Background
The Second meeting of the Board of the Fund for responding to Loss and Damage (FLD) took place in Songdo – Incheon, in the Republic of Korea from the 9th to the 12th of July. This meeting was a landmark progress in the operationalisation of the Fund for responding to Loss and Damage to assist vulnerable developing countries and looking forward to the next scheduled meetings. The Fund Board members, representatives and observers discussed points on the agenda and below are our reflection on the items on the agenda:
Selection of the Executive Director of the Fund
The report of the ad hoc subcommittee on the selection process of the Executive Director (ED) including the terms of references was adopted and considered to invite the Board to select the ED of the Fund through a merit-based, open and transparent process that will be able to manage the Fund as well as the Secretariat.
Selection of the host country of the Board
The Board adopted an ad hoc subcommittee report on the selection process of the host country of the Board. After a closed session of discussion on the selection of a host country through a competitive process, the Board decided and announced that the Philippines would host the Fund. This was an important milestone reached that the Board granted a legal personality and legal capacity, which is required in signing the Financial Intermediary Fund (FIF) hosting agreement with the World Bank for the institutional set-up of the Fund.
Additional rules of procedure of the Board
The Governing Instrument of the FLD provides initial rules of procedures that mention the board membership, its quorum and the participation of active observers and stakeholders in board meetings among others, also at the board’s first meeting ad hoc committee was established to support the board in the development of additional rules of procedures even if they will continue to work on the draft until the 3rd Board meeting.
Workplan of the Board
The drafted workplan of the Board of the FLD was presented during its second meeting, different interventions were made and support the adoption of the workplan. The discussion also stressed the need for flexibility in the workplan to ensure effective implementation
Matters relating to the operationalization of the Fund as a World Bank-hosted financial intermediary fund
Board focused on the operationalization of FLD as a WorldBank Financial Intermediary Fund (FIF) to ensure that the WorldBank fulfil the conditions most importantly of direct access to the Fund, full autonomy to the board of the Fund and hosting agreement, which is part of the FIF-documentation the World Bank would have to deliver in few days.
Access modalities, including in relation to the development of relevant indicators and triggers to clarify access, and operational modalities for the Fund, including a functional equivalency framework
This background paper by the Interim Secretariat provides a research-based overview of existing access practices and approaches. In the intervention Board members from developing countries discussed the weakness of current access modalities and emphasised the call for a cohesive, nationally-owned approach, stressing the need for programmatic approaches that include small grants to support communities, Indigenous Peoples and vulnerable groups to climate crisis without intermediary process.
Financial instruments, modalities and facilities
The discussions were initially based on the background paper on financial instruments, modalities and facilities. Developed countries in their interventions, supported to use grants as an essential financial instrument and another point was raised by vulnerable countries emphasizing that they don’t need debt as another instrument to avoid additional burden.
Arrangements between the COP, the CMA, and the Board
The Board approved the decision on the draft arrangements between the Conference of the Parties, the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement, and the Board of the Fund for responding to loss and damage.
Participation of active observers in Board meetings and related proceedings
Board members have considered the background paper on the participation of active observers in board meetings and requested the interim secretariat to develop a draft observer policy which will be presented at the fourth meeting of the board, and then a draft decision on observer participation was adopted. Board members expressed appreciation for the diversity and importance of the inputs of active observers.
Arrangements for establishing and operationalizing an annual high-level dialogue
The arrangements for the first annual high-level dialogue were detailed in this document, and a draft decision was presented and adopted agreeing that the dialogue will take place in 2025 and will be launched during COP29.
Matters under consultation by the Co-Chairs (Travel policy, Name of the Fund, and other matters discussed by the Board at its first meeting)
On the travel policy consultation by the co-chairs, various concerns were discussed including the well-being, cost efficiency, and inclusivity of developing country members among others. The board considered the interim travel policy and requested the interim secretariat to develop a technical paper to be considered in its third meeting. Also on the name of the Fund, the Board adopted the decision that the name of the fund will be “Fund for responding to Loss and Damage”.