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Annex IV : Appendices to Decision II/8 ("financial mechanism")

Annex IV

APPENDICES TO DECISION II/8 ("FINANCIAL MECHANISM")
ADOPTED BY THE SECOND MEETING OF THE PARTIES

Appendix I

INDICATIVE LIST OF CATEGORIES OF INCREMENTAL COSTS

1. The evaluation of requests for financing incremental costs of a given project shall take into account the following general principles:

(a) The most costeffective and efficient option should be chosen, taking into account the national industrial strategy of the recipient party. It should be considered carefully to what extent the infrastructure at present used for production of the controlled substances could be put to alternative uses, thus resulting in decreased capital abandonment, and how to avoid deindustrialization and loss of export revenues;

(b) Consideration of project proposals for funding should involve the careful scrutiny of cost items listed in an effort to ensure that there is no doublecounting;

(c) Savings or benefits that will be gained at both the strategic and project levels during the transition process should be taken into account on a casebycase basis, according to criteria decided by the Parties and as elaborated in the guidelines of the Executive Committee;

(d) The funding of incremental costs is intended as an incentive for early adoption of ozone protecting technologies. In this respect the Executive Committee shall agree which time scales for payment of incremental costs are appropriate in each sector.

    2. Incremental costs that once agreed are to be met by the financial mechanism include those listed below. If incremental costs other than those mentioned below are identified and quantified, a decision as to whether they are to be met by the financial mechanism shall be taken by the Executive Committee consistent with any criteria decided by the Parties and elaborated in the guidelines of the Executive Committee. The incremental recurring costs apply only for a transition period to be defined. The following list is indicative:

    (a) Supply of substitutes

    (b) Use in manufacturing as an intermediate good

    (c) End use

    • (i) Cost of conversion of existing production facilities:

      (ii) Costs arising from premature retirement or enforced idleness, taking into account any guidance of the Executive Committee on appropriate cutoff dates:

      (iii) Cost of establishing new production facilities for substitutes of capacity equivalent to capacity lost when plants are converted or scrapped, including:

      (iv) Net operational cost, including the cost of raw materials;

      (v) Cost of import of substitutes;

      •  

        • cost of patents and designs and incremental cost of royalties;

           

        • capital cost of conversion;

           

        • cost of retraining of personnel, as well as the cost of research to adapt technology to local circumstances;

         

        • of productive capacity previously used to produce substances controlled by existing and/or amended or adjusted Protocol provisions; and

           

        • where such capacity is not replaced by converted or new capacity to produce alternatives;

         

        • cost of patents and designs and incremental cost of royalties;

           

        • capital cost;

           

        • cost of training, as well as the cost of research to adapt technology to local circumstances;

      (i) Cost of conversion of existing equipment and product manufacturing facilities;

      (ii) Cost of patents and designs and incremental cost of royalties;

      (iii) Capital cost;

      (iv) Cost of retraining;

      (v) Cost of research and development;

      (vi) Operational cost, including the cost of raw materials except where otherwise provided for;

        (i) Cost of premature modification or replacement of user equipment;

        (ii) Cost of collection, management, recycling, and, if cost effective, destruction of ozonedepleting substances;

        (iii) Cost of providing technical assistance to reduce consumption and unintended emission of ozonedepleting substances.

         

        Appendix II

        TERMS OF REFERENCE OF THE EXECUTIVE COMMITTEE

         

        1. The Executive Committee of the Parties is established to develop and monitor the implementation of specific operational policies, guidelines and administrative arrangements including the disbursement of resources, for the purpose of achieving the objectives of the Multilateral Fund under the Financial Mechanism.

        2. The Executive Committee shall consist of seven Parties from the group of Parties operating under paragraph 1 of Article 5 of the Protocol and seven Parties from the group of Parties not so operating. Each group shall select its Executive Committee members. The members of the Executive Committee shall be formally endorsed by the Meeting of the Parties.

