75th meeting of the Executive Committee, Montreal, 16-20 November 2015

 
Introduction

 

The 75^th meeting of the Executive Committee, which took place in Montreal, Canada from 16 to 20 November 2015, was attended by the representatives of the 14 Executive Committee member Parties and by participants co-opted from 18 other countries (see attached list). Mr. John Thompson of the United States of America presided over the meeting as Chair of the Executive Committee in 2015. Representatives of the Ozone Secretariat, implementing agencies, UNEP as the Treasurer, and representatives of the Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants (CCAC), the Global Environment Facility (GEF) Secretariat, the Alliance for Responsible Atmospheric Policy, the Environmental Investigation Agency and Greenpeace also attended.

 

The agenda for the 75^th meeting included, among other items, the 2016-2018 business plan of the Multilateral Fund, the draft monitoring and evaluation work programme, the consolidated project completion report (PCR), UNEP’s Compliance Assistance Programme (CAP) budget, core unit costs for UNDP, UNIDO and the World Bank, the accounts of the Multilateral Fund, and the budget for the Fund Secretariat. Policy matters addressed included the template for agreements for stage II of HCFC phase-out management plans (HPMPs), the format for presentation of surveys on and the results of ODS alternatives, a report on the fully developed Multilateral Fund Climate Impact Indicator (MCII), terms of reference for the review of the administrative cost regime and its core unit costs, and the main procedures of the operation of the Executive Committee. In the margins of the meeting, the Sub-group on the Production Sector discussed the HCFC production phase‑out management plan (HPPMP) for China, as well as the request for the technical audit of the HCFC production sector in Mexico.

 

The Committee took a total of 75 decisions and approved investment projects and work programme activities for 94 countries with a value of US $112.38 million plus US $13.74 million in support costs for bilateral and implementing agencies.

 

Status of contributions and disbursements (decision 75/1)

 

As at 16 November 2015, the balance of the Multilateral Fund stood at US $110 million of which US $96 million was in cash and US $14 million in promissory notes. Seventy-six per cent of pledges for 2015 had been paid and the balance on the gain from the fixed-exchange-rate-mechanism stood at US $5.4 million. The Treasurer gave further update on the status of the Fund on the final day of the meeting (20 November 2015) to advise that the balance of the Multilateral Fund has increased to US $121 million after taking into account the recording of additional deposit from one contributing party, the encashment of two promissory notes and unrecorded interest.

 

The Executive Committee urged all Parties to pay their contributions to the Multilateral Fund in full and as early as possible and requested the Secretariat, as follow-up to decision 74/3(b) on outstanding contributions,  to report to the 76^th meeting on the feedback received from countries with outstanding contributions from one triennium or more.

 

With regard to the contributions of the Russian Federation, the Executive Committee noted that on an exceptional basis, the Party would make its contribution under the fixed-exchange-rate mechanism (FERM) in US dollars rather than in its national currency owing to a particular administrative banking constraint.

 

 Status of resources and planning

 

Report on balances and availability of resources (decision 75/2)

 

Implementing agencies returned funding and support costs of US $625,064 against completed projects to the Multilateral Fund. The Executive Committee requested bilateral and implementing agencies with projects completed over two years previously to return the balances to the 76^th meeting, and to disburse or cancel commitments not needed for completed projects and project completed “by decision of the Executive Committee” in order to return balances to the 76^th meeting.

 

Update on the implementation of the 2015-2017 business plans (decision 75/3)

 

The Executive Committee noted the update on implementation of the 2015-2017 business plan[1] and that activities amounting to US $28,467,046 in the 2015 business plan had not been submitted to the 75^th meeting, but that several of those activities had been included in the business plans of the bilateral and implementing agencies for the year 2016.

 

With respect to the decision by the Parties requesting the Executive Committee to take action to ensure, as far as possible, that the whole of the triennial budget is committed by the end of the triennium (decision XXVI/10), the Executive Committed encouraged bilateral and implementing agencies to carefully plan the timing and value of tranches in stage II of HPMPs to reduce possible carryovers to a subsequent triennium due to the late submissions of tranche requests. Article 5 countries for which multiple tranche requests had been submitted to the same meeting due to major delays in implementation would submit revised plans of action to take into account the reallocation of the outstanding tranches.

