Article 28. Financial mechanism and resources

659. Article 28 provides for financial assistance to be provided to developing country Parties, and to some extent to Parties with economies in transition. The underlying rationale of this provision is that Parties with limited capacity need assistance if they are to comply with their obligations under the Protocol. That they should be able to comply is not only in the interest of the Parties concerned, but also of the community of Parties to the Protocol as a whole. In order to make the Protocol effective, all Parties need to be in a position to implement it at the national level.

660. Article 28 addresses two basic issues:

661. Under Article 28, the financial mechanism established under the CBD will also be the financial mechanism for the Protocol – i.e. financial assistance in relation to the Protocol will be available through the Global Environment Facility (GEF).

662. Under the provisions of Article 28, for both sources of financial assistance, the developed country Parties to the Protocol assume the role of donors, and the developing country Parties are designated as recipients. Parties with economies in transition have a somewhat ambiguous role: they can be recipients of bilateral assistance, but they are not mentioned as beneficiaries of the financial mechanism, although they do in practice receive assistance from the GEF. They can also assume the role of donors on a voluntary basis, both through the financial mechanism and on a bilateral basis.

663. The category of “developed countries” has been defined for the purposes of financial resources and mechanism in the context of the CBD – and, by implication, its protocols –through a list adopted by the CBD COP at its first meeting.116 There is no corresponding list of “developing countries”.

664. Article 28 of the Protocol is closely linked to the corresponding provisions of the CBD, namely Articles 20 (Financial Resources) and 21 (Financial Mechanism). Article 28 must therefore be read in conjunction with these CBD provisions. Paragraphs 1 and 4 of Article 28 refer to Article 20 of the CBD, and paragraphs 2, 3 and 5 refer to Article 21. Paragraph 6 restates and refines the concept of Article 20 paragraph 3 of the CBD.117

665. Article 28(1) provides that the Parties shall “take into account” the provisions of Article 20 of the CBD in “considering” financial resources for the implementation of the Protocol. This means that Article 20 of the CBD does not directly apply to the provision of financial resources under the Protocol, but is merely to be “taken into account” in this context, for example if a specific issue is not addressed by Article 28. This wording is the result of a compromise between those countries that wanted to include a strong obligation to provide financial resources, and those that were reluctant to include a provision of this type. The wording softens the obligation of potential donor countries in two respects. First, they are not obliged to provide financial resources, but merely to consider the issue of financial resources, and second, the provisions of Article 20 of the CBD are not declared to be directly applicable to the Protocol, but to be taken into account.

666. Article 28(1) refers to all aspects of Article 20 of the CBD. In seven paragraphs, Article 20 CBD sets out a wide range of obligations and guidelines, covering national financing activities, the provision of new and additional resources by developed country Parties to developing countries; the provision of funds through bilateral or multilateral channels; the interlinkage between developing countries' implementation of the CBD and the funding received for this purpose; consideration of the special dependence of developing countries on biological diversity; and the special consideration to be given to the situation of developing countries. The open wording of Article 28(1) also takes into account the fact that all provisions of Article 20 of the CBD are not equally relevant to the issue of biosafety, but that they should be considered to the extent that they do have a bearing on this issue.

667. As a result of the general reference to Article 20 of the CBD, there is certain duplication with the concepts set out in Article 28 of the Protocol. Thus Article 28(6) corresponds to Article 20(3) of the CBD, and Article 28(4) corresponds to Article 20(5) CBD, although the provisions of the Protocol are more detailed.

668. Article 28(2) refers to Article 21 of the CBD, which regulates the establishment and function of the financial mechanism under the CBD. It designates the financial mechanism of the CBD as the financial mechanism of the Protocol, through the institutional structure entrusted with its operation. The institutional structure referred to is the Global Environment Facility (GEF), which was designated as the financial mechanism of the CBD on an interim basis, in accordance with Article 39 of the CBD and relevant decisions of the Conference of the Parties.118

Box 46. The Global Environment Facility (GEF)

The Global Environment Facility (GEF) was established in 1991. After the pilot phase from 1991 to 1994, it was restructured in order to respond to criticism of its organizational and structural shortcomings, with the acceptance by 73 States of the Instrument for the Establishment of the Restructured Global Environment Facility (“the Instrument”). The Instrument lays down the fundamental principles of the operation of the GEF.

The objective of the restructured GEF is to serve as a mechanism for international cooperation for the purpose of providing new and additional grants and concessional funding to meet the agreed global environmental needs in the four following focal areas: (1) global warming, (2) pollution of international waters, (3) loss of biological diversity, and (4) depletion of the stratospheric ozone layer. The GEF supports activities in the above areas through projects on a grant or concessional basis. The GEF has adopted a specific programme on biosafety and set aside around US$ 50 million for its implementation.

