Australian Multilateral Assessment March 2012

Global Environment Facility

(GEF)

OVERVIEW OF ORGANISATION RATINGS

Delivering Results
Very Strong

Transparency and Strong Alignment with

Accountability Australia’s Interests
Satisfactory
Weak

Partnership Behaviour Contribution to

Multilateral System

Cost and Value Strategic Management

Consciousness and Performance

ORGANISATION OVERVIEW

The Global Environment Facility (GEF) operates as the financial mechanism for the
major international environment conventions: United Nations (UN) Framework
Convention on Climate Change; Convention on Biological Diversity, Convention to
Combat Desertification; and Stockholm Convention on Persistent Organic Pollutants.
It also supports other multilateral initiatives including the Montreal Protocol on
Substances that Deplete the Ozone Layer. GEF funds practical programs and shapes
policy reform in developing countries and economies-in-transition for climate change,
biodiversity, ozone depletion, persistent organic pollutants, degradation of land,
international water systems and promoting sustainable livelihoods.

Since GEF’s establishment in 1991, it has allocated approximately US$10 billion to

more than 2800 projects aimed at improving the global environment. Resources are
replenished every four years by member states. Australia has allocated $335 million to
the GEF since 1991, including $105 million to the fifth replenishment (2010–14).
In 2010–11, AusAID provided $22.5 million to GEF, all of which was provided as voluntary
core contributions.

Australia shares a seat on the governing GEF Council with the Republic of Korea and
New Zealand.

RESULTS AND RELEVANCE

1. Delivering results on poverty and sustainable development
STRONG
in line with mandate

GEF supports sustainable development by delivering tangible results in improving the

global environment in line with the conventions it serves. For example, GEF has
supported climate change adaptation and mitigation activities in more than 154 countries.
Over time, GEF investments are expected to directly reduce 1.7 billion tons of greenhouse
gas emissions. With biodiversity, GEF has supported the creation or management of more
than 2302 protected areas covering more than 634 million hectares as well as protecting
and planning for more than 265 million hectares of productive lands.

GEF, in line with its mandate, focuses its reporting on the environmental impact of its
activities. Although this reporting is clear and accessible, it is difficult to make an
accurate overall assessment on the extent to which GEF activities are reducing poverty.
In 2011, 88 per cent of GEF projects were reported to be performing at a moderate to solid
level or above.

GEF is implementing a revised results-based management framework, which should

enable it to report more comprehensively on results and impact. The proposed framework
appears to be robust.

Within its System for Transparent Allocation of Resources, GEF use a gross domestic
product per capita indicator to relatively increase the amount of funding allocated to
poorer countries. However, GEF does not specifically target poor communities within
countries.

a) Demonstrates development or humanitarian results

STRONG
consistent with mandate

GEF supports sustainable development by delivering tangible results in improving the

global environment in line with the conventions it serves. GEF has supported climate
change adaptation and mitigation activities in more than 154 countries.

GEF can demonstrate a range of outcomes from its activities:

> Greenhouse gas emissions: reducing greenhouse gas emissions by an expected

1.7 billion tons over time.
> Biological Diversity: creating or managing over 2302 protected areas covering more
than 634 million hectares and protection and planning for more than 265 million
hectares of productive lands.

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> Land Degradation: Improving management of over 100 hectares of productive land in
five countries in Central Asia, five countries in Middle East and North Africa, and 28
countries in Sub-Saharan Africa.
> Persistent Organic Pollutants: GEF projects are expected to phase out over 3000 tons of
DDT, 15 000 tons of obsolete pesticides and 35 000 tons of PCB-related waste and
equipment.

The performance of GEF projects is evaluated by the GEF Evaluation Office and measured
on their relevance, effectiveness and efficiency. As at November 2011, 88 per cent of GEF
projects were performing at a moderately satisfactory level (that is, the project has only
moderate shortcomings) or higher.

b) Plays critical role in improving aid effectiveness through

STRONG
results monitoring

A results-based management framework was introduced in 2007 and provides a strong

foundation for measuring results of the GEF. It includes monitoring and evaluation at
three levels: institutional, programmatic (or focal area) and project-level. This framework
is being enhanced in the current replenishment round (GEF-5) and now includes
corporate objectives, targets and outcomes against which focal area goals must align.

