Ensuring that Climate Finance is an Effective Driver of Sustainable Development.

Organized by Transparency International

In this event, panellists discussed ways of incorporating governance safeguards into commitments and processes that come out of Rio+20, while offering concrete guidance on the form that these safeguards should take.

David Banisar, Article 19, chairing the event, spoke of the need for more transparent approaches to establishing climate finance, stressing that the establishment of safeguards is about engendering trust, building participation, supporting knowledge, and having real discussions in the multilateral environment. Calling for a “transparency revolution,” he stressed the need for knowledge collaboration, and lamented the lack of strong commitments and legal measures in the outcome document that would ensure transparency and access to information.

Lisa Elges, Transparency International, spoke of the link between corruption, environmental destruction, conflict and poverty, underscoring the need for robust governance based on transparency and accountability. She underlined actions that encourage accountability, including: mapping and assessment; monitoring; learning through networking and multi-stakeholder engagement; and corruption awareness within society in order to demand change and find solutions. On anti-corruption solutions, she highlighted advocating for legal centres within countries for anonymous tip-offs and protection for whistle-blowers, and developing integrity pacts as a tool in public procurement processes. She elaborated on potential actions such as an undertaking by bidders and public authorities to not accept bribes, and suggested arbitration as a conflict resolution mechanism.

William Ehlers, Global Environment Facility (GEF), elaborated on the GEF’s fiduciary standards as a management tool to avoid abuse of allocated climate and development project funds. He stressed the core principles of professional standards of independence, transparency, monitoring and response, and summarized the GEF’s required financial processes, including: external financial audits; financial management and control frameworks; financial disclosure; a code of ethics; and internal audits. On activity processes and oversight, he suggested implementing appraisal standards, procurement processes, monitoring systems, and independent evaluations of possible misconduct.

Rafael Lopes Torres, Brazil’s Tribunal de Contas da União, stressed the importance of making climate finance an effective driver of sustainable development through performance audits, which address money transfers from the federal government to states, municipalities and private entities, and of assessing how the money is spent. On challenges faced during these phases, he outlined: the technical capacity of proponents; compatibility of the project in relation to the general objectives of the funding; project feasibility analysis; evaluation of project costs; and following-up the project’s execution.

Participants discussed: evaluating investments and follow-up after the portfolio of investments has been implemented; challenges to implementing audit policies; minimizing the risks of abuse of funds in fragile States; the cycle of corruption in municipalities and local governments; investing in social control mechanisms; and capacity building for civil society through the development of local networks.