 

 

Tranche submission delays (decision 75/4)

 

Fifty-six out of 79 activities related to tranches of HPMPs that were due for submission to the 75^th meeting had been submitted on time; HPMP activities for Senegal and Tunisia were subsequently withdrawn following discussion with the Secretariat. There was no indication that any of the countries with delayed tranches would be in non-compliance and all countries concerned were in compliance with the 2013 freeze on HCFC consumption. In response to the request of the Executive Committee the Secretariat would send letters to the countries concerned inviting them to submit their outstanding tranches of HPMPs to the 76^th or 77^th meeting.

 

Programme implementation

 

Monitoring and evaluation

 

2015 consolidated project completion report (decision 75/5)

 

The Executive Committee noted the 2015 consolidated project completion report[2] and urged bilateral and implementing agencies to submit outstanding PCRs for multi-year agreements (MYAs) and individual projects, and urged cooperating implementing agencies to complete their portion of PCRs to allow the lead implementing agency to submit them according to the schedule. The Committee invited all those involved in the preparation and implementation of MYAs and individual projects to take into consideration the lessons learned from PCRs[3] when preparing and implementing future projects and approved. The PCR format for HPMP[4] was approved and the Senior Monitoring and Evaluation Officer was requested to further develop the pilot application for searching for and extracting information on lessons learned in PCRs to cover all the PCRs, and to report back to the 76^th meeting.

 

Multi-year agreement database report (decision 75/6)

 

The Executive Committee noted the report on the multi-year agreement (MYA) database^[5] pursuant to decision 74/6, regarding options to reduce the burden on bilateral and implementing agencies when submitting information for the MYA database and to enable Article 5 countries to confirm the data being entered in the MYA database by the agencies. The Senior Monitoring and Evaluation Officer and the Secretariat would work closely with bilateral and implementing agencies on the implementation of decision 74/6, and to report back to the Executive Committee at the 76^th meeting.

 

Desk study on the evaluation of HCFC phase-out projects in the refrigeration and air-conditioning manufacturing sector

 

The Executive Committee noted the desk study on the evaluation of HCFC phase-out projects in the refrigeration and air-conditioning (RAC) manufacturing sector[6], as a work in progress and invited bilateral and implementing agencies to take into account, when appropriate, the findings and recommendations of the desk study in the design and implementation of projects in that sector.

 

The Secretariat, in cooperation with bilateral and implementing agencies, would make available, the outcome of the demonstration projects implemented to date, as well as key lessons learned from relevant completed projects on the Multilateral Fund website.

 

Desk study on the evaluation of the pilot demonstration projects on ODS disposal and destruction (decision 75/8)

 

The Executive Committee invited the bilateral and implementing agencies to take into account, when appropriate, the findings and recommendations of the desk study on the evaluation of the pilot demonstration projects on ODS disposal and destruction[7] and requested the Senior Monitoring and Evaluation Officer, when including the field study on ODS disposal in a future draft monitoring and evaluation work programme, to reassess the projects that were included, to provide an update on the status of implementation or completion of the projects and to take into account the comments made by the Executive Committee[8] on the desk study and the terms of reference.

 

Draft monitoring and evaluation work programme for the year 2016 (decision 75/9)

 

The monitoring and evaluation work programme for the year 2016 was approved at a budget of US $177,226 to complete the evaluation of HCFC phase-out in the RAC manufacturing sector. The terms of reference^[9] for phase two of the aforementioned evaluation, were also approved.

 

Consolidated progress report and 2014 progress reports of bilateral and implementing agencies at 31 December 2014 (decisions 75/10 - 75/15)

 

The Executive Committee noted the 2014 consolidated progress report[10] and annual progress reports on the implementation of approved projects and activities submitted by bilateral and implementing agencies[11], and also noted with appreciation, the efforts undertaken by bilateral and implementing agencies in reporting the 2014 activities. Bilateral and implementing agencies would report to the 76^th meeting on 13 projects with implementation delays and 69 projects for which an additional status report was required. The Committee allowed the extension of the approved completion dates of the national phase‑out plans for Iraq and Yemen until December 2016, as those countries faced implementation issues due to political and institutional difficulties, and for the methyl bromide project in Trinidad and Tobago to March 2016.