The revised results framework, while still being fine-tuned, appears to be robust. The
Secretariat has developed a work program for GEF-5 reforms and regularly reports to the
Council on progress. More time is needed to see the effects of these modifications.

GEF has an independent monitoring and evaluations office, which provides

independently verified evidence on progress across GEF’s entire portfolio. It undertakes
country portfolio evaluations, thematic evaluations, overall performance studies and
delivers an annual impact report, which determines long-term effects of GEF support and
how these could be strengthened.

GEF integrates lessons learned into its organisational structure and policies. At the end of
each replenishment an overall performance study is completed which reviews GEF as an
organisation and provides recommendations. These recommendations are often
implemented in the following replenishment.

For example, GEF adopted the lessons learned from the Resource Allocation Framework
in GEF-4 and redesigned its allocation system, the System for Transparent Allocation of
Resources. The result is more flexible and directs funds in line with countries’ capacity,
policies and practices relevant to the successful implementation of GEF projects.

c) Where relevant, targets the poorest people and in areas

SATISFACTORY
where progress against the MDGs is lagging

GEF funding is allocated through its new ‘System for Transparent Allocation of Resources’
(STAR) methodology based on country performance, country potential to achieve global
environmental benefits and a social and economic index based on the Gross Domestic
Product (GDP-based index, or GDPI). The GDPI is designed to increase allocations to
poorer countries with low GDP per capita. The STAR also uses allocation floors to address

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the vulnerability of small island developing states and small countries, which are highly
sensitive to natural disasters, but may have comparatively high per capita GDP due to
their small populations.

GEF, however, does not specifically target poor communities within these countries.

2. Alignment with Australia’s aid priorities and national

STRONG
interests

GEF’s activities align with the Australian Government’s climate change and
environmental objectives. Australia is a member of the key multilateral environmental
agreements for which GEF serves as the financial mechanism.

GEF’s work strongly aligns with the Australian aid program’s strategic goal of sustainable
economic development, by reducing the negative impacts of climate change and other
environmental factors.

GEF has only recently adopted a gender mainstreaming policy (May 2011) setting out
comprehensive requirements for GEF partners. GEF has also adopted a new environment
and social safeguards policy addressing a number of crosscutting issues such as
Indigenous and cultural rights.

The crosscutting issue of climate change is addressed as the core of GEF’s mandate.

GEF has no policies specifically addressing issues of disability.

GEF does not have a policy or special procedure for working in fragile states. However, it
provides funding to fragile states focusing on Small Island Developing States (SIDS) and
Least Developing Countries (LDCs). For example, GEF’s Pacific Alliance for Sustainability
provides US$98.6 million to Pacific Island Countries, leveraging a further
US$108.4 million in co-financing. The proportion of total GEF Trust Fund resources
provided to SIDS and LDCs has increased from 11.9 per cent (GEF-3) to 18.4 per cent
(GEF-4).

a) Allocates resources and delivers results in support of, and

STRONG
responsive to, Australia’s development objectives

Australia is a member of the key multilateral environmental agreements for which the
GEF serves as the financial mechanism.

GEF has demonstrated that it is responsive to Australian priorities. For example, in 2009,
Australia, together with like-minded countries, sought improved funding arrangements
for recipient countries in the Pacific which contributed to the GEF Council approving
US$86 million for Pacific Alliance for Sustainability projects. In November 2009, the
Council approved the revised resource allocation framework, removing the bias to large
countries and improving the effectiveness of resource allocation in GEF-5. With other
Council members, Australia lobbied for: an individual allocation to each country
(removing the group allocations which had seen Pacific countries competing for funds);
the application of resources floors and caps to protect equity; and flexibility for countries
with small allocations to use them across focal areas in support of national priorities.
All of these measures have been introduced.

