February 25, 2005

Statement of the Chief Officer of the Multilateral Fund at the 23rd Governing Council of UNEP

Cooperation and coordination within the United Nations systems on environmental matters

Thank you Mr Chairman.

 Distinguished delegates, ladies and gentlemen,

            It is a great pleasure and privilege for me to address the Governing Council of UNEP on behalf of the Multilateral Fund for the Implementation of the Montreal Protocol, and I would like to thank the Executive Director of UNEP and the Governing Council for giving me the opportunity to do so.  Most of the countries represented here, are Parties to the Vienna Convention and its Montreal Protocol, and as such are either contributors to or beneficiaries of the Multilateral Fund. 

The Multilateral Fund, which exists in no small measure thanks to the solid efforts of UNEP in leading and persisting in the arduous negotiations that led to the creation of the Montreal Protocol and its funding mechanism, is unique. It addresses a single issue – ozone depletion; is global in nature; has minimum administration and has an individual approach to the principles of environmental governance. 

The Multilateral Fund, as an international cooperation mechanism, has achieved the widest possible participation of developing countries in the Montreal Protocol process.  The Fund has succeeded in removing any obstacles to the participation of developing countries in the process by:

• Involving them fully in the governance of the Fund providing equal representation on the Fund’s Executive Committee.
• Financing the preparation of country programmes as a process to assess national compliance, formulate an action plan for phaseout and establish needs for Fund assistance.  This process has lead to the establishment and sustaining of national ozone offices in 139 countries.

We have created the first universal environmental infrastructure – an infrastructure that if not used will be doomed.

We need to strengthen and sustain this infrastructure by using it effectively, particularly as developing country Parties are now in the middle of the compliance period.  Countries need to double their efforts by taking charge of national programmes to achieve pre-agreed targets.  The Multilateral Fund will assist in the realisation of those targets but can never replace a national consensus to commit, achieve and maintain compliance.

As many of you know, the Multilateral Fund was established in 1991, and today, almost 14 years later, I’m pleased to report to the Council that the Fund has significant achievements.  It is the second largest global environment fund in terms of income and commitment, second only to the Global Environment Facility.  It is in fact the single largest Trust Fund within UNEP, and as of December 2004 had a total income of nearly US$1.9 billion of which about US$1.8 billion had already been committed. 

            Through the policies devised by the Fund’s Executive Committee, every single project funded and related volume of substances phased out can be accounted for in a transparent manner.  There is therefore full accountability in this process starting from the management of the Fund and, through the implementing agencies, to the countries themselves.

            In terms of forming a UN system-wide response to a global environmental problem, the Multilateral Fund has also achieved significant success by rallying global action both within and outside the United Nations system to assist developing countries in dealing with the ozone problem.  The Fund engages the service of four implementing agencies to deliver activities in developing countries, these are:  UNDP, UNEP (DTIE), UNIDO, and the World Bank. 

In addition to the four implementing agencies, the Multilateral Fund also enabled contributing Parties to fund and carry out projects in developing countries on a bilateral basis, using up to 20% of their annual contributions to the Fund.  At least 8 countries have been involved in such bilateral activities.

Despite the multitude of partners, a coordinated response to the needs of each of the developing countries has been achieved by the Multilateral Fund Secretariat through the annual business planning process.  Over the past 14 years, a global infrastructure has been built to deliver nearly 5,000 projects.  The four multilateral agencies and eight bilateral implementing agencies have developed programmes in all eligible developing countries including a system of financial intermediaries, regional networks, national ozone units and national project management units. 

            In over a decade of experience implementing our mandate to assist developing countries to comply with the Montreal Protocol control schedules, we at the Multilateral Fund have adopted an approach to environmental governance which creates and nurtures a national capacity through well prepared implementation of programmes resulting in a strong local knowledge base and capability to improve local environmental management.

            The Fund has provided capacity building through funding Institutional strengthening projects to establish National Ozone Units within each eligible developing country. In exchange for this funding assistance, these National Ozone Units are charged to collect and report data, coordinate and develop a national strategy for phasing out ODS and monitor its implementation.  The Multilateral Fund has been replenishing these projects every two years on the basis of performance reports and is committed to continue such funding at a minimum until 2010 even if countries complete their national phase-out before that time in order to ensure sustainability. These projects have created ownership of the national ozone programme in each country..  In this manner, a total of nearly US$50 million has so far been spent on capacity building.

Additional capacity building is now being provided to strengthen that already invested in  each country and to foster a country-driven approach.  New multi-year performance-based agreements are being established with countries to assist them to comply with current control measures of the Montreal Protocol.  National governments now need to shoulder the responsibilities for these plans, and to ease the burden 10 percent of the total funding provided is earmarked either for programme management units, or to enhance capacity building.

From 1997, the Multilateral Fund started funding a regional network system as a peer support mechanism for the national ozone units.  There are currently eight regional networks, which are funded annually.  These regional networks provide support to countries from the region, share experiences and lessons learned, initiate and implement regional projects and formulate regional responses and feedback to the management of the Multilateral Fund. 

Mr.Chairman, I am pleased to inform the Council that the global ozone network comprising a national ozone office in 139 countries and 8 supporting regional networks have increasingly become an asset of the global environment community.  An asset that needs to have its future sustainability reinforced.

            By investing resources in developing countries to provide not only capacity building, but also investment projects to convert enterprises away from using substances harmful to the Ozone Layer, the Fund has already addressed the phase out of over 70% of consumption of ozone depleting substances and 37% of production..  But the remaining 30% of consumption has to be covered in a much shorter timeframe resulting in greater challenges and thereby higher funding requirements.

Therefore, although the results so far are extremely good, the next five to six years will be crucial to the Montreal Protocol. The control schedule requires all developing countries to achieve complete phase-out of the production and consumption of CFCs and halons by 1 January 2010.  There is no doubt of the success of the Multilateral Fund in the past decade.  However, it still faces enormous challenges. 

Between 2000 and 2004 there were still some developing countries that were determined to be in non-compliance with the Protocol for various reasons.  This is not an acceptable situation.  Our goal is to enable all countries to reach the finishing line successfully, including those countries that are late comers to the Treaty.  We believe that with the capacity established in each developing country, the final goals of the Montreal Protocol are well-positioned for success.  It would be remiss of me if I did not also note at this point that the success achieved so far is in no small measure due to the existence of a lean and efficient Secretariat, staffed by highly competent and dedicated personnel, that has worked tirelessly over the last decade for the goals of the Montreal Protocol and its Multilateral Fund.  It is this body that has reviewed all 5,000 projects submitted, and developed an expertise and process for monitoring their progress up to completion.

            Compliance is not an isolated event but a process requiring the activities and infrastructure that lead to compliance to be sustainable.  Vigilance by governments is still needed, as well as cooperation between international and bilateral agencies in order to secure sustainability and capitalise on the huge investments already made.  The Fund Secretariat will continue to work to enable countries to stay the course till the success of the Montreal Protocol reaches the point of no return.  In the meantime we are ready to share our experiences and lessons learned with other MEAs under implementation.

Mr.Chairman, distinguished delegates, thank you for your attention..