The GEF is jointly operated by the World Bank, the United Nations Development Programme (UNDP) and the United Nations Environment Programme (UNEP). Its principal mechanism is the GEF Trust Fund. Any member State of the UN or of any of its specialized agencies may become a participant in the GEF by depositing an instrument of participation in accordance with the Instrument. As of October 2002, there were 173 participants. The governing bodies of the GEF are the Assembly and the Council. The Assembly, in which all participating States are represented, reviews the general policies of the GEF, and evaluates its operation on the basis of reports submitted by the Council. The Council is the main governing body, responsible for developing, adopting and evaluating the operational policies and programmes for GEF-financed activities. It is composed of 32 members (16 from developing countries, 14 from developed countries, and two from Central and Eastern European countries).

In accordance with the Instrument, beneficiaries of the GEF are the countries eligible to borrow from the World Bank, or eligible for technical assistance from UNDP, i.e. countries with a per capita income of less than 4000 US$ per year. The following principal criteria for project selection (grants) are applied: (1) the project must benefit the global environment, and (2) it must be innovative. Any country (developed, developing, and transitional) can pledge contributions to the GEF in accordance with the criteria laid down in the Instrument. Contributions by developed countries are roughly in line with a formula based on their shares in the World Bank's International Development Association. For the 2nd replenishment, 28 countries announced pledges to the GEF Trust Fund, including 10 developing countries.

In accordance with Article I(6) of the Instrument and the relevant treaty provisions, the GEF operates the multilateral financial mechanisms of several environmental conventions. It operates the financial mechanism of the CBD on an interim basis. In accordance with Article 28 of the Protocol, it will also operate the financial mechanism of the Protocol.

The negotiations for the third replenishment of the GEF were concluded in August 2002. Thirty-two donor countries agreed on a US$2.92 billion replenishment to fund the GEF's operations in the four year period 2002–2006.

669. Articles 28(3)–(6) clarify or restate some of the relevant principles contained in Articles 20 and 21 of the CBD. As paragraphs 1 and 2 of Article 28 also contain references to Article 20 and 21 respectively, this means a certain duplication. However, paragraphs 3 to 6 do not restate the principles in exactly the same way, but adjust them to the Protocol. Not all provisions of the CBD are taken up in the Protocol. For example, the Protocol does not contain a provision equivalent to Article 20(4) of the CBD, which links implementation of the CBD by developing countries to the financial assistance they receive for this purpose.

670. Article 28(3) relates to the financial mechanism of the Protocol. It refers to Article 21 of the CBD under which the CBD COP is assigned the authority of determining the policy of the financial mechanism. Under the Protocol, the COP/MOP(see commentary on Article 29) will provide guidance with respect to the financial mechanism as it relates to the Protocol, for consideration by the CBD COP. Hence the ultimate authority to determine the guidance to the financial mechanism, with respect to the Protocol as well as with respect to the CBD, rests with the CBD COP. This provision is reinforced by the Instrument for the Establishment of the Restructured GEF (paragraphs 6 and 26), which states that the Conferences of the Parties of the CBD for which the GEF acts as financial mechanism shall provide relevant guidance to the GEF.119 This is a key area of the Protocol in which the CBD COP retains competence.

671. Article 28(3) also establishes a link between the financial mechanism and the provisions on capacity-building set out in Article 22 of the Protocol. It specifies that in setting out the guidelines for the role of the financial mechanism, as it relates to the Protocol, the CBD COP, on the recommendation of the COP/ MOP, shall take account of the needs regarding capacity-building as set out in Article 22. In carrying out its role, the GEF shall thus aim to meet the specific capacity-building needs that are enumerated in Article 22(2). As specified in Article 22, the different situations in potential recipient countries must be taken into account. This is important given the great diversity of situations and needs in the different categories of countries that are potential recipients of assistance from the financial mechanism.

672. Article 28(4) recognizes that certain groups of Parties may have specific needs in capacity-building that need to be reflected in the provision of financial resources for implementation of the Protocol.

673. This provision refers to the provision of guidance by the CBD COP to the financial mechanism. It is based on Article 21(2) and (3) of the CBD.

674. Article 21(2) CBD stipulates that the CBD COP, at its first meeting, “shall determine the policy, strategy and programme priorities, as well as detailed criteria and guidelines for eligibility for access to and utilization of the financial resources” of the mechanism. In accordance with Article 21(3) CBD, these criteria and guidelines are reviewed periodically.

