, see, Grimm, Weischer and Eckstein (n 127), 33.

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PAs, international organizations, or external auditing bodies, and not dependent upon them.23 To further enhance the possibilities of redressing potential adverse effects, the IRM’s self-initiation modality is a best practice that can tackle local stakeholders’ accessibility constraints such as fear of reprisal and lack of skills or means to register a complaint. This is because it allows the mechanism to initiate an investigation when individuals are unable to access the IRM.24 The IRM’s experience with the revision of the project Building the Resilience of Wetlands in the Province of Datem del Marañón, Peru, which would not have been investigated without a self-initiation modality, demonstrates that this should be replicated by the other review mechanisms.25 4.3

Substantive Assessment

Finally, the review mechanisms should be able to examine both the breach of the Funds’ policies and the (potential) adverse effects of projects on the rights and interests of local stakeholders. In keeping with this, the CRC and ACHM should offer a combination of problem-solving and compliance-review as the IRM does.26 Moreover, the compliance-review modality of the IRM (and of the CRC and ACHM, in the case it was also adopted for these review mechanisms) should also be able to examine any complaint over projects or programs with adverse effects. In keeping with this, the Funds should establish substantive standards in relation to the quality of the outcome of projects and programs, and prohibit any adverse effects on stakeholders. Specifically, the Funds should be responsible not only in relation to the procedural obligations of means such as evaluating potential risks

23 For a similar argument in relation to the Inspection Panel, see, Buntaine (n 105). 24 S. Prasad and M. Kaushik, ‘Accountability at the Green Climate Fund: Taking a

Look at the Independent Redress Mechanism’ (2020) 50 Environmental Policy and Law, 168. 25 The review is of the project Building the Resilience of Wetlands in the Province of Datem del Marañón, Peru. See, IRM (n 592). 26 For a similar suggestion, see e.g., D.D. Bradlow, ‘Private Complaints and International Organizations: A Comparative Study of the Independent Inspection Mechanisms in International Financial Institutions’ (2005) 36 Georgetown Journal of International Law, 403.

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or reviewing local stakeholder participation but also regarding particular (lack of) results in terms of specific social, human rights, and environmental standards. On the one hand, this would permit local stakeholders to file complaints about a negative outcome of a project, regardless of whether the Fund has respected the procedural due diligence obligations they are currently responsible for—which the local stakeholders may not be aware of. In essence, this would enable local stakeholders to set the Funds to substantive standards in relation to the quality of the outcome of the project, going beyond mere procedural obligations of means. On the other hand, as Chapters 3 and 4 have demonstrated, participation and transparency policies are, in some cases, inadequate. In this setting, review mechanisms would be able to promote redress in those cases in which, in spite of adhering to its policies, the Funds may have insufficiently disclosed information or enabled stakeholder engagement. Another possibility is to replicate the Inspection Panel’s approach to the obligations of the World Bank regarding, on the one hand, the fact that the Bank cannot evade its responsibilities simply because the primary obligation lies with a third actor, and on the other, the reasonableness standard of care. The first approach would imply that even if the policies of the Funds are not amended, the review mechanisms should consider the Fund responsible for adverse effects in the context of Fund-financed projects. Following this approach would equally entail the review mechanisms of the Climate Funds to promote accountability of the Funds to local stakeholders in those cases in which the Funds have adhered to their procedural obligations and yet local stakeholders may have been, or may potentially be, negatively affected by the project or program. As for the reasonableness standard of care, the review mechanisms should also interpret the Funds’ policies and the borrowers’ obligations according to “reasonableness and common sense.” This would give the review mechanisms flexibility as to promoting redress and adequate levels of transparency and participation in situations in which the Fund’s policies have been followed, and yet this was revealed to be insufficient, as seen in the case of the LDCF project Developing Core Capacity to Address Adaptation to Climate Change in Tanzania in productive Coastal Zones.