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 b) Effectively targets development concerns and promotes
STRONG
issues consistent with Australian priorities

In An Effective Aid Program for Australia, the Australian Government states that one of the
strategic goals of the aid program is to support sustainable economic development. Under
this goal, the aid program seeks to reduce the negative impacts of climate change and
other environmental factors. GEF plays a role in addressing this goal.

c) Focuses on crosscutting issues, particularly gender,

SATISFACTORY
environment and people with disabilities

GEF is the world’s largest environment fund and specifically targets this crosscutting
issue. Funding is allocated under a number of focal areas including: climate change,
biological diversity, land degradation, international waters, and chemicals. GEF has also
adopted a new environment and social safeguards policy addressing a number of
crosscutting issues such as Indigenous and cultural rights.

GEF adopted a gender mainstreaming policy in May 2011. This policy sets out
requirements for GEF Secretariat and implementing agencies to have policies, strategies
or action plans that promote gender equality and gender aspects being incorporated in
program design, project design and monitoring and evaluation.

The GEF does not have any specific policies that address disability inclusive development.

d) Performs effectively in fragile states SATISFACTORY

GEF does not have a policy on fragile states. It has made some efforts to make access to
funding easier for least developed countries, small island developing states (SIDS) and
fragile states. For instance, the GEF’s Pacific Alliance for Sustainability, approved during
GEF-4, provides US$98.6 million to Pacific SIDS, while leveraging US$108.4 million in
cofinancing. The proportion of total GEF Trust Fund resources provided to LDCs and SIDs
also increased from only 11.9 per cent in GEF-3 to 18.4 per cent during GEF-4.

In GEF-5, the allocation system has been modified in relation to biodiversity, climate
change and land degradation so that eligible countries now get individual allocations in
relation to these focal areas. Furthermore, countries with a total allocation of less than
US$7 million can use this allocation in a flexible manner across focal areas, which will
assist these countries.

3. Contribution to the wider multilateral development system STRONG

As a central financial mechanism for the major environment conventions, GEF effectively
coordinates the international response to these conventions and, thereby, plays an
important coordinating role in the multilateral development system.

GEF also administers the Special Climate Change Fund and the Least Developed Country
Fund. It also provides secretariat services for the Adaption Fund, established under the

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Kyoto Protocol, which provides some degree of efficiency and coordination across the
complex multilateral architecture for climate change.

GEF provides large scale financing. Since its establishment in 1991, it has been the
largest funder of environment projects and has allocated US$10 billion to more than
2800 projects aimed at improving the global environment. This funding has been
supplemented by more than US$47 billion in co-financing.

GEF promotes knowledge through its Scientific and Technical Advisory Panel, which is
effective at providing specialist scientific and technical advice on environmental
challenges and practical advice about how to address these challenges. It provides this
advice to a range of stakeholders including GEF recipient countries and GEF
implementing agencies.

GEF has adopted a GEF-wide knowledge management initiative to enable its knowledge,
information and data to be identified, captured, and made easily accessible to all
of its partners and stakeholders. It is too early to assess the effectiveness of this fairly
new initiative.

a) Plays a critical role at global or national-level in

STRONG
coordinating development or humanitarian efforts

As the central financing body for four environment conventions, GEF helps to coordinate
the international response in relation to these conventions and the environmental issues
which they address. Therefore, GEF fills a critical niche in the international multilateral
system.

GEF administers the Special Climate Change Fund, the Least Developed Country Fund,
and provides secretariat services for the Kyoto Protocol Adaption Fund, providing some
degree of efficiency and coordination across the complex multilateral architecture for
climate change.

b) Plays a leading role in developing norms and standards or

STRONG
in providing large-scale finance or specialist expertise

GEF provides both large-scale financing and specialist expertise. Since its establishment
in 1991, it has been the largest funder of environment projects and has allocated
US$10 billion to more than 2800 projects aimed at improving the global environment.
This funding has been supplemented by more than US$47 billion in co-financing. GEF has
also given US$634 million in small grants to non-government organisations (NGOs) and
community organisations through its small grants program.

c) Fills a policy or knowledge gap or develops innovative

STRONG
approaches

GEF fills a policy and knowledge gap through the operations of Scientific and Technical
Advisory Panel (STAP). The panel provides specialist scientific and technical advice on
environmental challenges and practical advice on how to address them. It provides this
advice to a range of stakeholders including GEF recipient countries and GEF
implementing agencies.

