Decision 46/37

Phase-out agreements: flexibility conditions (Decision 45/15)

Following a discussion, the Executive Committee decided:

1. That consistent with the flexibility provisions in the relevant agreement, any annual implementation plan prepared and submitted to the Executive Committee for approval could include changes to the scope and nature of the activities foreshadowed in the project document, on which approval in principle of the overall phase-out plan was based;
2. To reiterate its expectation that each annual implementation plan would be implemented as approved and would achieve, as a minimum, the phase-out proposed in the project document and the agreement, where relevant;
3. That minor changes to a project or an annual implementation plan could be incorporated, as implementation proceeded during the year, and reported on in the annual report on implementation of the annual implementation plan;
4. That examples of minor changes included:
   1. Adjustments to the number of equipment items to be purchased (for example, plus or minus 20 per cent of the number of recovery and recycling machines in an annual investment plan);
   2. Changes to the size or content of training programmes included in the current approved annual investment plan;
   3. Financial adjustments between the levels of funding of activities in the current approved annual implementation plan (excluding transfers between agencies), provided that they did not affect the overall funding level of the approved annual investment plan;
5. That proposed major changes to the scope and nature of activities foreshadowed in the project document should be referred to the Executive Committee for approval as part of the annual implementation plan for the subsequent year;
6. That major changes could be defined as those presenting:
   1. Issues potentially concerning the rules and policies of the Multilateral Fund;
   2. Reductions from the planned amount of phase-out to be achieved in the year;
   3. Changes in the annual levels of funding allocated to individual bilateral or implementing agencies;
   4. Provision of funding for programmes or activities not included in the current endorsed annual investment plan, or removal of an activity in the annual investment plan, with a cost greater than 30 per cent of the total cost of the tranche;
7. That it is the responsibility of the bilateral or implementing agency in the first instance to identify whether a proposed change to implementation of the current approved annual implementation plan would be considered major or minor according to the criteria above;
8. That, if the proposal could constitute a major change, the agency should defer the proposed change pending submission and endorsement by the Executive Committee as part of the subsequent annual investment plan;
9. That where there is doubt as to the nature of a proposed change, the agency should seek the views of the Secretariat as to whether the issues raised by the proposal were such that prior consideration by the Executive Committee should be required. If the Secretariat indicated that the proposed change did not raise issues that required reference to the Committee, consistent with the above criteria, the proposal would be deemed to be a minor change and could be incorporated in the annual implementation plan currently under implementation and reported to the Executive Committee in the annual report on implementation of the annual investment plan; and
10. That the guidelines for preparation, implementation and management of performance‑based phase-out plans adopted by the Executive Committee at its 38^th Meeting (decision 38/65) were amended by replacing paragraph 7 of the draft agreement (Annex II to the guidelines) by the following revised wording and that this would be applicable to future agreements:

“While the funding was determined on the basis of estimates of the needs of the country to carry out its obligations under this agreement, the Executive Committee agrees that the country may have the flexibility to reallocate the approved funds, or part of the funds, according to the evolving circumstances to achieve the goals prescribed under this agreement. Reallocations categorized as major changes must be documented in advance in the next annual implementation programme and endorsed by the Executive Committee as described in sub-paragraph… Reallocations not categorized as major changes may be incorporated in the approved annual implementation programme, under implementation at the time, and reported to the Executive Committee in the report on implementation of the annual programme.”