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191

Final Remarks

The recommendations presented in this chapter represent the culmination of the book’s analysis on the entities tasked with operationalizing SDG 13. Overall, while SDG 13 has brought attention to the vulnerability of developing countries by emphasizing the need to fulfill the pledges to mobilize climate finance to them, the adverse impacts of the various Funds supporting these countries have not received sufficient attention. However, as this book has reflected, the fact that individuals find themselves bearing a higher cost of climate impacts due to this funding is the unsettling reality of many vulnerable communities. These recommendations contribute to the growing recognition of the necessity to reform the Climate Funds to address their shortcomings. Yet, they aim at shifting the more general focus on enabling more lending and efficiency to a less explored yet equally critical matter. An issue which, prior to the publication of this book, had only been addressed through inconsistent suggestions that failed to fully articulate the intricate and multifaceted interplay among participation, transparency, and accountability. The suitability of this book’s recommendations for the purpose of addressing the highlighted challenges is the result of both an extensive literature review on participation, transparency, and accountability of global institutions, and an in-depth and comparative analysis of the policies and practices of the Climate Funds and other MDBs. Building on the insights gained in the previous three chapters, these recommendations address gaps associated with the number of local stakeholders participating, the means they are offered to allow participation and the actual influence of this participation; the lack of clarity and sufficiency of information and the restrictions on information disclosure; and lastly the recommendatory nature and limited assessment of the decisions of the review mechanism and their accessibility by potentially affected individuals—all of which diminish the ability of local stakeholders to express their views before decisions are adopted, to understand and evaluate the decisions, and to expose the decision to further scrutiny by a third party, impartial actor. Furthermore, the comprehensive nature of the book’s analysis also addresses gaps within the literature, as it encompasses all dimensions distilled from global institutions’ research—that is, on the range, influence, and resources of participation; the sufficiency, clarity, and exceptions

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to information disclosure; and the accessibility to review mechanisms, the content of their analysis, and the legal status of their decisions and remedies. Moreover, this analysis provides a more exhaustive and thorough understanding of how the deficiencies in the Funds’ policies are intrinsically connected with each other and, at the same time, with the negative impacts that their funding decisions have inflicted on local stakeholders. It is uncertain when or even whether the necessary institutional reforms will be accomplished. Indeed, members and officials of global institutions may oppose some of the proposed reforms, fearing that they may result in an excessive transfer of power to the Funds, hinder organizational flexibility, impede decision-making effectiveness, or potentially incur significant resource and time costs. These circumstances raise several questions: to what extent will these global bodies develop in the directions suggested in this book? Will there be any modifications in terms of more transparency and participation of local stakeholders in the decisionmaking processes of the Boards and Councils? Will the reviewing bodies undergo reforms to take on a more active role in evaluating projects or programs? And if not, will their decisions ever be sufficient to provide ultimate redress to local stakeholders’ complainants? While only time can provide answers to these questions, the book’s recommendations may help capture the attention of policymakers to these pressing issues and provide them with a valuable tool for finding coherent solutions. Hopefully, one day, these recommendations will contribute to ensuring that those who stand to benefit from climate finance are not the ones who pay in the end.

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Index

A Aarhus Convention, 46 Ababda indigenous community, 27 Academia, 4, 33, 35, 42, 43, 127 Accessibility of information, 95, 98, 103, 107, 118, 119, 126 Access to the review mechanisms, 134, 159 Accountability, 4–6, 23, 28, 37, 40–42, 45, 89, 125–131, 134, 136, 147, 150, 158, 159, 167, 171–175, 177, 178, 182, 187, 188, 190, 191 Accountability mechanisms, 4, 30, 31, 35, 40, 42, 126–131, 135, 150, 155, 171–174, 177, 178 Account giver, 130, 150, 172 Account holder, 129–131, 150 Accredited entities, 21, 66 Adaptation costs, 10 Adaptation Fund (AF), 2, 14, 20, 23, 29, 34–36, 39, 49, 53, 59–62, 68–72, 74, 77–84, 95, 101–104, 113–121, 123–126, 136,