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Another example of GEF filling a knowledge gap is through its work in the transfer of
environmentally sound technologies to developing countries. GEF’s current portfolio on
technology transfer covers almost 100 developing countries. Along the way, GEF has
generated a wealth of knowledge on technology transfer and has disseminated this
information through the publication of a series of communication products.

ORGANISATIONAL BEHAVIOUR
4. Strategic management and performance STRONG

GEF has a clear mandate and strategy to address global environmental issues and help
developing countries meet their obligations under global environment conventions. The
GEF-5 Focal Area Strategies document outlines GEF’s focal areas of biodiversity, climate
change, international waters, land degradation and chemicals, while its GEF-5
Programming Document outlines its operations and activities for the five-year-period
covered by the fifth replenishment.

In response to recipient requests and GEF evaluations, GEF is undertaking reforms as part
of its fifth replenishment to streamline project cycles and improve its overall efficiency.

GEF governing bodies (its Assembly and Council) are effective in guiding management.
The level of adoption of Council decisions is monitored by the independent GEF
Evaluation Office.

The evaluation office implements a range of high-quality monitoring and evaluation

processes which include performance evaluations, country portfolio evaluations, impact
evaluations, thematic evaluations and overall performance studies. An independent peer
review of the office in 2009 concluded that its independence ‘is assured’ and that ‘the
credibility of its reports is high’.

GEF evaluation generally informs decision making. For example, for each replenishment
period, its evaluation office completes an Overall Performance Study to review its
effectiveness and provide recommendations. GEF has been highly responsive to the
recommendations and incorporates them into its replenishments.

The current leadership is strong and has overseen reforms to help improve effectiveness.

GEF has satisfactory human resource policies and monitors the gender balance and
proportion of staff from developing countries. Recruitment of staff is in accordance with
World Bank procedures.

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 a) Has clear mandate, strategy and plans effectively
STRONG
implemented

GEF has a mandate to facilitate international cooperation and finance in order to address
global environmental issues and assist developing countries to meet their obligations
under global environment conventions.

GEF’s approach is underpinned by two basic principles:

> funds are to be incremental to the funds required for national sustainable
development, and
> resources must be targeted towards generating global environmental benefits.

GEF has a clear operational strategy for each focal area and crosscutting area of work.
GEF’s operations and activities for the five-year period covered by the fifth replenishment
are outlined in the GEF-5 Programming Document.

GEF has been continually improving and streamlining its project cycle including the
adoption of programmatic approaches as part of the reforms agreed for the GEF-5.

GEF has reduced the average approval period for a project to seventeen months. This is a
significant improvement from 44 months, as it has been previously.

b) Governing body is effective in guiding management STRONG

GEF’s governance structure consists of a high-level Assembly, the main governing Council
and a Secretariat. The GEF Assembly, composed of representatives of all member
countries, meets every three to four years and is responsible for reviewing and evaluating
GEF’s general policies, operations and membership.

The GEF Council is composed of 32 constituencies—14 from developing countries, 16 from

developed countries and two from countries with transitional economies. It meets twice a
year and is primarily responsible for adopting, developing and evaluating GEF programs,
with decisions made by consensus.

The GEF Secretariat is responsible for ensuring Assembly and Council decisions are
effectively implemented, and that operational strategies are followed. It also coordinates
the formulation of projects and oversees their implementation.

The effectiveness of the Secretariat in implementing Council decisions is monitored by the

GEF Evaluation Office. To date, the Evaluation Office has tracked 99 decisions with 88
having been adopted or no longer relevant due to strategic changes and other policy
decisions taking precedence.

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 c) Has a sound framework for monitoring and evaluation,
and acts promptly to realign or amend programs not STRONG
delivering results

GEF has a sound framework for monitoring and evaluation.

