Nithin Ramakrishnan, Third World Network
Around 70 plus developing countries and civil society organisations are sceptical about the Memorandum of Understanding (MoU) establishing the institutional arrangements for the Cali Fund established as part of the CBD’s Multilateral Mechanism for Fair and Equitable Sharing of Benefits arising from the use of DSI. This is because the MoU turns the Cali Fund into a conventional donor-controlled trust fund.
The MoU was concluded between the UN Multi-Partner Trust Fund Office (MPTFO), UNEP and UNDP to establish the operational arrangements for administering the Cali Fund. However, these foundational documents were
finalized without a first reading by the Steering Committee or any Party-led intersessional process, depriving Parties of an opportunity to examine whether the MOU and its annexed documents faithfully reflect the institutional design agreed in Decision 16/2. Such an approach sits uneasily with the principles of transparency, inclu-siveness and Party-driven governance reflected in Paragraphs 24 and 28 of the Annex of Decision 16/2.
The first concern relates to the nature of monetary benefit-sharing contributions. Decision 16/2 which operationalizes the Cali Fund considers monetary benefit-sharing contributions to the Fund as a plausible method to discharge other monetary benefit-sharing obligations arising from the use of DSI. The MoU, however, treats their payments as “donations”, thereby recasting the funds that provider States and Indigenous Peoples and local communities are entitled to, as mere charity. This could lead to significant legal consequences, including giving contributors the legal status of donors andcontractual rights, which is not envisaged in Decision 16/2.
These donor rights include the right to initiate indepen-dent evaluations of recipient organizations, suspend or terminate funding, seek the return of funds under specified circumstances, receive extensive reporting and consultation rights. Most significantly, Sections 6.5 and 8.6-7 of the Non-UN Organizations (NUNO) Framework Agreement, which is Annex D of the MoU, grant donors a direct right of recourse against recipient entities, including Indigenous Peoples and local communities. These provisions cannot be amended without the written consent of the donors.
This direct right of recourse of donors includes unrestricted access to any premise, personal, records, goods and documents of the recipient entities, which could include access to sacred lands and resources of the Indigenous Peoples and local communities.
Further, according to this Agreement, disputes between donors and recipient organizations will be governed by the domestic law of the donor pursuing the claim, with arbitration taking place in the donor’s domicile country. Recipient organizations may therefore become subject to foreign legal systems rather than governance arrangements established collectively by the COP.
While the MoU establishes extensive enforceable rights for donors, it contains no corresponding recognition of the sovereign rights of provider States or the rights of Indigenous Peoples and local communities, whose genetic resources and associated knowledge form the basis of the multilateral mechanism. It does not even provide for verification of the certificates issued by the Cali Fund for the contributions received.
It must be noted that the Agreement that Governments need to sign to receive funds, which is Annex C to the MOU, is not yet in the public domain. All these concerns, among others, have led to the call for the review of MOU and annexed documents by the COP.