139–142, 163, 179–182, 184, 186, 187 Adaptation Fund Board (AFB), 14, 19, 21, 29, 34, 59–62, 72, 74, 75, 81–83, 101–105, 107, 114, 117, 120–124, 139, 140, 149, 166, 180 Adaptation projects, 14, 22, 23, 26, 27, 33, 38, 73 Additionality, 16 Ad Hoc Complain Handling Mechanism, 127 Admissibility, 134, 138 Adverse impacts, 4, 6, 22, 26, 27, 30–32, 42, 43, 102, 136, 142, 145–147, 160, 161, 174, 191 African Development Bank (AfDB), 20 AF Secretariat, 60, 61, 78, 139 Agenda 21, 46 Armed conflicts, 3, 7 Asian Development Bank (ADB), 20, 21, 116

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2024 G. Larrea, Climate Funds and Sustainable Development, Sustainable Development Goals Series, https://doi.org/10.1007/978-3-031-50218-7

215

216

INDEX

B Best practice policy, 69, 70, 74, 78, 79, 82, 114, 115, 117, 119, 120, 122, 149, 161, 162, 165, 179, 182 Binding decisions, 138, 147, 187 Biodiversity, 26, 30, 31, 79, 85 Biodiversity projects, 33 Board meetings, 60, 61, 64, 67, 75, 102, 103, 106, 116, 117, 120, 121, 124, 153, 180, 183 Budget, 27, 36, 90, 96, 102, 106, 111, 112, 123, 125, 184 C Carbon emissions, 24 Case studies, 5, 8, 23, 32, 33, 41–44, 84, 87, 115, 118, 119, 167 Civil Society Organizations (CSOs), 22, 26, 35, 42, 54–56, 58, 60, 63, 64, 66, 69, 72, 75, 76, 99, 164, 180 Clarity, 37, 40, 87, 91, 95, 98, 103, 107, 110, 111, 118, 125, 126, 185, 191 Clean Development Mechanism (CDM), 49, 182, 184 Climate action, 8, 11, 12, 33, 34, 152, 174, 188 Climate change, 1–4, 6–13, 19, 24, 25, 28, 38, 39, 42, 46, 73, 160, 185 Climate change-related costs, 9 Climate finance, 1–3, 5, 6, 8, 10–12, 15–19, 34, 41, 44, 46, 62, 89–91, 93, 94, 128, 173, 191, 192 Climate funds, 1, 2, 4–6, 8, 12–19, 22, 23, 32–35, 37, 39–44, 46, 52, 67, 68, 71, 77, 82, 83, 87–92, 94, 95, 109–112, 114, 118, 121, 123, 124, 126–130,

132, 136, 147, 148, 154, 163, 171–173, 178–180, 182, 188, 190, 191 Climate goals, 33 Climate impacts, 1, 4, 6, 8, 9, 27, 29, 191 Climate Investment Funds, 36, 182 Climate policies, 1 Climate projects, 23, 28, 32, 39, 41–44, 46, 92, 125, 127, 128, 132, 177, 178 Climate vulnerability, 10 Closed sessions, 61, 65, 74, 83, 94, 105, 109, 122, 180, 186, 187 Comparative analysis, 4, 6, 40, 44, 67, 128, 129, 147, 191 Complaints, 32, 37, 81, 114, 116, 131–145, 147, 148, 150, 151, 154, 156, 157, 159–163, 165, 172–174, 188, 190 Compliance report, 143 Compliance review procedure, 149 Conference of the Parties (COP), 12–15, 17, 34, 101 Confidentiality, 65, 74, 83, 93, 99, 101, 104, 109, 110, 124, 138, 141, 145, 163, 180 Conflict Resolution Commissioner (CRC), 136–139, 148, 149, 151, 159, 161–163, 165, 173, 174, 188, 189 Constitutional right, 29 COP Serving as the Meeting of the Parties to the Kyoto Protocol, 101 Council documents, 81, 111, 119 Council meetings, 46, 50, 55, 57, 58, 74, 75, 81, 83–85, 94, 96–98, 100, 101, 112, 120, 124, 177 Country Support Program (CSP), 58, 69