675. At each of the six meetings of the CBD COP held since the entry into force of the CBD, a decision has been adopted addressing this issue.120 Thus there already exists a body of guidance to the financial mechanism from the CBD before the adoption of the Protocol. Some of this guidance specifically relates to capacity-building for biosafety.

676. The application of the guidance “mutatis mutandis” means that the differences between the CBD and the Protocol that are relevant to the issue must be taken into consideration when applying the guidance to the financial mechanism. In concrete terms, the guidance may be modified in applying it to the Protocol, to the extent necessary to adapt it to the specificities of the Protocol.

677. Future guidance to be developed under Article 28(3) of the Protocol for consideration by the CBD COP will also apply. Article 28(5) ensures a strong link between the policy of the CBD COP with respect to the GEF in relation to the CBD and in relation to the new requirements of the Protocol.

Box 47. Financial assistance for biosafety: example

The UNEP-GEF Project on the development of National Biosafety Frameworks

The UNEP-GEF global project on the development of National Biosafety Frameworks is a three year project which started in June 2001. The UNEP/GEF Biosafety Project is part of the GEF “Initial Strategy for assisting countries to prepare for the entry into force of the Protocol on Biosafety”(GEF/C.16/4). The global project is designed to help countries comply with the Protocol, and takes into account the lessons learned from the UNEP-GEF Pilot Project on Development of National Biosafety Frameworks.

The UNEP-GEF Biosafety Capacity Building Project is intended to:

The total cost of the UNEP-GEF Biosafety Project is $38.4 million. This is funded by a contribution of $26.1 million from the Global Environment Facility (GEF), with co-financing of $12.3 million from UNEP and participating countries. These countries will contribute one third of the costs of their national projects, in cash and/or in kind.

To join the project, countries need to meet the GEF eligibility requirements:

As of 6 October 2002 there were 106 countries participating in the project distributed in the following regions: 31 from Africa, 33 from Asia-Pacific, 16 from Central and Eastern Europe and 26 from Latin America and the Caribbean.

Source: UNEP-GEF project website: www.unep.ch/biosafety

678. Article 28(6) re-states the substance of Article 20(3) CBD, according to which financial and technological assistance may be available to developing country Parties and Parties with economies in transition from developed country Parties on a bilateral basis, for example through overseas development assistance. Such assistance may also be available through regional or multilateral channels– such as regional development banks or the World Bank. Some examples of existing bilateral initiatives are given in Box 48.

Box 48. Bilateral assistance for capacity-building in biosafety: examples

Anumber of countries have initiated bilateral schemes to promote capacity-building in biosafety. For example: The project to implement the CBD (BIODIV) managed by the GTZ (German Agency for Technical Co-operation – Deutsche Gesellschaft für Technische Zusammenarbeit GmbH) on behalf of the German Ministry for Development and Economic Co-operation (BMZ) is also assisting developing countries with the implementation of the Protocol.

Within this project the current priorities for action are the following:

Source: GTZ BIODIV website at www.gtz.de/biodiv

Following a request from pre-accession countries in Central and Eastern Europe (CEE), the Dutch Government initiated in 1999 the 3-year project “Implementation of national biosafety frameworks in pre-accession countries of Central and Eastern Europe”. The project started in November 1999 and ended in November 2002. The project was funded by the “Matra” programme of the Dutch Ministry of Foreign Affairs and implemented by the Dutch Ministry for the Environment. The aim of this project was to support pre-accession countries in CEE in establishing, workable and transparent national biosafety frameworks in conformity with the relevant EC directives and other international obligations such as the Protocol.

The main mechanism of the project was the transfer of information and experience in tailor-made training workshops, created in consultation with the participating countries.

In addition to these training activities on the national level, the project also included regional activities, aimed at ensuring sustainability of the results of the project through establishing mechanisms for regional collaboration. On top of these national and regional activities, the project included “outreach activities”, aimed at broadening the impacts of the project.

Source: http://biosafety-cee.org

A database of biosafety capacity-building initiatives is incorporated in the Biosafety Clearing-House at http://bch.biosafety.org/Pilot


116 Decision I/2, UNEP/CBD/COP/1/17, Annex II.

117 See Glowka et al., pp. 100–108 for an in-depth analysis of Articles 20 and 21 CBD.

118 Nairobi Diplomatic Conference (May 1992), Resolution 1 on Interim Financial Arrangements; CBD COP Decisions I/2, II/6, III/7, III/8, IV/11, IV/12, V/11 and V/12.

119 See UNEP/CBD/ICCP/1/INF/2.

120 CBD COP Decisions I/2, II/6, III/5, IV/13, V/13, VI/17.

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