        3. The Chairman and ViceChairman shall be selected from the fourteen Executive Committee members. The office of Chairman is subject to rotation, on an annual basis, between the Parties operating under paragraph 1 of Article 5, and the Parties not so operating. The group of Parties entitled to the chairmanship shall select the Chairman from among their members of the Executive Committee. The ViceChairman shall be selected by the other group from within their number.

        4. Decisions by the Executive Committee shall be taken by consensus whenever possible. If all efforts at consensus have been exhausted and no agreement reached, decisions shall be taken by a twothirds majority of the Parties present and voting, representing a majority of the Parties operating under paragraph 1 of Article 5 and a majority of the Parties not so operating present and voting.

        5. The meetings of the Executive Committee shall be conducted in those official languages of the United Nations required by members of the Executive Committee. Nevertheless the Executive Committee may agree to conduct its business in one of the United Nations official languages.

        6. Costs of Executive Committee meetings, including travel and subsistence of Committee participants from Parties operating under paragraph 1 of Article 5, shall be disbursed from the Multilateral Fund as necessary.

        7. The Executive Committee shall ensure that the expertise required to perform its functions is available to it.

        8. The Executive Committee shall meet at least twice a year.

        9. The Executive Committee shall adopt other rules of procedure on a provisional basis and in accordance with paragraphs 1 to 8 of these terms of reference. Such provisional rules of procedure shall be submitted to the next annual meeting of the Parties for endorsement. This procedure shall also be followed when such rules of procedure are amended.

        10. The functions of the Executive Committee shall include:

        (a) To develop and monitor the implementation of specific operational policies, guidelines and administrative arrangements, including the disbursement of resources;

        (b) To develop the threeyear plan and budget for the Multilateral Fund, including allocation of Multilateral Fund resources among the agencies identified in paragraph 6 of decision II/8;

        (c) To supervise and guide the administration of the Multilateral Fund;

        (d) To develop the criteria for project eligibility and guidelines for the implementation of activities supported by the Multilateral Fund;

        (e) To review regularly the performance reports on the implementation of activities supported by the Multilateral Fund;

        (f) To monitor and evaluate expenditure incurred under the Multilateral Fund;

        (g) To consider and, where appropriate, approve country programmes for compliance with the Protocol and, in the context of those country programmes, assess and, where applicable, approve all project proposals or groups of project proposals where the agreed incremental costs exceed $500,000;

        (h) To review any disagreement by a Party operating under paragraph/1 of Article 5 with any decision taken with regard to a request for financing by that Party of a project or projects where the agreed incremental costs are less than $500,000;

        (i) To assess annually whether the contributions through bilateral cooperation, including particular regional cases, comply with the criteria set out by the Parties for consideration as part of the contributions to the Multilateral Fund;

        (j) To report annually to the meeting of the Parties on the activities exercised under the functions outlined above, and to make recommendations as appropriate;

        (k) To nominate, for appointment by the Executive Director of UNEP, the Chief Officer of the Fund Secretariat, who shall work under the Executive Committee and report to it; and

        (l) To perform such other functions as may be assigned to it by the Meeting of the Parties.

           

          Appendix III

          MULTILATERAL FUND FOR THE FINANCIAL MECHANISM: SCALE OF CONTRIBUTIONS BY THE PARTIES BASED ON THE UNITED NATIONS SCALE OF ASSESSMENT WITH NO COUNTRY PAYING MORE THAN 25 PER CENT FOR 1991, 1992, AND 1993

          _____________________________________________________________________________________________________

          Party UN scale Percentages Pledges for Pledges for Pledges for

          of based on the 1991 1992 1993

          contribution United Nations (US $) (US $) (US $)

          (%) scale with a 25

          per cent ceiling

          (%)