INDEX

Criticisms, 33, 40, 43, 51, 67, 87, 89, 110, 112, 122, 147, 155, 164, 169, 182 Customary rights, 27, 162 D Decisional participation, 46, 47, 50, 53, 55, 57, 60, 61, 64, 66, 74, 75, 80, 83 Decision-makers, 35, 41, 80, 81, 91, 94, 124, 136 Decision-making, 2, 11, 12, 14, 21, 26, 27, 33, 36, 38–41, 43–52, 55, 57, 62, 65, 67, 75, 76, 82–84, 89, 94, 103, 110, 117, 121, 124, 133, 135, 136, 149, 150, 173, 177, 178, 180, 181, 184, 186, 188, 192 Deforestation, 26, 77, 152, 174, 188 Deliberations, 47, 51, 52, 65, 68, 76, 77, 85, 90, 91, 94, 97, 99, 100, 102, 104, 105, 107, 109, 115, 117, 124–126, 181, 186, 187 Developing countries, 1–19, 25, 33, 41, 58, 62, 66, 67, 82, 87, 132, 191 Dispossession, 7, 27 Dispute resolution, 140 E Earth Summit, 11, 13 Efficient capital usage, 4, 35 Electoral accountability, 130 Eligibility criteria, 90 Eligible activities, 34 Environmental and Social Policy, 59, 61, 63, 65, 70, 104, 106, 108, 146 Environmental and social safeguards, 21, 37, 54, 91, 97, 114, 119, 166

217

Environmental degradation, 9, 33, 85, 177 Environmental welfare, 7, 22 Ethics and Finance Committee (EFC), 140 European Bank for Reconstruction and Development (EBRD), 20, 114

F Facilitative role, 137, 143, 148, 159, 172 Fear of reprisal, 163–165, 173, 189 Final evaluation report, 141, 147 Financial mechanism, 12–14, 17, 89 Financial resources, 10, 12, 13, 16, 41, 51 Food and Agriculture Organization (FAO), 20 Food insecurity, 3, 27 Food security, 9, 23, 24, 29, 33, 43 Free, prior and informed consent (FPIC), 54, 56, 57, 63, 65–68, 70, 76, 77, 84, 153, 181 Fundamental rights, 29 Funding decision, 4, 37, 40, 49, 51, 83, 90, 91, 93, 95, 96, 100, 102, 105–107, 109, 112, 117, 124–128, 130, 139, 142, 147, 173, 178, 180, 184, 187, 192

G GCF Board, 15, 22, 36, 63–65, 67, 76, 105–109, 121, 122, 132, 143–145, 149, 150, 153, 166, 172 GCF Secretariat, 108, 145, 151 GEF Agencies, 20 GEF Committee, 58

218

INDEX

GEF Council, 14, 21, 24, 28, 30, 31, 53–58, 72, 81, 96–99, 113, 119, 120, 122, 166 GEF Secretariat, 55, 68, 113, 137 GEF Trust Fund, 14, 19, 23, 24, 27, 30–32, 52, 53, 55, 79, 81, 85, 112, 125 Geraizeiros, 25 Global entities, 21, 44, 94, 128, 131, 134, 167 Global Environment Facility (GEF), 2, 3, 12–14, 16, 18–25, 27, 28, 30–32, 34, 36, 46, 52–58, 68–85, 95–100, 109, 111–113, 115, 117–120, 122, 124, 125, 136–139, 147, 148, 161, 165–167, 180–183, 186 Global governance, 45, 51, 129 Global institutions, 2, 4, 5, 45, 52, 83, 88, 90, 92–94, 123, 128, 131–133, 135, 171, 191, 192 Goal 13 of the United Nation’s 2030 Agenda for Sustainable Development, 2 Grant, 12, 15, 16, 29, 30, 56, 62, 63, 65, 71, 77, 83, 110, 112, 150, 154, 173, 181, 184, 187 Green Climate Fund (GCF), 2, 11, 14–18, 21–23, 25, 26, 34, 36–38, 53, 63–70, 72, 74, 76–83, 95, 105–111, 114–124, 132, 136, 137, 143–147, 149–154, 160–162, 165–168, 170–173, 180, 181, 184–187, 189 Greenhouse gas (GHG) emissions, 8–10, 23–25, 33, 77 Grievance mechanisms, 37, 132, 137, 141, 162, 163, 173 H Hierarchical accountability, 130