 

The Executive Committee requested the Secretariat to prepare a paper for the 76^th meeting on issues relating to the recording of disbursements for activities associated with tranches of an MYA and the planned completion dates of tranches, and encouraged bilateral and implementing agencies to assist Article 5 countries in completing project preparation activities for HPMPs as soon as possible, and no later than current completion dates.

 

With regard to the agencies’ progress reports, the Committee extended or changed completion dates for a number of projects and requested bilateral and implementing agencies to submit specific reports on several approved projects to the 76^th meeting

 

Evaluation of the implementation of the 2014 business plans (decision 75/16)

 

The Executive Committee noted that all implementing agencies had a quantitative assessment of their performance of at least 70, as assessed against targets in the 2014 business plans. The trend analysis indicated that the performance of implementing agencies had not improved in 2014 in relation to 2013, but that the performance related to indicators such as “ODS to be phased out”, “ODS phased out”, “net emissions due to delays” and “funds disbursed for non-investment projects” might be improved by careful targeting in the future. Regarding the qualitative assessment of agencies based on input received from national ozone officers, the Committee requested relevant agencies to report to the 76^th meeting on their open and constructive discussions with national ozone units of the relevant countries.

 

Country programme data and prospects for compliance (decision 75/17)

 

The Executive Committee noted that 100 of the 125 country programme (CP) implementation reports for the year 2014 had been submitted through the web‑based system. Relevant implementing agencies were requested to continue assisting the Governments of Burundi, Mauritania, and South Sudan with respect to their licensing or quota systems for ODS and to report back to the 76^th meeting. The Executive Committee also requested relevant bilateral and implementing agencies to assist Article 5 countries in addressing data discrepancies between the CP and Article 7 reports.

 

The Executive Committee decided that the existing CP data report format would be used for the reporting of 2015 CP data and would consider a revised CP data report format at the 76^th meeting, taking into account the issues raised on the proposal for an updated CP report format in the discussions at the 75^th meeting[12].

 

Reports on projects with specific reporting requirements (decisions 75/18 – 75/21)

 

The Executive Committee considered the reports on projects with specific reporting requirements[13] and noted a report pertaining to the financial audit reports, work plans and progress reports for the halon, CFC production, foam, process agent II, solvent and CFC refrigeration servicing sectors in China, and requested a number of actions to be taken as appropriate including a request to China to undertake a study on the country’s production of CTC and its use for feedstock applications and to make the results of the study available to the Executive Committee by the end of 2018 (decision 75/18).

 

With regard to the accelerated CFC production phase-out project and the phase-out in consumption and production of  CTC in India, the Executive Committee approved action plans for the remaining activities associated with both projects, together with revised completion dates and revised agreements. UNDP was requested to undertake a study on India’s use of CTC for feedstock applications and to make the results of the study available to the Executive Committee by the end of 2016 (decision 75/19).

 

The Executive Committee noted with appreciation the report provided by UNDP regarding the temporary use of a high-global-warming potential (GWP) technology by foam enterprises that had been converted to a low-GWP technology, and the efforts made to facilitate the availability of pre‑blended polyol systems with low-GWP blowing agents, domestically in the Dominican Republic and in El Salvador. The supply of low-GWP pre-blended polyols for foam enterprises in El Salvador had been secured and El Salvador would be able to complete the conversion in the foam sector using low-GWP alternatives as planned. UNDP would continue to assist the Dominican Republic in securing the supply of low-GWP-alternative technology and to provide a report on the status of the conversion of the enterprises in the foam sector (decision 75/20).

 

The Executive Committed requested bilateral and implementing agencies to share the UNDP report, “Low‑cost options for the use of hydrocarbons in the manufacture of polyurethane foams - An assessment for the application in Multilateral Fund projects”^[14], together with information on other alternatives, when assisting Article 5 countries in preparing projects for the phase-out of HCFC-141b in polyurethane foam applications (decision 75/21).