          _____________________________________________________________________________________________________

          Developing countries that are not operating under paragraph 1 of Article 5

          Brazil 1.45 0.00 0 0 0

          Burkina Faso 0.01 0.00 0 0 0

          Cameroon 0.01 0.00 0 0 0

          Chile 0.08 0.00 0 0 0

          Ecuador 0.03 0.00 0 0 0

          Egypt 0.07 0.00 0 0 0

          Fiji 0.01 0.00 0 0 0

          Ghana 0.01 0.00 0 0 0

          Guatemala 0.02 0.00 0 0 0

          Jordan 0.01 0.00 0 0 0

          Kenya 0.01 0.00 0 0 0

          Malaysia 0.11 0.00 0 0 0

          Maldives 0.01 0.00 0 0 0

          Mexico 0.94 0.00 0 0 0

          Nigeria 0.20 0.00 0 0 0

          Sri Lanka 0.01 0.00 0 0 0

          Syrian Arab Republic 0.04 0.00 0 0 0

          Thailand 0.10 0.00 0 0 0

          Trinidad and Tobago 0.05 0.00 0 0 0

          Tunisia 0.03 0.00 0 0 0

          Uganda 0.01 0.00 0 0 0

          Venezuela 0.57 0.00 0 0 0

          Zambia 0.01 0.00 0 0 0

          Bahrain 0.02 0.02 12 553 12 553 12 553

          Malta 0.01 0.01 6 276 6 276 6 276

          Panama 0.02 0.02 12 553 12 553 12 553

          Singapore 0.11 0.13 69 041 69 041 69 041

          United Arab Emirates 0.19 0.22 119 253 119 253 119 253

          Developed countries

          Australia 1.57 1.85 985 407 985 407 985 407

          Austria 0.74 0.87 464 459 464 459 464 459

          Byelorussian SSR 0.33 0.39 207 124 207 124 207 124

          Canada 3.09 3.64 1 939 432 1 939 432 1 939 432

          Finland 0.51 0.60 320 100 320 100 320 100

          German Democratic Rep. 1.28 1.51 803 389 803 389 803 389

          Hungary 0.21 0.25 131 806 131 806 131 806

          Iceland 0.03 0.04 18 829 18 829 18 829

          Japan 11.38 13.39 7 142 633 7 142 633 7 142 633

          Liechtenstein 0.01 0.01 6 276 6 276 6 276

          New Zealand 0.24 0.28 150 635 150 635 150 635

          Norway 0.55 0.65 345 206 345 206 345 206

          South Africa 0.45 0.53 282 442 282 442 282 442

          Sweden 1.21 1.42 759 454 759 454 759 454

          Switzerland 1.08 1.27 677 860 677 860 677 860

          Ukrainian SSR 1.25 1.47 784 560 784 560 784 560

          USSR 9.99 11.76 6 270 202 6 270 202 6 270 202

          United States 25.00 25.00 13 333 333 13 333 333 13 333 333

          EEC

          EEC

          (total for member States)29.46 34.67

          Belgium 1.17 1.38 734 348 734 348 734 348

          Denmark 0.69 0.81 433 077 433 077 433 077

          France 6.25 7.36 3 922 799 3 922 799 3 922 799

          Germany, Federal Rep. of 8.08 9.51 5 071 395 5 071 395 5 071 395

          Greece 0.40 0.47 251 059 251 059 251 059

          Ireland 0.18 0.21 112 977 112 977 112 977

          Italy 3.99 4.70 2 540 315 2 540 315 2 540 315

          Luxembourg 0.06 0.07 37 659 37 659 37 659

          Netherlands 1.65 1.94 1 035 619 1 035 619 1 035 619

          Portugal 0.18 0.21 112 977 112 977 112 977

          Spain 1.95 2.29 1 223 913 1 223 913 1 223 913

          United Kingdom 4.86 5.72 3 050 369 3 050 369 3 050 369

          ___________________________________________________________________

          TOTAL 92.52 100.00 53 333 333 53 333 333 53 333 333

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