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Recalling paragraph 3 of Article 21 of the Convention on Biological Diversity, which provides for the Conference of Parties to review the effectiveness of the financial mechanism,

Recalling further decision II/6, paragraph 3, on the further development of the guidelines for the review of the effectiveness of the financial mechanism for consideration and decision by the Conference of the Parties at its third meeting,

1. Decides to adopt the attached Annex, containing the objectives and criteria for the first review of the effectiveness of the financial mechanism to be conducted in time for the fourth meeting of the Conference of the Parties;

2. Decides also that the review referred to in paragraph 3 of Article 21 of the Convention should be conducted under the authority of the Conference of the Parties;

3. Decides further that, based on the results of the review, the Conference of the Parties shall take appropriate action to improve the effectiveness of the mechanism if necessary.

1. In accordance with Article 21, paragraph 3, of the Convention, the objectives shall be to review and take appropriate action, if necessary, to improve:

(a) The effectiveness of the financial mechanism in providing financial resources;

(b) The conformity of the activities of the restructured Global Environment Facility (GEF), as the institutional structure operating the financial mechanism on an interim basis, with the guidance of the Conference of the Parties; and

(c) The effectiveness of GEF-funded activities on the implementation of the Convention.

2. The review shall draw upon, inter alia, the following sources of information:

(a) Information provided by the Parties on their experiences gained through activities funded by the financial mechanism;

(b) Annual reviews by the Conference of the Parties on the conformity of the activities of the financial mechanism with the guidance of the Conference of the Parties;

(c) The GEF annual report to the Conference of the Parties on its activities as the institutional structure to operate the financial mechanism, the annual reports of GEF and other relevant GEF policy and information documents;

(d) Reports from the GEF monitoring and evaluation programme;

(e) Information available from the United Nations Commission on Sustainable Development and the Organisation for Economic Cooperation and Development, and relevant bilateral and multilateral funding institutions; and

(f) Information provided by inter-governmental organizations and non-governmental organizations.

3. The effectiveness of the financial mechanism shall be assessed against. inter alia, the following criteria:

(a) The effectiveness of the financial mechanism in providing financial resources for the implementation of the Convention's objectives in respect of, inter alia:

(i) the adequacy, predictability and timely disbursement of funds for projects;
(ii) the responsiveness and efficiency of the GEF project cycle and operational strategy as it relates to biological diversity;
(iii) the ability of GEF to leverage additional finance; and
(iv) the sustainability of funded projects¹; and

(b) Application of the criteria of agreed full incremental costs to enable developing country Parties to implement the Convention, keeping in mind the provision of new and additional financial resources, in accordance with Article 20.2;

(c) The conformity of the activities of the financial mechanism with the guidance of the Conference of the Parties, as contained in decisions I/2, II/3, II/6, II/7, II/17 and III/5, which include:

(i) the eligibility criteria;
(ii) programme priorities;
(iii) the provision of financial resources for projects in a flexible and expeditious manner to facilitate the Parties' urgent implementation of Articles 6 and 8 of the Convention;
(iv) the programme of grants for medium-sized projects; and
(v) decision II/17 on national reporting by the Parties; and

(d) The effectiveness of GEF-funded activities on the implementation of the Convention.²

4. Under the authority and with the support of the Conference of the Parties, the Secretariat shall prepare background documentation for review by the Conference of the Parties and submit this documentation to the Parties at least three months before the fourth meeting of the Conference of the Parties, according to the above criteria, and shall, if necessary, appoint a consultant for this purpose.

5. In compiling the information for the review the Secretariat shall develop a questionnaire using the criteria adopted in this decision to be sent to the Parties for the provision of required information.

6. The Secretariat shall also ensure that field visits are effected in a selected number of country Parties in all geographical regions, in order to assess the process and to identify impediments, if any.

7. The Secretariat shall take the opportunity of relevant meetings to meet and interview stakeholders, including GEF and its Implementing Agencies.

8. On the basis of all information received, the Secretariat will prepare a synthesis to assess the progress in meeting the requirements of this annex. This synthesis will be sent for appraisal by five representatives of Parties nominated on a regional basis to ensure that the requirements of this annex will be met in a timely and comprehensive manner. Taking account of comments received, the Secretariat will distribute copies of the synthesis to all Parties and relevant bodies for their comments and any further contributions. On the basis of these, the Secretariat will prepare a draft report, which will be presented to the above regional representatives to ensure its compliance with the terms of this annex. The draft report will also be made available to GEF and the Implementing Agencies. The Secretariat will submit the synthesis report, with supporting documents as necessary, to Parties not later than three months prior to the fourth meeting of the Conference of the Parties. The supporting documents will include any comments and other information identified by source.

9. The Conference of the Parties shall, if necessary, take appropriate actions to improve the effectiveness of the financial mechanism and/or the effectiveness of this review procedure.

1. The Conference of the Parties recognizes that sustainability is a shared responsibility of the financial mechanism and the Parties.

2. The impact that the activities funded have on the realization of the Convention's objectives is of a long-term nature and thus information on impacts may not be available until further project experience has been gained.