News: Civil Society attacks “corporate takeover” of GCF

The board of the Green Climate Fund will meet this week in Bali, hoping to hammer down some of the remaining strategy and governance issues before it gets into the business of collecting and distributing climate finance.

The Green Climate Fund (GCF) is the new, fancy, UN established climate financing body, and is supposed to be the lead institution for catalyzing climate finance. The GCF should make climate finance more efficient, by catalysing funds quickly and having a reliable process for deciding where they are spent. This is in contrast to the current web of funding pots, which were recently described as resembling “spaghetti soup“.. The GCF has a 24 strong board, with a majority of members coming from developing countries. However, it is the 2 non-governmental observer seats which are the focus of civil society frustration.

The letter, which has signatories ranging from, Transparency International as well as developing country bodies like the Ethiopian Consumer Association, criticises the takeover of observer seats by corporate representatives. It notes that in comparison to the broad range of civil society and business voices included in regular UN processes (9 seats in total), the GCF board only has 2 seats, one for the private sector, one for “civil society”. That’s a broad term that covers a range of issues (health, gender, economic growth, equality – the list goes on), and misses the fact that civil society doesn’t always agree on the same issues.

In the letter’s own words …

“The private sector active observer seats – one for developed countries and one for developing countries – have been captured by representatives of multinational corporations with long records of environmental devastation, corruption and, in some cases, human rights abuses.(1) Troublingly, the developing country private sector active observer seat is occupied by a developed country national representing the World Business Council on Sustainable Development, a corporate lobby group whose members include some of the world’s biggest polluters. (2) This same “developing country” active observer is a vice president at Alstom Power Systems, a multinational corporation whose subsidiaries and affiliates have been sanctioned by the World Bank and other bodies for corrupt practices.” (emphasis my own)

Specifically, they’re referring to…

(1) Refers to the head of Carbon Markets at Merill Lynch (Abyd Karmali), a bank with large investments in coal mining, and (2), the Vice President of Power and Environmental Policy for Australia and Asia at Alstom Power System (Gwen Andrews). Alstom Power Systems was sanctioned in in 2012 by the World Bank for bribing officials in Zambia to build its power plant.

The letter urges the GCF to support the public interest, not that of private sector. It also asks for observer seats to be filled by representatives from developing country businesses and institutions, not developed country companies operating in developing countries – a reasonable request. It calls for transparency in addressing risks of private sector involvement, and to include provisions similar to international frameworks for tobacco control, excluding organisations whose interest fundamentally conflicts with the public interest (in this case, funders of miners of oil, coal and gas).

Photo: Luka Tomac/Friends of the Earth

Photo: Luka Tomac/Friends of the Earth

These developments are worrying, as it is well known that the private sector will not be involved without good odd of a return on its investment. That return will be hard to find among the worlds poorest, who tend not to be the most profitable market segment. As the letter rightly points out, the world most vulnerable to climate change will be best equipped for coming changes by small to medium enterprises, a set of voices who have no say at all in the board of the GCF. That say will be sorely missing at this weeks meeting, as the fund decides how it is supposed to engage private interest successfully.

You can read the full 3 page letter, here.


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  1. Pingback: Little progress as Green Climate Fund delays till May | Adapted Planet

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