Human rights, 46, 77, 131, 133, 134, 148, 153, 166, 167, 190 I Immunity, 30 Implementing entities, 20, 137 Independent Redress Mechanism (IRM), 114, 123, 132, 143–146, 149–154, 157, 159–163, 165–174, 188, 189 Indigenous communities, 27, 30–32, 56, 57, 77, 78 Indigenous cosmovisions, 32 Indigenous people’s policy, 63, 65, 70, 138 Individuals, 1, 4–6, 8, 30, 31, 40–49, 53, 55, 56, 63, 65, 69, 74, 82–84, 123, 124, 127, 128, 132–135, 139, 142, 144, 147, 148, 162, 167, 173, 178, 189, 191 Influence of participants, 52, 56, 76 Information Appeals Panel (IAP), 110 Information disclosure, 40, 42, 88, 95, 99, 100, 104, 105, 108, 110, 121, 122, 192 Information Disclosure Policy, 105, 107–110, 146 Information gathering, 92, 124 Inspection Panel, 128, 129, 131, 154–159, 162–165, 168–171, 174, 188–190 Institutional reform, 4, 5, 33, 37, 192 Integrity, 46, 105, 121, 164, 186, 187 Interests of local stakeholders, 4, 5, 23, 37, 41–43, 82, 87, 123, 125, 127, 189 Intergovernmental Panel on Climate Change (IPCC), 8, 9, 11 Internal documents, 89, 90 International community, 10, 18

INDEX

International Fund for Agricultural Development (IFAD), 9, 20 International Monetary Fund (IMF), 35, 36, 89 International organizations, 18, 129, 189

J Justifications, 91, 92, 95, 97, 100, 102, 103, 106, 107, 109–111, 115, 117, 122–124, 130, 178, 183, 184

K Kyoto Protocol, 14

L Land tenure insecurity, 27 Least developed countries, 13 Least Developed Countries Fund (LDCF), 2, 13, 14, 19, 52, 53, 73, 80, 85, 96, 97, 167, 179, 190 Legal status of decisions, 135, 136, 139, 143, 148, 187 Literature review, 5, 8, 43, 44, 87, 127, 130, 191 Local communities, 4, 5, 7, 8, 23, 26–28, 32, 33, 35, 42, 43, 48, 53, 63, 71, 88, 91, 128, 168, 173, 177, 178 Local contexts, 32, 33 Local livelihoods, 28 Local realities, 6, 22, 38, 41–43 Local rights, 41 Local stakeholders, 22–24, 26, 29, 30, 33, 35–44, 46–53, 55, 58, 60–67, 70–72, 74–76, 78–84, 88–92, 95, 97, 98, 101, 103, 106–108, 110, 114–116, 118,