 

2016-2018 business plans (decisions 75/22 - 75/27)

 

The Executive Committee endorsed the 2016-2018 consolidated business plan of the Multilateral Fund[15] as adjusted by the Secretariat and the Executive Committee, and by adding to the 2016 business plan the HPMPs from the 2015 business plan that had been deferred at the 75^th meeting, while noting that endorsement denoted neither approval of the projects identified therein nor their funding or tonnage levels. Bilateral and implementing agencies were requested to include in their business plans project preparation for stage II of the HPMPs for Kenya and the Syrian Arab Republic. Performance indicators were approved for UNDP, UNEP, UNIDO and the World Bank[16].

 

With regard to the 2015–2017 business plan for Germany the Executive Committee noted that further approvals after the 75^th meeting should not exceed US $1,018,810, and that at current replenishment levels, approvals in principle for the years 2018–2020 should not exceed US $2,572,768. The Government of Germany was requested to indicate how it would rationalize its remaining new business plan activities amounting to US $1.5 million in 2016 and 2017 taking into account approvals and forward commitments at the 75^th meeting, and to report back to the 76^th meeting (decision 75/23).

 

Project proposals

 

Policy issues

 

Uncertainty on incremental operational costs in the foam sector (decision 75/28)

 

The Secretariat was requested to prepare a document for the 76^th meeting on the calculation of the incremental capital costs and incremental operating costs for foam sector alternatives, providing transparency and consistency in comparing the quality of foam produced for different applications and transparency on the sources of information, taking into account prices in different regions and the size of enterprises.

 

Incremental cost of the conversion of the heat exchanger lines (decision 75/43(f))

 

Following consideration of the assessment of incremental costs for the conversion heat exchangers manufacturing lines in regard to stage II of the HPMP in one country, the Executive Committee requested the Secretariat to undertake additional work on the level of incremental costs for the conversion of heat exchangers manufacturing lines in enterprises converting to R-290 technology, to report to the 76^th meeting. 

 

Project proposals (decisions 75/29 to 75/65)

 

The Executive Committee approved 188 investment projects and work programme activities in 94 countries at a total value of US$ 126,121,207 including support costs of US $ 13,737,886.

 

Projects to demonstrate low-GWP technologies and feasibility studies on district cooling pursuant to decision 72/40 (decisions 75/30, 75/33 to 75/36, 75/40 to 75/42)

 

The Executive Committee established a contact group to consider the 11 demonstration projects and two feasibility studies for district cooling, as well as the possibility of increasing the US $10 million available for funding, bearing in mind the additional projects would be submitted to the 76^th meeting. In accordance with the recommendations of the contact group, the Executive Committee agreed to provide funding for two feasibility studies for district cooling in Egypt and Kuwait at a cost of US $200,000 including support costs and two projects to demonstrate low-GWP technologies in Colombia (US $535,000 including support costs) and Morocco (US $300,135 including support costs). The Committee also agreed to allow the resubmission to the 76^th meeting of five demonstration project proposals for the foam sector (Colombia, Egypt, Saudi Arabia, South Africa and Thailand) and three demonstration project proposals for the RAC manufacturing sector (China, Saudi Arabia and West Asia) that had been submitted to the 75^th meeting, in addition to those projects that had received project preparation funding at the 74^th meeting. The request for funding for preparation for a demonstration project for low-GWP technologies performance in air-conditioning applications in the Federated States of Micronesia was not approved.

 

Phase-out of HCFCs

 

The Executive Committee approved stage I of the HPMPs for Botswana for the period 2015 to 2020 and for Libya for 2015 to 2018 with total funding in principle of US $616,000 and US $2,042,462, respectively including support costs, bringing the total number of Article 5 countries with an approved stage I of an HPMP to 142^[17]. Stage II of the HPMP was approved in principle for six countries[18].

 

The Committee approved a total of US $74,647,633 (including support costs) for tranches of HPMPs or stage I/stage II of HPMPs for 35 countries^[19]. These tranches included, among others, the first tranche of stage I of the HPMP for Botswana and Libya, the fifth tranches of five HCFC phase‑out sector plans for China, the third tranche of the solvent sector plan for China, and the first tranche of stage II of the HPMP for Brazil, Colombia, Guyana, Lebanon, Oman, and Sudan. The Executive Committee also approved US $25.344 million (including support costs) for the fourth tranche (2016) of stage I of the HPPMP for China.