The main responsibility for monitoring, evaluation and reporting lies with implementing
agencies. However, GEF has an independent system for verifying results. The Evaluation
Office reviews terminal evaluation reports to verify and assess quality. Where an
implementing agency already uses an independent evaluation office to validate terminal
evaluations, the Evaluation Office assesses the independent report to ensure that it meets
GEF standards. The evaluation office implements a range of high quality monitoring and
evaluation processes which include performance evaluations, country portfolio
evaluations, impact evaluations, thematic evaluations and overall performance studies.

There is evidence of GEF acting when projects are ineffective. In 2011, five projects
(with the combined worth of US$12 million) were cancelled or dropped due to poor
performance.

In order to effectively monitor projects, GEF intends to integrate its results-based

management framework into its information technology infrastructure. The Secretariat
will work to strengthen this area over the next several years.

An independent professional peer review of the evaluation function of the GEF was
conducted by consultants. The review found that the Evaluation Office has made
commendable efforts to improve and facilitate professional evaluation work in the GEF
and to provide leadership, within the GEF partnership and internationally, especially in
the United Nations Evaluation Group. It concluded that the Evaluation Office’s
independence ‘is assured’ and that ‘the credibility of its reports is high’.

GEF evaluations generally inform decision making. For example, for each replenishment
period, its Evaluation Office completes an Overall Performance Study to review its
effectiveness and provide recommendations. GEF has been highly responsive to the
recommendations and incorporates them into its replenishments.

d) Leadership is effective and human resources are

STRONG
well managed

The current leadership is strong and has overseen reforms to help improve effectiveness.
The GEF Chief Executive Officer provides strong leadership within the organisation,
including overseeing a number of reforms to make GEF more effective, responsive and
results-focused.

GEF has satisfactory human resource policies. Recruitment of staff is in accordance with
World Bank procedures. Management efficiency and effectiveness is monitored by the
Evaluation Office as part of its Annual Monitoring Report processes. The 2011 Annual
Monitoring Report indicates a continuing improvement in gender equality and geographic
distribution of staff, with the percentage of female staff increasing from 35 per cent in
2010 to 38 per cent in 2011, and the proportion of staff from developing to developed
countries being 48 per cent to 52 per cent.

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 5. Cost and value consciousness SATISFACTORY

GEF continues to improve the cost effectiveness of its activities. GEF estimates that its
climate change mitigation portfolio has avoided or prevented carbon emissions for a cost
of less than US$2 per ton.

GEF’s internal administrative costs are quite low in proportion to its external expenditure,
noting that it does not implement projects directly.

Within partner agencies, GEF provides a standard project cycle management fee to
manage project implementation. In November 2011 the Secretariat established a working
group to review the full fee structure for agencies and decrease the total cost.

Within individual projects, management costs have been reduced from an average of
15 per cent under GEF-3 to five per cent in GEF-5. GEF only scrutinises project management
budgets when they exceed the five per cent threshold.

The roles and responsibilities of implementing agencies outlined in the GEF Instrument
include ensuring the cost effectiveness of GEF-financed activities. However, the GEF
project identification form does not require cost effectiveness to be demonstrated.

a) Governing body and management regularly scrutinise costs

SATISFACTORY
and assess value for money

GEF estimates that its climate change mitigation portfolio has avoided or prevented
carbon emissions for a cost of less than US$2 per ton.

GEF’s internal administrative costs are quite low in proportion to its external expenditure,
noting that it does not implement projects directly.

Within partner agencies, GEF provides a standard project cycle management fee to
manage project implementation. This has been reduced from 10 per cent to eight per cent
for programmatic approaches.

In November 2011 the Secretariat established a working group to review the full fee
structure for agencies aimed at decreasing the total cost of the fee structure.

b) Rates of return and cost effectiveness are important factors

SATISFACTORY
in decision making

The cost effectiveness of project proposals is reviewed by the GEF at the endorsement
stage. However, GEF only scrutinises project management costs for individual projects
when thresholds for project management budgets are exceeded.

