Published March 22, 2012
EXCLUSIVE: The Green Climate Fund, which is supposed to help mobilize as much as $100 billion a year to lower global greenhouse gases, is seeking a broad blanket of U.N.-style immunity that would shield its operations from any kind of legal process, including civil and criminal prosecution, in the countries where it operates. There’s just one problem: it is not part of the United Nations.
Whether the fund, which was formally created at a U.N. climate conference in Durban, South Africa last December, will get all the money it wants to spend is open to question in an era of economic slowdown and fiscal austerity. Its spending goal comes atop some $30 billion in “fast start-up” money that has been pledged by U.N. member states to such climate change activities.
A 24-nation interim board of trustees for the Green Climate Fund (GCF) is slated to hold its first meeting next month in Switzerland to organize the fund’s secretariat and to get it running by November, as well as find a permanent home for the GCF’s operations. The board expects to spend about $6.7 million between now and June of next year.
But before it is fully operational, the GCF’s creators—194 countries that belong to the United Nations Framework Convention on Climate Change (UNFCCC), and who are also U.N. members—want it to be immune from legal challenges and lawsuits, not to mention outside inspections, much like the United Nations itself cannot be affected by decisions rendered by a sovereign nation’s government or judicial system.
Despite its name, the UNFCCC was informed in 2006 by the United Nations Office of Legal Affairs that it was not considered a U.N. “organ,” and therefore could not claim immunity for its subordinate bodies or personnel under the General Convention that has authorized U.N. immunity since the end of World War II.
A UNFCCC resolution granting similar immunities would need to be “accepted, approved or ratified” by each individual member of the Kyoto Protocol before it took effect, the U.N. legal office advised. Even if UNFCCC members decided to ask the U.N. General Assembly to grant them similar immunity it would require each U.N. member state to make changes in domestic legislation, the opinion declared.
The immunity that the UNFCCC wants also governs where the Green Climate Fund can make its home. Among other things, the GCF board is charged to consider whether any would-be hosts have “the ability to provide privileges and immunities to the Fund as are necessary for the fulfillment of its purposes, and to the officials of the Fund as are necessary for the independent exercise of their official functions.”
In other words, without offering immunity, you cannot host the Green Climate Fund.
Countries interested in hosting the Green Climate Fund have until April 15 to let the board know. The U.S. is not considered likely to be one of them.
According to an official of the U.S. Treasury, which strongly supports the existence of the GCF, the full extent of the immunities still remains to be worked out by the fund board, although the wording of various UNFCCC resolutions indicate that immunities like those held by the U.N. are clearly envisaged.
Even beyond the U.N., immunities from outside inspection and legal action have become a hallmark of international organizations, whose members often consider them a necessity to keep their operations, and their officials, from facing harassment in national courts. Among others, the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), an organization initially sparked by Bill Gates, has been granted such immunities under U.S. law, according to the International Organizations Immunities Act. The World Bank, among other development finance institutions, also enjoys immunities.
Critics of such immunities, on the other hand, say that they are a barrier to proper external oversight of vast amounts of international spending, a potential facilitator of corruption, and a dangerous weapon against the protection of property rights and other civil rights of those affected by the institutions’ actions.
“Immunities amount to a veil of secrecy,” says Bea Edwards, executive director of the Government Accountability Project, a Washington-based whistleblower protection organization.
“They are an immunity from external audit or oversight. They build in a structural conflict of interest at any immune institution for any internal oversight mechanism.”
Those differing views could be even strongly felt in the years ahead due to the sweeping environmental actions that the GCF intends to finance and foster in its bid to forge a new, global “green economy” to forestall hazardous “climate change.”
For one thing, there is the hoped-for size of the GCF: $100 billion in annual spending would be more than well more than double the amount ($44 billion) spent in 2010 by the World Bank , heretofore the world’s largest development institution. The scope of the climate fund’s ambitions is also likely to vary widely across much of the developing world—where oversight is already weak, and national governments, which would execute most of the GCF’s projects, are often spectacularly corrupt.
For another, private investors as well as public-private partnerships, in addition to governments, could be contributing resources through the GCF, meaning that private interests could also benefit from the cloud of secrecy that immunities would place over the fund’s operations.
(Under U.N. immunity rules, property and funds “administered” by a U.N. agency “in furtherance of its constitutional functions” count as its own.)
That cloud of secrecy and privilege—at least, as codified by the U.N., is formidable.
According to the U.N.’s convention on privileges and immunities as applied in 1947 to U.N. “specialized agencies,” their property and assets “shall enjoy immunity from every form of legal process,” except when waived. And even then, waivers can never apply “to any measure of execution,” meaning whatever was done with them.
U.N. premises as well as property and assets, are immune from “search, requisition, confiscation, expropriation and any other form of interference, whether by executive, administrative judicial or legislative action.” All archives and documents, including even those “held” by the agencies, are considered “inviolable.”
Such agencies can move money, gold or any kinds of funds outside of any national regulation; are exempt from taxes, customs duties and import or export restrictions.
The same bulletproof status goes for their officials.
In the case of something like the GCF, this is “an issue of extending privileges and immunities to property rights,” in the opinion of Allan Meltzer, a distinguished professor of political economy at Carnegie Mellon University. “And these privileged people will not necessarily protect the property rights of others,” he adds.
A consultant at various times to the U.S. Treasury, the Federal Reserve, and Congress, Melzer also chaired a Clinton-era congressionally-mandated advisory commission on International financial institutions, including the International Monetary Fund and the World Bank.
Says he: “Rather than extending immunities, we should be emphasizing the rule of law. If we want to do environmental things, we should do them above board, not in secret.”
Judging from the course it has set for itself, the masters of the Green Climate Fund evidently disagree. However, questions sent last week, and again early this week, by Fox News to the CGF regarding its operations and immunities had received no reply before this article was published.