 

The Executive Committee approved a total of US $877,075 (including support costs) for the preparation of stage II of HPMPs/HPPMP for seven countries[20], and funding of US $537,600 (including support costs) for verification report for stage I of HPMPs for 16 countries.

 

Other projects approved included the fourth tranche (2016) of stage I of the HPPMP for China, the extension of IS projects for 29 countries[21] at an amount of US $4,374,577 including support costs, and national surveys of ODS alternatives in 42 countries[22] at a cost of US $3,255,350 including support costs (decisions 75/29 and 75/32).

 

Tranches of stage I of HPMPs for two countries were withdrawn by their respective governments during the course of the 75^th meeting.

 

UNEP’s Compliance Assistance Programme (CAP) budget for 2015 (decision 75/38)

 

The Executive Committee approved the 2015 CAP budget at a level of US $9,540,000, plus agency support costs of 8 per cent (US $763,200) and noted the 2016–2018 rolling strategy proposed by UNEP for its CAP and the approaches contained therein.  UNEP was requested to continue to submit an annual work programme and budget for the CAP, providing detailed information on the progress of the four new activities identified in the 2016 work programme where the global funds would be used, extending the prioritization of funding between CAP budget lines so as to accommodate changing priorities, and providing details on the reallocations made in its budget pursuant to decisions 47/24 and 50/26. UNEP would report on the current staff post levels and inform the Executive Committee of any changes thereto, particularly in respect to any increased budget allocations.

 

2016 core unit costs for UNDP, UNIDO, and the World Bank (decision 75/39)

 

The Executive Committee approved core unit funding for 2016 for UNDP of US $2,040,715, UNIDO of US $2,040,715, and the World Bank of US $1,725,000, and noted with appreciation, that the World Bank’s core unit operation was again below its budgeted level and that the World Bank would be returning unused balances.

 

Template for draft agreements for stage II of HPMPs (decision 75/66)

 

The Secretariat would resubmit the draft template Agreement for stage II of HPMPs[23] for consideration at the 76^th meeting, taking into account the discussion at the 75^th meeting and comments received from Executive Committee members no later than 31 December 2015, and including the specific sources of the language included in the draft agreement.

 

Format for preparation of the surveys of ODS alternatives and presentation of the resulting data (decision 75/67)

 

The Executive Committee noted the document on the format for the surveys of ODS alternatives[24] on the understanding that information contained in Part I (Preparation of the surveys) and Annex I (Use of ODS alternatives per sector) of the document was provided for guidance purposes only. Surveys would be conducted on a voluntary basis, information would be collected where available, and the results would solely be for information purposes. National surveys on ODS alternatives would be undertaken by Article 5 countries that had received funding from the Multilateral Fund to cover the years 2012–2015, with the assistance of the relevant bilateral or implementing agency and using the methodology and approach agreed between the country and the agency. The results of the survey would be presented as per Part II (Presentation of the results of the surveys) and Annex II (Data analysis tables by sectors) of document UNEP/OzL.Pro/ExCom/75/77/Rev.1.

 

Report on the Multilateral Fund Climate Impact Indicator (MCII) (decision 75/68)

 

The Executive Committee noted a report on the finalization of the MCII based on the feedback received from the Executive Committee at the 73^rd meeting. The report also contained the response from the Intergovernmental Panel on Climate Change, and feedback from the World Bank. The Secretariat would continue to calculate the impact on the climate of investment projects in the RAC manufacturing sectors using the MCII model, and it could apply the methodologies described in paragraph 14 of document UNEP/OzL.Pro/ExCom/75/54 for investment projects in all other manufacturing sectors.

 

Terms of reference for the review of the administrative cost regime and its core unit funding budget (decision 75/69)

 

The Executive Committee approved the revised terms of reference for the review of the administrative cost regime and its core unit funding budget[25] for the assessment of administrative costs for the 2018‑2020 triennium and a budget of US $60,000 for the Secretariat to conduct the administrative cost study. The report on the review of the administrative cost regime and its core unit funding budget would be considered at the first meeting in 2017, in line with decision 73/62(c).