From GEF-3 to GEF-5 project management costs have been reduced from an average of
15 per cent to five per cent.

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 c) Challenges and supports partners to think about value
SATISFACTORY
for money

The roles and responsibilities of implementing agencies outlined in the GEF Instrument
include ensuring the cost effectiveness of GEF-financed activities.

Part two of the Project Identification Form addressing project justification requires
applicants to describe the incremental/additional cost they would like GEF to fund, but it
does not ask them to explain how this investment will be cost effective.

When considering the cost effectiveness of projects at the CEO endorsement stage of
approval processes, if the GEF is not satisfied with the project budget it will ask the
agency to provide further details, and if required, amend the project proposal.

6. Partnership behaviour STRONG

Generally, GEF’s partnerships are viewed as effective by relevant stakeholders. GEF works
closely with its partner agencies—European Bank for Reconstruction and Development,
Food and Agriculture Organization, International Fund for Agricultural Development,
Inter-American Development Bank, joint agencies, United Nations Development
Programme, United Nations Environment Programme, United Nations Industrial
Development Organization and the World Bank—which play a key role in managing GEF
projects on the ground. GEF also works directly with Convention secretariats, which,
along with its partner agencies attend GEF council meetings.

GEF values align with partner country priorities. GEF has supported 40 countries to
complete National Portfolio Formulation Exercises. This tool assists partner governments
to coordinate overall environment sector activities based on country priorities. There is
some variability in the level of ownership between different countries. GEF is working to
improve country ownership including through a pilot to increase the number of GEF
implementing agencies, with a particular focus on national agencies.

GEF supports a network of more than 600 accredited environment and sustainable
development non-government organisations and the network is represented at council
meetings.

The GEF Instrument requires implementing agencies to cooperate with relevant

stakeholders. The Project Identification Form requires applicants to identify all key
stakeholders involved in a project and outline their respective roles as applicable.

a) Works effectively in partnership with others STRONG

Generally, GEF’s partnerships are viewed as effective by relevant stakeholders. GEF works
closely with its partner agencies—including European Bank for Reconstruction and
Development, Food and Agriculture Organization, International Fund for Agricultural
Development, Inter-American Development Bank, joint agencies, United Nations
Development Programme, United Nations Environment Programme, United Nations
Industrial Development Organization and the World Bank—which play a key role in
managing GEF projects on the ground. GEF also works directly with Convention
secretariats, which, along with its partner agencies, attend GEF council meetings.

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GEF is improving its relationship with recipient countries. The Country Support Program
provides a package of support to GEF focal points to engage in outreach, training to
strengthen country coordination, information sharing, and promoting country ownership
of GEF financed projects.

GEF has a functioning conflict resolution framework. In 2011, 85 per cent of conflict cases
reported to the CEO were resolved successfully and 80 per cent of complaints were also
successfully resolved.

GEF is also piloting direct access and some national implementing agencies will be able
to access funding directly. GEF already has a mechanism where some countries can access
funds directly for two activities—the National Portfolio Formulation Exercise and the
development of communication and reports which member countries must provide under
Conventions.

b) Places value on alignment with partner countries’ priorities

SATISFACTORY
and systems

GEF places high importance on aligning its activities with partner countries’ priorities
and systems, and it has a policy in place to enhance country ownership. Proposals for
GEF funding need to be supported by a letter from the country focal point stating that the
project is in line with national objectives and priorities. However, there is still some
variability in country ownership between different countries in relation to GEF projects.

The Country Support Program, referred to above, includes national multistakeholder

dialogues, national meetings and workshops and voluntary national portfolio
formulation exercises.

Through the national portfolio formulation exercise, the GEF provides countries with up
to US$30 000 to establish or strengthen national processes and mechanisms to facilitate
GEF programming. This has been utilised by 40 countries in 2011. There is some
variability in the level of ownership between different countries. The GEF is also seeking
to enhance country ownership through its ‘Broadening the GEF Partnership’ pilot which
seeks to accredit up to five new national institutions as GEF implementation agencies.

c) Provides voice for partners and other stakeholders in

STRONG
decision making

GEF has a very active non-government organisation (NGO) network of more than 600
accredited environment and sustainable development NGOs which it regularly engages.
The NGO network meets the day before Council meetings and an NGO representative is
given time to address the Council at Council meetings. Some Council members attend the
NGO meeting.