219

119, 122, 123, 125–128, 130, 132, 134–137, 140, 143, 148, 150, 151, 155, 158, 159, 161–169, 171–175, 177–180, 183–192 M Meeting agendas, 96, 111 Millennium Development Goals, 11 Minutes, 80, 89, 90, 94, 97, 100, 102, 104, 105, 107, 109, 111–115, 117, 120, 124–126, 177, 183, 184, 186 Mitigation, 3, 11, 14, 15, 22, 25, 27, 30, 35, 38, 66 Mitigation costs, 10 Mitigation projects, 13, 23–25, 33, 127 Mobilization of climate finance, 16, 18, 19 Monoculture tree plantations, 23, 26, 85 Multilateral development banks (MDBs), 15, 16, 18, 178, 191 Multilateral environmental agreements, 46 Multilateral implementing entities, 20 N National Designated Authorities (NDA), 19, 82 National Implementing Entities, 21 National Portfolio Formulation Exercises (NPFE), 58 Negative impacts, 1, 4, 7, 8, 22, 24, 26, 31, 33, 35, 37, 39, 40, 42, 43, 87, 123, 125, 127, 128, 136, 144, 145, 147, 153, 160–162, 165, 171, 173, 177, 178, 181, 185, 192 Networks, 55, 183

220

INDEX

Non-compliance, 125, 132, 139, 143, 146, 153, 155, 179 Non-decisional participation, 45–47, 49, 53, 56, 59, 61, 63, 65, 69 Non-governmental organizations (NGOs), 45, 55, 57, 58, 60, 62, 73, 134, 179 Norm-driven procedure, 139, 142 Notice-and-comment, 46, 49, 52, 53, 59, 61, 63, 67–70, 78, 83, 84, 91, 102, 116, 179, 180, 184 O Observers, 37, 55, 57, 60–62, 64–69, 74–76, 80–84, 91, 94, 115, 117, 122, 180–184, 186, 187 Official development assistance (ODA), 15–17 Ombudsman office, 132 Operational Policies and Guidelines for Parties to Access Resources from the Adaptation Fund (OPGs), 14, 19, 22, 103 Organisation for Economic Co-operation and Development (OECD), 15, 16, 19, 34, 45 P Paris Agreement, 12–16 Participation-related costs, 52, 183 Participation standard, 84 Partner Agencies (PAs), 18, 19, 21, 46, 48, 54, 60–63, 65, 67, 68, 70–72, 78, 83, 90, 92, 97, 98, 102, 104, 106–109, 115, 119, 124, 132, 137, 141, 144, 147, 149, 162, 166, 173, 185, 188, 189 Pledges, 12, 16, 18, 191 Pokomos Indigenous Community, 30 Policy documents, 57, 60, 90

Privacy, 93, 99, 104, 124 Private sector, 10, 15, 17, 18, 22, 64, 71, 76, 81, 180, 182 Problem-solving procedure, 132, 140, 148, 151, 171 Procedural norms, 134 Procedural standards, 139, 146 Proceeding transcripts, 113 Program, 13, 18, 19, 22, 23, 25, 26, 36, 48–50, 53, 54, 58–62, 67, 69, 71, 75, 81, 83, 89–93, 95, 96, 101, 103, 104, 106, 108, 112, 113, 119–121, 123–125, 134, 137, 139, 142, 144, 146, 147, 150, 161–165, 167, 168, 172, 173, 180, 181, 183, 185, 186, 190 Project and Programme Review Committee (PPRC), 114 Project design, 22, 29, 32, 37, 40, 43, 46, 48–50, 52–56, 59, 63, 65–70, 72–74, 78–82, 84, 87, 97, 99, 102, 106, 125, 126, 153, 167, 177, 178, 182, 183 Project documents, 98, 111, 124 Project implementation, 41, 42, 73, 88, 168 Project or program proposal, 21, 46 Public access, 89, 99, 100 Public participation, 46 Public scrutiny, 89, 125

R Range of participation, 44, 52, 59, 63, 69, 178, 179 Readiness Programme, 62 Reasonableness standard of care, 190 Recommendations, 5, 6, 41, 42, 57, 72, 88, 102, 116, 128, 133, 140, 143, 144, 147, 149, 150, 152–155, 157–159, 170, 172,