 

Accounts of the Multilateral Fund

 

Final 2014 accounts (decision 75/70)

 

The Executive Committee noted the final financial statements of the Multilateral Fund as at 31 December 2014[26], which had been produced compliant with International Public Sector Accounting Standards (IPSAS), and that UNEP had received the report of the United Nations Board of Auditors for the biennium ending 31 December 2014 which included no major issues of relevance to the Multilateral Fund. Furthermore the Committee noted the feedback from the Treasurer on the bank account of the Multilateral Fund in New York which would continue to be used for contributions from Parties only, and that under the IPSAS, contributions outstanding for up to three years are reported under the “voluntary pledges receivable” category and contributions outstanding for more than three years are maintained under “the doubtful accounts receivable” category. The Executive Committee requested the Treasurer to record in the 2015 accounts of the Multilateral Fund the differences between the implementing agencies’ provisional 2014 financial statements and final 2014 statements and authorized the Treasurer to restate the 2014 expenditure balance in the 2015 accounts so that the UNIDO 2014 accounts met the IPSAS reporting requirements.

 

Reconciliation of the 2014 accounts (decision 75/71)

 

The Executive Committee noted the reconciliation of the 2014 accounts^[27] and a number of reconciling items, and requested the Treasurer and UNIDO to carry out a number of adjustments and related actions. UNEP was requested to submit a revised 2014 progress report to the 76^th meeting with a view to completing the 2014 reconciliation of accounts exercise.

 

Budgets of the Fund Secretariat (decision 75/72)

 

The Executive Committee noted the approved 2015, 2016, and 2017 and proposed 2018 budgets of the Fund Secretariat[28] and approved the staff and operational costs of the 2018 budget[29]^,[30] while giving the Secretariat the option to update this budget and submit it to the 76^th meeting. The Secretariat was authorized to reallocate funding among budget lines in the 2015 approved budget to absorb the additional costs incurred due to the introduction of UMOJA in June 2015 and a higher number of meeting documents than originally estimated. The Secretariat would report back to the Executive Committee at its 77^th meeting if any funding transfers exceeded the 20 per cent limit within the Chief Officer’s authority.

 

Main Procedures of the operation of the Executive Committee

 

The Executive Committee took note of the analysis of the main procedures of the operation of the Executive Committee including the roles of the Secretariat and the implementing agencies regarding their provision of advice to the Executive Committee and, where applicable, to beneficiary countries^[31].  The document to be prepared for the 76^th meeting of the operation of the Executive Committee would consider concerns regarding the accountability of implementing agencies, the issue of countries being able to speak in order to clarify issues regarding their own projects, as well as the review of the two meetings per year scenario pursuant to decision 73/70(h).

 

Production sector (decisions 75/73-75/74)

 

The Sub‑group on the Production Sector (Australia (facilitator), Bahrain, Brazil, Egypt, Grenada, India, Italy, Japan, Sweden and the United States of America) met in the margins of the 75^th meeting on a number of matters including the draft HCFC production sector guidelines; the 2014 verification report of HCFC production in China; the 2015 progress report and request for 2016 tranche of the HPPMP for China; preliminary data and a request for authorization to carry out the technical audit of the HCFC production sector in Mexico, and also agreed to discuss, under “Other matters”, the request for project preparation for stage II of the HPPMP for China^[32].

 

The draft HCFC production sector guidelines would be considered at the 76^th meeting. The Sub‑group was unable to reach agreement with respect to the technical audit of the HCFC production sector in Mexico.

 

Date and venue of the 76^th and 77^th meetings of the Executive Committee (decision 75/75)

 

The Executive Committee confirmed that it would hold its 76^th meeting in Montreal from 9 to 13 May 2016 and decided to hold the 77^th meeting in Montreal from 28 November to 2 December 2016.

 

Report of the 75^th meeting

 

A complete record of all decisions made at the 75^th meeting can be found in the “Report of the Seventy-fifth meeting of the Executive Committee of the Multilateral Fund for the Implementation of the Montreal Protocol” (UNEP/OzL.Pro/ExCom/75/85) which is published on the Multilateral Fund’s website (www.multilateralfund.org). The report is available in Arabic, English, French, and Russian.

 

 

 

 

Annex I - Attendance at the 75^th meeting of the Executive Committee