The Instrument for the Establishment of the Restructured Global Environment Facility
states that GEF-financed projects shall provide for ‘consultation with, and participation as
appropriate of, major groups and local communities throughout the project cycle’.

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The Project Identification Form requires applicants to identify all key stakeholders
involved in the project and their respective roles, if applicable. However, it does not
require for stakeholder consultation to be undertaken by the implementing agencies.

7. Transparency and accountability VERY STRONG

GEF has high levels of transparency and publishes all documentation on its website.
Its project database is publicly available and easily accessible on the internet. However,
GEF is not a member of the International Aid Transparency Initiative.

Resource allocation is transparent through GEF’s System for Transparent Allocation of

Resources, which is consistently applied and allows countries to know in advance how
much money is available to them.

GEF’s trustee is the World Bank and strong internal controls, fiduciary management and
audit compliance are applied to all of its funding.

GEF is encouraging transparency and accountability in partners by applying minimum

fiduciary standards to all GEF implementing agencies, which include a strong
transparency component.

a) Routinely publishes comprehensive operational

STRONG
information, subject to justifiable confidentiality

GEF publishes all policies, decisions, evaluations and operational documents as a matter
of course. The Instrument for the Establishment of the Restructured Global Environment
Facility states that GEF operational policies, ‘with respect to GEF-financed projects shall
provide for full disclosure of all non-confidential information’.

GEF also has a project database accessible via the internet which allows public access to
all relevant documents and information on GEF programs and projects.

b) Is transparent in resource allocation, budget management

VERY STRONG
and operational planning

GEF is transparent in resource allocation through the application of the STAR. Through
the STAR, GEF allocates specific amounts of money for each country in relation to the
climate change, land degradation and biodiversity focal areas. This provides countries
with a degree of certainty in regards to the money available to them. Rather than
allocating funding to all eligible countries, which could lead to some countries having
allocations and never accessing these funds, GEF only makes allocations to countries
which meet several conditions, including that the country must have had at least one
national project in the last five years. This ensures that the country has the capacity to
implement GEF projects. The allocation is then decided based on global environmental
priorities, the capacity of the country and policies and practices relevant to successful
implementation of GEF projects.

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 c) Adheres to high standards of financial management, audit,
VERY STRONG
risk management and fraud prevention

In accordance with the Instrument for the Establishment of the Restructured Global
Environment Facility, the World Bank is the trustee for the GEF and is responsible to the
GEF Council for the performance of its fiduciary responsibilities.

These are clearly outlined in Annex B of the GEF Instrument and address:

> accounting and reporting

> investment management and cash flow management
> financial and risk management
> management of transactions with partners
> commitment and disbursement of funds
> infrastructure and systems, and
> legal services.
GEF’s resources have been managed responsibly and effectively by the World Bank
as Trustee.

d) Promotes transparency and accountability in partners

STRONG
and recipients

GEF is encouraging transparency and accountability in partners by applying minimum

fiduciary standards to its implementing agencies. These standards were approved by GEF
Council in June 2007. As at June 2010, only four agencies had met all the fiduciary
standards, with the remaining six having monitoring action plans in place to support
their adoption.

The fiduciary standards, amongst other things, include requirements for:

> a financial disclosure policy that addresses possible or apparent conflict of interest
> a code of ethics defining the standards to be upheld by agency staff, including the
protection of agency and GEF assets
> internal auditing in line with internationally recognised standards, and
> a hotline or whistleblower mechanism for reporting of suspected unethical, corrupt,
or fraudulent activities.

The fiduciary requirements will apply to the new agencies accredited under the GEF’s new
‘Broadening the GEF Partnership’ pilot.

© Commonwealth of Australia 2012

This document is online at www.ausaid.gov.au/publications

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