INDEX

173, 178, 183–185, 188, 191, 192 Regional Focal Points, 58 Regional Implementing Entities, 21 Regulatory choices, 100 Relocation, 30, 33 Remedies, 40, 41, 107, 115, 127, 128, 132, 135, 136, 138–140, 143–145, 147–150, 154, 169, 172–174, 188, 192 Reports, 57, 89, 90, 96–98, 102, 103, 106, 107, 109, 112, 120, 133, 140, 154, 155, 166, 186 Representatives, 32, 45, 47, 50–52, 55, 58, 60, 62, 64, 71, 73–76, 79, 82, 83, 85, 94, 134, 136, 141, 160, 177, 180 Resilience, 2, 3, 6, 10, 27, 29, 71, 114 Resource allocation process, 5, 21, 46, 47, 50, 52, 53, 59, 63, 67, 82, 87, 89, 93, 124, 132, 173 Responsiveness, 33, 35, 45, 127 Restrictions on information disclosure, 99, 104, 121, 191 Review mechanisms, 26, 28, 39, 41, 42, 131–137, 147, 148, 150, 151, 154, 159, 161, 163, 165–167, 172–174, 187–190, 192 Rio Declaration on Environment and Development, 46 Rule-oriented approach, 135

S Scoring, 117, 185 Secrecy, 89, 93, 124 Security, 93, 99, 104, 108, 124 Self-initiation modality, 161, 173, 189 Sonaha indigenous groups, 31

221

Special Climate Change Fund (SCCF), 2, 13, 14, 19, 52, 53, 96, 97 Stakeholder consultation, 26, 36, 54, 57, 61, 63, 65, 67, 71, 72, 77, 79, 91, 97, 101, 106, 115, 116, 138, 165, 182, 184 Stakeholder participation, 36, 38, 41, 43, 44, 46, 49, 59, 67, 73, 79, 82–84, 118, 122, 126, 135, 166, 182, 190 Standards, 5, 19, 21–23, 33, 37, 40–42, 57, 90, 122, 130, 132, 135, 136, 139, 142, 150, 161, 165, 167, 168, 172–174, 178, 189, 190 Standing, 138, 173 Substantive assessment, 134–136, 138, 142, 146, 147, 165, 167, 189 Sufficiency of information, 95, 96, 101, 105, 111, 113, 183, 191 Supervisory accountability, 130 Sustainable development, 1, 2, 11, 38, 46 Sustainable Development Goals (SDGs), 11, 35

T Technical capacity, 51, 91, 183 Technical reports, 102, 111, 113, 120, 124 Technical reviews, 90, 96 Transparency, 4–6, 22, 26, 37–42, 46, 50, 61, 85, 87–91, 93, 94, 96, 101, 105, 110–113, 122–126, 135, 136, 139, 146, 159, 167, 174, 175, 178, 182, 183, 186, 187, 190–192 Transparency standard, 89, 125, 135 Travel costs, 58, 83, 183

222

INDEX

U UN Climate Regime, 11, 12, 16 UN Conference on Sustainable Development, 11 Unintended consequences, 7, 32, 42 United Nations (UN), 10–12, 18, 46, 75, 103, 141, 161, 174 United Nations Development Programme (UNDP), 9, 13, 20, 21, 24, 27, 28, 31, 71 United Nations Environmental Programme (UNEP), 2, 10, 13, 20, 21, 57, 73 United Nations Framework Convention on Climate Change (UNFCCC), 2, 5, 8, 11–17, 34, 35, 46, 47, 60, 74, 180

V Vulnerable communities, 2, 3, 23, 26, 37, 59, 69, 102, 191 W Water insecurity, 7 Water security, 5 Workshops, 92, 99, 103, 108, 111, 119 World Bank, 9, 10, 13–15, 19, 30, 34–37, 39, 72, 79, 81, 89, 128, 154–159, 164, 168–171, 182, 190 World Resources Institute (WRI), 18, 34, 35, 39 World Trade Organization (WTO), 35, 36, 38, 89, 131